Technology shares have had a rough period recently as investors reassess valuations and the potential impact of artificial intelligence (AI) on the sector.

But history shows that selloffs in high-quality tech businesses can often create opportunities for long-term investors.

With that in mind, here are three ASX tech stocks that brokers continues to rate as buys.

WiseTech Global Ltd (ASX: WTC)

The first ASX tech stock that could be a buy is WiseTech Global.

WiseTech develops software used by freight forwarders, logistics companies, and global supply chains. Its flagship CargoWise platform helps customers manage everything from customs compliance to shipment tracking across international trade networks.

Logistics is one of the most complex industries in the world. As global trade grows and supply chains become more digital, the demand for sophisticated software platforms continues to rise.

WiseTech’s strategy has also included acquiring smaller software providers around the world and integrating their capabilities into CargoWise. Over time, this has expanded the platform into a comprehensive operating system for global logistics.

If the company continues to execute on this strategy, it could remain a major technology provider to the global freight industry for many years.

Morgans is bullish on WiseTech and has a buy rating and $83.80 price target on its shares.

Life360 Inc. (ASX: 360)

Another ASX tech stock that could be a buy is Life360.

Life360 operates a family safety and location-sharing platform that allows users to stay connected with family members. While the core service began as a simple location app, the platform has evolved into a broader safety ecosystem.

The company now offers services such as crash detection, emergency dispatch, and digital driver reports. These features have helped Life360 convert more of its large user base into paying subscribers.

Importantly, the company still has millions of active users who use the platform for free. This provides a large pool of potential future subscribers as Life360 continues introducing new services and features. In addition, it has an advertising business which is able to leverage its troves of data to monetise its free users.

As digital safety services become more important for families, the company has a long growth runway.

Last week, Morgan Stanley put an overweight rating and $50.00 price target on Life360’s shares.

Xero Ltd (ASX: XRO)

A final ASX tech stock that could be worth considering is Xero.

Xero provides cloud-based accounting software to small and medium-sized businesses. Its platform allows companies to manage invoices, payroll, and financial reporting through a simple online interface.

The company has built a strong presence in markets such as Australia, New Zealand, and the United Kingdom, and continues to expand its reach in North America.

What makes Xero particularly interesting is its growing ecosystem. Beyond accounting, the platform connects with a wide range of financial services, payment systems, and business applications.

This ecosystem approach makes Xero increasingly embedded in the day-to-day operations of its customers. As businesses adopt more digital tools, platforms like Xero can become central to how companies manage their finances.

UBS currently has a buy rating and $174.00 price target on Xero’s shares.

The post 3 ASX tech stocks that brokers rate as buys appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Life360, WiseTech Global, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Life360, WiseTech Global, and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I view Warren Buffett as one of the world’s greatest investors, leading Berkshire Hathaway to be one of the world’s largest businesses through numerous good investment decisions. While he hasn’t invested in many ASX shares, I’m using his advice to put money to work in the Australian stock market.

The legendary investor from Omaha delivered an average return of around 20% per year for decades by focusing on long-term investing in businesses that had strong compounding potential and were good value.

It’s during periods of uncertainty when the most attractive prices appear. Warren Buffett has provided timeless advice for investors who are uncertain about what to do.

Warren Buffett’s advice

One of the shortest quotes from Warren Buffett may be the most applicable to the current situation.

He said:

Be fearful when others are greedy and greedy when others are fearful.

It’s hard to get that mentality (and timing) right all of the time, but I think it’s a good idea to buy when prices have dropped and be more cautious when the share market is booming.

There’s another quote that I really like which Warren Buffett said it regards to buying hamburgers at the supermarket. Don’t let a good discount go to waste.

To refer to a personal taste of mine, I’m going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the ‘Hallelujah Chorus’ in the Buffett household. When hamburgers go up in price, we weep. For most people, it’s the same with everything in life they will be buying — except stocks. When stocks go down and you can get more for your money, people don’t like them anymore.

I get excited when share prices go lower, which is why I’ve put my money into certain ASX share investments in the last few weeks.

I’m buying ASX shares

Motley Fool’s trading rules mean I can’t disclose what I’ve bought this week. But, last week I did purchase some Guzman Y Gomez Ltd (ASX: GYG) shares as a non-tech growth investment.

I’ve also shared some ideas of names that I’d be excited to buy right now (but haven’t yet) such as Temple & Webster Group Ltd (ASX: TPW), Tuas Ltd (ASX: TUA) and Global X S&P World Ex Australia GARP ETF (ASX: GARP).

Ultimately, I’m looking for names that I’m expecting earnings to grow significantly in five and ten years from now because that’s what will drive the share price higher, regardless of what happens in March (or even 2026). When you buy a growing business, it doesn’t matter as much if we don’t manage to invest at the lowest valuation level. Its underlying value will increase at a pleasing pace over time.

I don’t know whether Warren Buffett has made any investment decisions in March, but I’d like to think he’d be supportive of being brave during this period. There are plenty of opportunities out there right now.

The post I’m following Warren Buffett’s advice and buying ASX shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Guzman Y Gomez, Temple & Webster Group, and Tuas. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway and Temple & Webster Group. The Motley Fool Australia has recommended Berkshire Hathaway and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

What a difference a week can make. Last Monday, shares of BHP Group Ltd (ASX: BHP) were riding high, minting a fresh new record high of $59.39 and clocking a 12-month gain of over 50%. Not bad for one of the largest shares on the S&P/ASX 200 Index (ASX: XJO). BHP stock is in a very different position today.

Sure, the mining giant is in full recovery mode this Tuesday, up a healthy 2.7% at the tie of writing. But that doesn’t take away from the fact that BHP is still down by double-digits from last Monday’s high. Yep, at $51.42 a share at present, BHP has lost 13.1% over the past eight days.

This has been an exceptionally wild ride for any ASX investor who owns the Big Australian in their ASX portfolios. More so than most other ASX blue chip shares. To illustrate, the Commonwealth Bank of Australia (ASX: CBA) share price has dropped by just 0.4% since last Monday. Woolworths Group Ltd (ASX :WOW) is down by about 3.8%, while Telstra Group Ltd (ASX: TLS) has drifted 1.15% lower.

With this in mind, many ASX investors might be wondering why BHP stock has born so much of the sell-off brunt over the past week. This is particularly beguiling, given that BHP divested most of its energy assets years ago, so, at least in theory, is somewhat insulated from the oil supply fears that have so rattled markets over the past week.

Well, it’s hard to know for sure what has gotten the bees in investors’ bonnets with BHP stock. But I’m guessing it comes down to a handful of factors.

Why has BHP stock plunged 13% since Monday?

Firstly, BHP stock arguably had a lot of empty air under it a week ago. As we’ve already touched on, the stock had topped out after an incredible run in recent months. But BHP’s profits are always subject to rapid change, given the company’s underlying reliance on volatile commodity prices.

It was probably primed for a correction anyway, and the rapid change in the global geopolitical environment no doubt helped trigger that correction.

Secondly, the argument can be made that, although BHP wasn’t directly in line to be impacted by oil supply shock, it was still highly vulnerable to its consequences. For one, fuel inputs like diesel form a massive part of BHP’s cost base. It takes a lot of fuel to drive the mining equipment and transportation infrastructure that allows BHP to ship its iron ore and run its copper mines. A potential disruption to its fuel supply would be catastrophic for the miner.

Further, the largest customers of the oil and oil by-products that come out of the Strait of Hormuz are in Asia. Particularly India and China. These countries are some of BHP’s largest customers. And if steel mills and refineries in China lose access to energy, one of the first companies they will call to cancel shipments of raw materials like iron ore and copper would probably be BHP.

So with this in mind, it’s perhaps no surprise to see BHP shares lose so much value over the past week. Let’s see if today’s recovery can go the distance.

The post Own BHP stock? Here’s why the miner is down 13% in a week appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. 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 BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Coles Group Ltd (ASX: COL) shares are missing out on the market rebound on Tuesday.

At the time of writing, the supermarket giant’s shares are down 2.5% to $20.56.

This compares to a 1.2% gain by the ASX 200 index this afternoon.

Why are Coles shares underperforming?

Today’s decline has been driven by the company’s shares trading ex-dividend.

When a share trades ex-dividend, it means new buyers are no longer entitled to receive the company’s next dividend payment.

In Coles’ case, it has just gone ex-dividend for its latest fully franked interim dividend of 41 cents per share.

Because new buyers will not receive that upcoming dividend, the share price often falls by roughly the value of the dividend when the stock goes ex-dividend. That is why investors commonly see a decline in a company’s share price on the ex-dividend date.

Shareholders who owned Coles shares before the ex-dividend date will still receive the dividend even if they sell their shares today.

The Coles dividend

Last month, Coles released a solid first-half result. For the 27 weeks ended 4 January 2026, the company reported group sales revenue of $23.6 billion, representing growth of 2.5% year on year.

Earnings also improved on an underlying basis. Group EBIT excluding significant items increased 10.2% to $1.23 billion, while underlying net profit after tax rose 12.5% to $676 million.

However, statutory net profit after tax fell to $511 million, reflecting significant items related to a Federal Court judgment linked to earlier Fair Work Ombudsman proceedings.

The strong underlying earnings growth was largely driven by the company’s supermarkets division. Sales revenue in that segment increased 3.6% to $21.4 billion, while EBIT climbed 14.6% thanks to continued sales momentum and improved operational efficiency.

Online sales were also a highlight, with supermarkets eCommerce revenue increasing 27% during the half.

This ultimately allowed Coles to increase its fully franked interim dividend by 10.8% from 37 cents per share to 41 cents per share.

When is payday?

Eligible shareholders won’t have to wait long until payday comes around. The company intends to make its payout later this month on 30 March.

After that, according to a note out of Bell Potter, a fully franked 34 cents per share final dividend is expected in August, bringing total dividends to 75 cents per share in FY 2026.

Bell Potter currently has a buy rating and $22.35 price target on Coles’ shares.

The post Why are Coles shares sinking today? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

NextDC Ltd (ASX: NXT) shares are pushing higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) data centre operator and developer closed yesterday trading for $12.81. In early afternoon trade on Tuesday, shares are swapping hands for $12.83 apiece, up 0.2%.

For some context, the ASX 200 is up 1.3% at this same time.

After sinking over the last three months of 2025, NextDC shares are up 2.4% in 2026, outpacing the 0.1% year to date losses posted by the benchmark index.

And with an eye on the year ahead, EnviroInvest’s Elio D’Amato forecasts more outperformance for the ASX AI stock (courtesy of The Bull).

Here’s why.

Should you buy NextDC shares today?

“NextDC develops and operates data centres across Australia,” D’Amato said.

Citing the first reason he’s bullish on the ASX 200 stock, he noted:

Net revenue of $189.2 million in the first half of fiscal year 2026 rose 13% on the prior corresponding period. Underlying EBITDA [earnings before interest, taxes, depreciation and amortisation] of $9.9 million was up 9%.

D’Amato’s buy recommendation on NextDC shares also hinges on the company’s environmentally friendly and efficient energy production.

According to D’Amato:

NXT sources renewable energy for its facilities and designs highly efficient cooling systems, reducing carbon intensity per megawatt. Digital infrastructure is energy intensive, but efficient operators are poised to benefit.

As for the third reason you may want to buy NextDC shares today, he concluded, “Structural demand and execution momentum, in our view, support further upside.”

Commenting on that demand following the release of the company’s half year results in February, NextDC CEO Craig Scroggie said, “Our record forward order book is expected to drive a material uplift in revenues and earnings as we deliver this capacity across the period to FY29.”

Advantage Aussie data centres

NextDC shares also could find themselves in the sweet spot amid new laws spruiked by United States President Donald Trump last week.

The proposed regulations would see the nation restrict AI chip exports to countries that don’t have US approval.

Commenting on the potential impact of the proposed laws, Belinda Dennett, CEO of Data Centres Australia – whose members include NextDC – said (quoted by The Australian Financial Review):

We would anticipate that Australia, as a Five Eyes security partner with the US and with the critical minerals trade deal negotiated by the Albanese government, would be at the top of the list to secure a licence under this proposal.

This would give Australia an advantage over other markets, adding to land availability, abundant renewable energy, political stability, a highly skilled workforce and globally recognised leading local data centre operators in making us a favourable destination for data centre investment.

The post 3 reasons to buy NextDC shares today appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX 200 Index (ASX: XJO) financial shares are 1.85% higher as the market recovers from yesterday’s $90 billion rout.

Meanwhile, experts have recommended that investors sell two popular ASX 200 financial shares.

Here’s why.

Washington H. Soul Pattinson and Co Ltd (ASX: SOL)

The Soul Pattinson share price is 1.5% higher at $38.35 on Tuesday, and up 16% over the past 12 months.

Soul Patts is a diversified investment house that invests across a range of industries and asset classes, including ASX shares.

On The Bull this week, Mark Elzayed from Investor Pulse revealed a sell rating on this ASX 200 financial share.

Elzayed explains his sell rating:

SOL has long earned its place in Australian portfolios because of its enviable dividend record and conservative stewardship.

Even so, we see grounds for a tactical exit.

The valuation has moved to a premium relative to underlying asset momentum, with the price-to-earnings ratio sitting well above its longer term average.

Elzayed also spoke of moderation across Soul Patts’ core holdings of New Hope Corporation Ltd (ASX: NHC) and TPG Telecom Ltd (ASX: TPG) shares and the Brickworks business.

(New Hope shares are among the biggest fallers of the ASX 200 on Tuesday — here’s why.)

Elzayed concluded:

Softer global coal prices are tempering the exceptional cash generation previously delivered by New Hope, while TPG continues to navigate an intensely competitive telecommunications landscape.

Absent a meaningful acquisition to reignite growth, the fading post-merger enthusiasm around the Brickworks restructuring could leave the shares marking time.

Suncorp Group Ltd (ASX: SUN)

The Suncorp share price is $14.42, up 2.3% on Tuesday and down 25% over 12 months.

Also on The Bull this week, John Athanasiou from Red Leaf Securities gave the insurance giant a sell rating.

Athanasiou explained:

While premium rate increases have helped, we believe margin expansion is peaking. Earnings are exposed to claims inflation, natural catastrophe volatility and regulatory scrutiny.

Half year results to December 31, 2025 highlighted these risks. Profit after tax of $263 million was down from $1.1 billion in the prior corresponding period. Cash earnings were hit by higher natural hazard costs and the interim dividend was reduced.

Suncorp declared a fully franked interim dividend of 17 cents per share for 1H FY26, down from 41 cents per share in 1H FY25.

The Suncorp interim dividend represents a payout ratio of 68% of cash earnings, and will be paid on 31 March.

Athanasiou added:

Much of the recent improvement reflects cyclical conditions rather than structural change.

In our view, the valuation is vulnerable given competitive pricing pressure and rising affordability concerns. 

The post 2 ASX 200 financial shares to sell: Experts appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Technology shares on the ASX have had a rough run over the past year.

Rising interest rates, concerns about artificial intelligence (AI) disruption, and broader market volatility have pushed many growth stocks significantly lower.

But for long-term investors, this sell-off may be creating opportunities.

One ASX tech stock that could be worth considering right now is WiseTech Global Ltd (ASX: WTC).

At the time of writing, the WiseTech share price is $51.55, up 1.76% today.

Even after this small rebound, the stock remains well below where it traded last year.

A huge fall from its highs

WiseTech shares have fallen dramatically over the past 12 months.

The stock reached a 52-week high of $121.31 in July last year, before sliding as investor sentiment towards tech companies deteriorated.

More recently, the share price dropped to $40.59 on 13 February, marking its lowest level in almost 4 years.

Although the stock has bounced from that level, it is still trading more than 50% below its peak.

That steep decline could be one reason why the current valuation is starting to look far more attractive.

A global logistics software leader

WiseTech develops software used by freight forwarders and logistics companies around the world.

Its flagship platform, CargoWise, helps businesses manage complex global supply chains. Once embedded in a customer’s operations, the software tends to become deeply integrated into their systems.

That creates high switching costs and strong recurring revenue for the company.

WiseTech continues to expand its platform through product development and acquisitions. Management is also investing heavily in automation and AI, which could help customers improve efficiency and reduce costs.

Technical indicators suggest a recovery may be building

From a technical outlook, there are signs that the worst of the selling pressure may be easing.

The stock recently found support around the $40 to $45 range, where buyers stepped in during February.

Since then, the share price has been trending higher and is now approaching potential resistance near $60.

Momentum indicators are also improving. The relative strength index (RSI) is currently around 52, suggesting the stock is neither overbought nor oversold.

Meanwhile, the share price is trading slightly above its Bollinger Band midpoint, which can indicate a short-term recovery trend.

If momentum continues to build, a move back toward the $70 to $80 range could be possible over time.

Foolish takeaway

WiseTech shares have fallen well below their highs, but the underlying business continues to expand.

If the company delivers on its growth strategy and tech sentiment improves, the current share price could prove a compelling long-term opportunity.

For this reason, WiseTech could be one ASX tech stock worth watching closely right now.

The post What’s a great ASX tech stock to buy right now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Life360 Inc (ASX: 360) shares are flying higher in early afternoon trade on Tuesday. At the time of writing, the ASX tech stock is up 10.49% to $22.54 a piece.

Today’s rally means the US-based software development company’s shares are now 30.56% lower year to date and just 2% below where they were this time last year.

The tech stock has been caught up amid the tech-sector-wide sell-off over the past 6 months. This was driven by a growing fear that companies’ core services could be replaced by AI. At the same time, there was concern that tech sector share prices had become overinflated.

Why are Life360 shares flying higher today?

Today’s share price reversal is great news for investors after the stock crashed 18% this time last week, off the back of its FY25 financial results. 

Life360 delivered record growth in both its subscription and international segments, by 33% and 26% year-on-year, respectively. The company also said that it expects strong growth to continue in FY26. The news saw investors flock to the stock, with the share price spiking 15% in early morning trade on the same day. But then the share price took a significant U-turn, potentially due to investors taking their gains off the table.

Now that the dust has settled, it seems as if many are buying back into the growth stock.

There has been no price-sensitive news from the company today to explain the share price spike.

The rebound in tech stocks is evident across many stocks in the S&P/ASX 200 Information Technology Index (ASX: XIJ) today, raising questions about whether ASX technology shares have finally hit the bottom.

At the time of writing, the index is 1.75% higher for the day.

Are Life360 shares a buy, sell or hold for the remainder of 2026?

TradingView data shows that most analysts are extremely optimistic about Life360’s outlook over the next 12 months. 

Out of 15 analysts, 12 have a buy or strong buy rating. Another three have a hold rating on the stock. 

The average target price is $39.82, implying a huge potential 77.13% upside at the time of writing. But some are even more bullish, expecting the stock to rocket 126.50% to $50.94 apiece over the next 12 months.

The team at Bell Potter recently confirmed its buy rating on Life360’s shares with a price target of $40. The broker said it is pleased with the company’s guidance for FY26 and sees now as a good time for investors to pick up shares in this rapidly growing company. 

Morgan Stanley has an overweight rating and $50 target price on the stock. The team said it believes Life360 is well-positioned for strong long-term growth. They added that its defensive qualities and large user base make it difficult for AI to disrupt or replace the company’s business model. 

The post Why are Life360 shares soaring 10% higher today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Energy prices have been all over the place following the conflict in the Middle East. The share prices of oil companies were sent sharply higher, before returning back down again.

Trying to time the market when there are shocks such as this can be a bit of a fool’s game. Instead, if you believe that global instability is likely to remain high and want to take a long-term view, it’s reasonable to infer that global defence spending will also remain higher than normal, and that energy prices might stay high.

On the spending front this is indeed the case with many countries around the world looking to bolster their armed forces following less confidence in global alliances.

So where does that leave investors?

On the Australian market there are some defence-specific stocks such as Austal Ltd (ASX: ASB), DroneShield Ltd (ASX: DRO) and Electro Optic Systems Ltd (ASX: EOS), but if you’re looking for less volatility, the following defence ASX ETFs might be the way to go.

Global X Defence ETF (ASX: DTEC)

DTEC ETF is a fairly modestly-sized defence ETF which says in its fact sheet that global defence spending has grown at an annualised rate of 4.3% for the past 40 years.

It goes on to say:

Increasing global tensions are driving nations to boost defence spending, reflecting heightened national security concerns and a competitive push to maintain strategic advantage.

DTEC says it invests in companies “with a revenue filter’ with exposure to AI, drones and cybersecurity, “capturing the future of innovation in defence”.

VanEck Global Defence ETF (ASX: DFND)

DFND ETF is quite different from the previous ASX ETF, in that it specifically aims to invest in larger companies that generate at least 50% of their revenues from the defence sector.

The companies it invests in must have a market capitalisation greater than US$1 billion and a 3-month average daily trading volume of at least US$1 million.

This defence ETF has $315.4 million in net assets currently and is invested into 36 companies.

DFND says it provides, “exposure to the largest global companies involved in aerospace and defence, research and consulting, application software and electronic equipment & instruments, that are typically under-represented in benchmarks”.

Betashares Global Defence ETC (ASX: ARMR)

ARMR ETF currently has a wider remit still, providing exposure to “up to 60” global companies which derive more than 50% of their revenues from defence.

At the moment these companies include BAE Systems, Lockheed Martin, General Dynamics and Palantir Technologies.

ARMR will only invest in companies which are headquartered in NATO or NATO-allied countries.

Betashares Global Energy Companies Currency Hedged ETF (ASX: FUEL)

And finally, if you’re looking for broad exposure to the energy sector, this Betashares ASX ETF provides just that, investing globally into companies including Chevron, ExxonMobil and Shell.

The post If you think global instability will persist, these ASX ETFs might be for you appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Periods of market volatility can leave investors wondering whether they should buy ASX shares while prices are falling, or sit on the sidelines and conserve cash.

That dilemma has been front of mind this week. The ASX 200 tumbled on Monday after oil prices surged in response to escalating tensions in the Middle East. Markets have partially recovered today, which is a reminder of how quickly sentiment can shift.

When markets move sharply like this, it can feel uncomfortable to invest. But these swings are also a normal part of long-term investing.

Volatility is part of the journey

Share markets rarely move in a straight line. Even during long bull markets there are corrections, geopolitical shocks, and sudden shifts in investor sentiment.

Events such as wars, inflation scares, or interest rate concerns often trigger short-term selloffs. Yet historically the market has tended to recover and move higher over longer periods as company earnings continue to grow.

That is why many experienced investors try to avoid making big decisions based solely on short-term headlines.

Why going all-in can be risky

One challenge during volatile periods is timing. It is extremely difficult to know whether the market has already hit its low point or whether further declines are coming.

Investing all your available cash at once can therefore be risky. If ASX shares fall further after you invest, it can feel discouraging even if the long-term outlook remains positive.

This is why many investors prefer a more gradual approach.

The case for dollar-cost averaging

Dollar-cost averaging (DCA) is a strategy where you invest money into the market at regular intervals rather than committing a large lump sum at once.

For example, instead of investing $10,000 immediately, you might invest $1,000 each month over the next 10 months.

This approach helps smooth out the effects of market volatility. Sometimes you will buy shares when prices are higher, and sometimes when they are lower. Over time, this can reduce the pressure of trying to pick the perfect entry point.

Many long-term investors have used this strategy to steadily build positions in high-quality companies such as ResMed Inc. (ASX: RMD), REA Group Ltd (ASX: REA), or Xero Ltd (ASX: XRO). Others prefer exchange traded funds (ETFs) like the iShares S&P 500 ETF (ASX: IVV) to gain broad exposure to global markets.

Patience usually wins

The most important factor in long-term investing is often not timing the market perfectly, but simply staying invested.

Volatility can feel unsettling in the moment, but over decades the share market has historically rewarded patient investors.

Rather than choosing between buying ASX shares or holding cash entirely, many investors strike a balance. Keeping some cash on hand can provide flexibility, while gradually investing over time allows you to take advantage of market dips.

In uncertain markets, a disciplined approach often proves far more valuable than trying to predict the next short-term move.

The post Should I buy ASX shares or look to conserve cash right now? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in REA Group, ResMed, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed, Xero, and iShares S&P 500 ETF. The Motley Fool Australia has positions in and has recommended ResMed and Xero. The Motley Fool Australia has recommended iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.