Yesterday's shaky start to the week for the ASX (apparently it was the worst Monday for ASX shares since August last year) might have given investors some pause about the prevailing opinion these days that 'the market always goes up'.
But I think it represents an opportunity to top up your favourite ASX shares after a year that so far has been defined by unbridled optimism.
So here's where I would spend $10,000 on ASX shares this week, taking all of this into account.
Coles Group Ltd (ASX: COL)
Coles has had a perfect storm of negative sentiment over the past week or so. After making a new all-time high last week of $17.25 a share, Coles was rocked by news that its old parent company Wesfarmers Ltd (ASX: WES) was cashing in on these gains and selling around $1 billion worth of COL shares.
So Coles was already trending lower when yesterday's wobbles hit the price even further. Coles yesterday closed at $15.65 a share – down nearly 10% from last week's highs.
That price puts the company on a P/E ratio of 17.61 and a trailing dividend yield of 3.45% (4.93% grossed-up). In today's frothy markets, I think Coles is a great buy for a solid, defensive income share. It's certainly a lot better value on current prices than its rival Woolworths Group Ltd (ASX: WOW) in my opinion.
MFF Capital Investments Ltd (ASX: MFF)
MFF Capital is a listed investment company (LIC) that focuses primarily on buying quality, buy-and-hold type companies listed in the USA. Some of its largest holdings are payment giants Mastercard and Visa, as well as Alphabet (Google) and Coca-Cola.
MFF shares have had an incredible year, rising over 31% in the last 12 months (which is closer to 40% if you include special and normal dividends). Still, after brushing $3.74 a share last week, yesterday MFF shares closed at $3.63 – a drop of 3%. Thus, I think today might be a good time to buy in if you'd like an easy way to invest in some of the best companies in the US. I already hold MFF in my own portfolio, but I think there's plenty of room for this company to go higher if markets resume their recent upward trajectory in 2020.
Foolish takeaway
These two ASX shares are top-notch companies I would be very happy to add/add more to this week. We haven't seen too many decent 'buy-the-dip' opportunities in the last few months, so yesterday's sell-off might be a rare chance to strike!
