How to invest in ASX shares when you can’t find stocks to buy

I must admit, I’ve had a hard time finding quality ASX stocks at cheap prices to buy in recent months. And I’m sure I’m not alone.

Most of my favourite ASX stocks, namely Washington H. Soul Pattinson and Co Ltd (ASX: SOL), MFF Capital Investments Ltd (ASX: MFF) or Wesfarmers Ltd (ASX: WES) are either approaching their record highs, or just look prohibitively expensive.

Other options, particularly dividend stocks like Telstra Group Ltd (ASX: TLS), Coles Group Ltd (ASX: COL), or Commonwealth Bank of Australia (ASX: CBA), aren’t offering much, at least relatively speaking, in dividend income potential. As a result, I’ve found little reason to buy.

As an investor who attempts, with varying degrees of success, to follow Warren Buffett’s value investing style, this makes life difficult. After all, Buffett teaches us that merely finding high-quality, moat-protected companies doesn’t make for a compelling investment. You also have to buy those stocks at what Buffett’s late right-hand man Charlie Munger once called “prices that make sense”.

So, what’s an investor to do when facing this devilish conundrum?

Investing when you don’t know which ASX stocks to buy

I think ASX investors have three choices if hamstrung by the current market conditions.

The first is just continuing to look under more and more proverbial rocks for investing opportunities. Just because the blue chips of the ASX are pricey doesn’t mean every single stock on the market is expensive to buy too. You never know when you might find a stock with potential to buy that the broader market has missed. One could even extend that to the US markets, or other international stock exchanges, if one has the appetite.

If that all sounds a bit tricky, I don’t think there’s anything wrong with investing in cash assets at this point in time. Cash assets like term deposits, savings accounts or cash-based exchange-traded funds (ETFs) haven’t looked this good in years. With interest rates at levels unseen for most of the past decade, you can lock in a risk-free return of over 5% right now on many cash assets. That’s not a bad return for a zero-risk investment.

Finally, investors can consider index funds. Yes, index funds rise and fall with the broader market, and as such, are quite pricey right now. But I think a period, passive investing strategy, ideally using dollar-cost averaging, works in any investing environment, provided the investor keeps a long-term mindset. Plus, I always say that, given markets go up far more often than they go down, it’s not a terrible idea to keep investing in index funds when they are at, or near, all-time highs.

The post How to invest in ASX shares when you can’t find stocks to buy appeared first on The Motley Fool Australia.

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• Which Aussie blue-chip stock is the best performer so far in 2026?

Motley Fool contributor Sebastian Bowen has positions in Mff Capital Investments, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers. The Motley Fool Australia has positions in and has recommended Mff Capital Investments, Telstra Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.