Should you be buying toilet paper or quality ASX shares at a bargain price?

Caroline Mark
I'm grateful that I bought a big pack of loo paper a week or so ago, as I run a buy on demand kind of family. But what is everyone's obsession with toilet tissue? I really don't get it.

Should you be rushing to the supermarket for your super packet of kleenex or putting your pennies into some quality ASX Shares?

I had a look at a few charts to get some perspective. 
The outstanding and unanswered multi million dollar question is really if the share market thinks global economies will really freeze up then stocks will keep falling, or is the coronavirus just a blip with a quick outcome and a quick return to normality?

ASX 200 in past 12 months
First off, the main ASX 200, 1 year shows that the biggest 200 companies are still higher than they were this time last year. This time last year it was at 6,217 versus 6,328 today. So, if you are like me and started buying shares in Sept, Oct, Nov , Dec 20149, your share portfolio isn't looking good.

ASX 200, 5 year chart
What's also  interesting is the 5 year chart. We are definitely still ahead, especially if you bought in early 2016 and rode the chart through to early Feb 2020.  You would have made some nice money.
For those set and forgetters of 5 years ago, you are still up and you will also have been banking some nice dividends. Maybe you even bought and sold a few shares and made a profit.

ASX_5years_mar2020.png

What's been happening if you bought overseas?
Well here is the Dow Jones (courtesy of the Wall Street Journal), over the last 3 years. And yes there has been a big correction, and it's not in a peak but it's not a total disaster either. The market was at the same place in July last year and it is still much higher than just a year ago.
DowJones_3years.png

Are there any stock market lessons that I'm learning?
Richard Hemming is always talking about taking profits and locking some of your paper profits into your actual bank account. And I think that is a clear lesson (I wish I'd taken his advice with Panoramic Resources) to lock your profits in because they might disappear the next day but actually the point that keeps coming back to me is that there is probably a better company with more potential for you to invest in.

I should have taken even the few hundred dollars off the table and put it in the bank because right now I'd have $1300 to put into another company or to boost up a holding in something I already own that is now trading at a bargain price, rather than having my under $1,000 stubbornly in a stock going no where (yes, because I'm too stubborn to give up on it).

My other lesson is that my blue chip ASX shares have fallen in percentage terms just as much as my small caps. 

Bargain Small Caps to Buy
I'm getting up early tomorrow to read up on the 10 bargain small cap stocks. I've been saving money so far this year to buy more ASX shares. I was waiting for the end of the reporting season, but now I'm going to swat up on some small caps and dip my toe in over the next few days to see where the shares are. The market is moving so much, maybe I'll just buy slowly to get a good average price rather than to be locked in today, for the price to drop a few cents tomorrow. But I certainly won't be rushing to the supermarket to buy more loo paper. I'm sticking to shares.



 

About the Author

Caroline Mark

Caroline Mark is the Founder and Publisher at Under the Radar Report, which provides independent ASX share research to help build investor’s share portfolio. Under the Radar Report is licensed to give general share financial advice only (ASFL: 409518). The author is not licensed to give personal financial advice and this commentary is for general information only.

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