The Australian share market is expected to fall heavily this morning, following on from a very negative day in the US.
The S&P 500 fell by just over 3%. That doesn't sound like much compared to an individual share movement, but it's a very negative day for a whole index to fall by 2%, let alone 3%.
But, you could also argue that iShares S&P 500 ETF (ASX: IVV) is now 3% better value. We've been waiting for shares to be better value. Now they are better value, people seem scared.
Most people reading and writing on fool.com.au are not yet retired – that means we are still buyers of shares. It's a good thing for our future share purchasing if prices are lower. Granted, it's not good for our current shares, but I have decades of share buying ahead.
Would I rather buy a quality growth share like Altium Limited (ASX: ALU) at a price 5% higher or lower than yesterday's closing price? It's pretty obvious what the answer is!
The only way to buy shares at good value is if they occasionally fall in price. Shares don't just go up every month forever, particularly if interest rates are rising.
There's a reason shares are seen as higher risk than most other asset classes. That view is actually slightly misplaced in my opinion, I believe shares give you the best chance of beating inflation by the biggest margin over the long-term. But, volatility is the price we pay to enter this great wealth-creating world. Volatility is not really the same thing as risk.
Foolish takeaway
This bull market has been one of the longest-running ones on record. We have gotten too used to steady asset value growth. Shares are meant to be volatile.
I'm really looking forward to using the volatility and lower prices as an opportunity to snap up quality businesses trading at bargain value like MNF Group Ltd (ASX: MNF), Citadel Group Ltd (ASX: CGL) and Bapcor Ltd (ASX: BAP).
