This simple ASX strategy could outperform most investors

There’s no shortage of complex strategies in the market. Stock picking frameworks, macro views, trading signals. It can quickly become overwhelming.

But the approach I keep coming back to is far simpler.

And I think it has a very real chance of outperforming most investors over time.

That strategy involves gaining broad market exposure, a touch of global equities, and committing to regular investments.

Focus on broad market exposure

The Vanguard Australian Shares Index ETF (ASX: VAS) would form the foundation of a simple investment strategy.

This exchange-traded fund (ETF) gives exposure to a wide range of Australian companies, from banks and miners to healthcare and consumer businesses.

What I like here is that you’re not relying on a handful of picks. You’re capturing the performance of the broader market, which has historically delivered solid long-term returns.

It’s simple, diversified, and effective.

Add global growth

The Vanguard MSCI Index International Shares ETF (ASX: VGS) complements that perfectly.

It opens the door to global leaders across industries like technology, healthcare, and industrials.

Many of the world’s most dominant companies aren’t listed on the ASX. The VGS ETF gives you exposure to them in one investment, helping to balance out the local focus of the VAS ETF.

Keep investing consistently

This part of the strategy isn’t complicated. It involves regularly investing into these ETFs, regardless of what the market is doing.

Some months you’ll be buying when prices are high. Other months you’ll be buying during pullbacks.

Over time, this dollar-cost averaging approach helps smooth out your entry price and removes the need to time the market.

Let compounding work its magic

This is where things start to get interesting. With compounding, returns begin to build on top of previous returns, and the effect accelerates over time.

It won’t feel dramatic early on. But over years and decades, the difference can be significant.

The key is staying invested and reinvesting any income along the way.

Why I think it can outperform

Many investors underperform not because they pick bad investments, but because of behaviour.

They chase momentum, react to headlines, or try to time market moves. This strategy avoids those pitfalls.

It keeps you invested, diversified, and focused on the long term. And while it may not feel exciting, I think that’s exactly the point.

Foolish takeaway

A simple approach built around broad market ETFs like Vanguard Australian Shares Index ETF and Vanguard MSCI Index International Shares ETF may not grab attention day to day.

But by combining diversification, consistency, and compounding, I think it has a strong chance of outperforming more complex strategies over the long run.

The post This simple ASX strategy could outperform most investors appeared first on The Motley Fool Australia.

More reading

• 3 top Vanguard ETFs I would buy in April
• How long will it take for the ASX 200 to recover? Expert
• $10k invested in the ASX via this ETF before the war is currently worth…
• Where to invest $50,000 in ASX ETFs for the next 10 years
• The stress-free ASX ETF portfolio built to weather market crashes

Motley Fool contributor Grace Alvino has positions in Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.