There has been more selling of technology shares. The NASDAQ 100 (NDX) fell by another 2.1% overnight. Is it time to jump on ASX shares?
It’s hard to know how much share prices are going to fall overnight, but I imagine it’s not going to be positive for ASX shares today. Australian shares usually drop when the American share market falls heavily.
September has had several negative days so far today. The NASDAQ 100 has dropped 10% this month – and we’re only a third of the way through the month. Who can tell why it’s happening? Maybe investors are worried about the upcoming United States election. Perhaps people are just taking profit off the table after a strong run. But selling can cause panic selling to de-risk.
When broad share market selloffs happen I get excited. Wouldn’t you rather buy shares when they’re cheaper? Sure, it’s not nice for existing holdings – but I didn’t buy them for what was going to happen on 11 September 2020, 3 November 2020 or 21 April 2022. I invested in them for the long term.
So negative periods like this month excite me because I get to buy shares at cheaper prices when nothing has changed compared to last month.
Which shares will feature?
No-one can say how much a share price will move on any given day. That’s purely decided by the buyers and sellers each day.
ASX tech shares like Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and Appen Ltd (ASX: APX) are often among the biggest movers on the market – whether that’s up or down.
With the introduction of a Paypal interest-free instalment option, I’m not sure what interesting prices for the BNPL operators would be.
However, I do like the idea getting to buy my existing ASX tech share favourites at lower prices. I like businesses such as Altium Limited (ASX: ALU) and Pushpay Holdings Ltd (ASX: PPH). I’m more drawn towards Pushpay than Altium these days. Altium’s revenue has been impacted by COVID-19, whereas the difficult conditions actually seem to be helping Pushpay grow faster. I recently covered Pushpay here.
There are businesses in different industries that could be worth buying through this volatility, it doesn’t just have to technology stocks. But tech shares like Redbubble Ltd (ASX: RBL) do benefit from network effects and quick international growth, which is why I’m drawn to tech ASX growth shares. Interest rates remain very low across the world.
