Buying ASX shares on days like today makes a lot of sense to me. We want to buy assets at cheaper prices. There is a lot of choice right now.
Inflation in the US for the month of August was stronger than investors and economists were predicting. What this means is that strong inflation is sticking around for longer than expected, so the US Federal Reserve will likely need to increase interest rates even further to bring it under control.
Interest rates matter because they act like gravity. The higher the interest rate, the more it’s going to pull down on asset values, like shares.
So, with all of the fear in the market, I think it’s a good time to be greedy and start buying shares. With that in mind, these are some of the ones I’d choose:
Brickworks Limited (ASX: BKW)
I think that there’s a lot of negative investor sentiment about Brickworks at the moment. The Australian construction industry is hurting, plus higher interest rates could theoretically hurt the value of its industrial property trust. I’m optimistic about the long-term for both of these divisions.
However, with a somewhat cyclical business like this one, I believe the right time to buy is when negativity has picked up.
The Brickworks share price is currently down close to 4% today and 16% this year. I believe it’s at a very good price compared to the value of its underlying investments and property assets. Its growing dividend is another bonus.
Lovisa Holdings Ltd (ASX: LOV)
Lovisa is a jewellery retailer which is popular in Australia and around the world with younger shoppers. Its stores are very profitable and the business has big plans to grow the size of its network globally.
I think that operating leverage is going to help this ASX share become much more profitable as time goes on. This can help it grow the dividend and cashflow, boosting returns for investors.
The Lovisa share price is down more than 3% today, so I think this dip is a useful pullback.
GQG Partners Inc (ASX: GQG)
GQG Partners is one of the largest fund managers on the ASX. I think that its long-term fund performance is impressive, which means that it is retaining and growing its funds under management (FUM). It has committed to paying a large dividend payout ratio to shareholders, so investors can benefit from the attractive quarterly dividend.
With the ASX share seeing strong fund inflows each quarter, I think this business can deliver attractive total returns in the next few years as it grows its net profit and shareholder payouts.
At the time of writing, the GQG Partners share price is down more than 4% today.
