Why it’s a great time for ASX investors to buy US shares

We Fools have long touted the benefits of buying US shares to add to a portfolio of diversified ASX shares.

There are diversification benefits alone of owning companies that are domiciled in another country. Not to mention the benefits of owning assets that are priced in a different currency.

But the US is also home to some of, if not most of, the best businesses in the world. We do have some fine companies on the ASX, don’t get me wrong. But companies of the calibre of Apple Inc (NASDAQ: APPL), of Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL)? That’s a harder bow to string.

That brings us to the question at hand. Why is now a great time to buy US shares?

I’ll preface this by saying no one knows when the best time to buy anything is. The US markets could tank next week and provide even better deals than the present.

But that’s a fool’s game to play (and not the good kind of Fool). I prefer to think of that old proverb of ‘the best time to plant a tree was 20 years ago, the next best time is right now’ in this situation.

US-Australia relations warm

But right now is certainly shaping up to be an attractive time to hop across the Pacific for a few reasons.

The first is our dollar. Currency movements tend to work out over time and thus shouldn’t be an issue of major concern for any longterm investor. But even so, there’s no hiding that our dollar has appreciated significantly against the US dollar over the past year or so.

Exactly a year ago, one Aussie dollar was buying around 57 US cents. Today, it is buying 77 cents. That means we can buy 35% more US assets with the same Aussie dollar today than this time 12 months ago.

The second reason is that many US companies have seen their share prices cool over the past month or two. Look at Apple.

It’s more than 15% cheaper at the time of writing than it was in late January. Amazon.com Inc (NASDAQ: AMZN) is more than 10% lower over the same period. It hasn’t been too often in the past when we have seen these kinds of companies sell off like that.

Foolish takeaway

Buying quality US shares to add to your ASX portfolio is a great move from several angles. So if you agree, but have been holding back in recent months, now might be a good time to revisit this idea, if for the above reasons and nothing else.

As that other saying goes, if the iron is hot…

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Amazon, and Apple and recommends the following options: short March 2023 $130 calls on Apple, long January 2022 $1920 calls on Amazon, short January 2022 $1940 calls on Amazon, and long March 2023 $120 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Amazon, and Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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