Should you buy the dip in ASX 200 shares in April?

If you have FOMO on ASX 200 share bargains right now, don't panic. Here's why April could be the best time to buy the dip in this bear market.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

After a horrid run in March which saw the S&P/ASX 200 Index (ASX: XJO) tumble lower, ASX 200 shares are charging back this week. Some shares like Afterpay Ltd (ASX: APT) are up more than 150% in less than a week.

But just because we're seeing share price gains, that doesn't mean the worst is behind us. In fact, if the rest of the world is anything to go by, the coronavirus pandemic is just starting here. Trillions of dollars of economic stimulus around the world are certainly helping boost ASX 200 shares higher. However, I wouldn't say we're out of the woods just yet in terms of volatility.

With that in mind, could April be the best time to buy the dip in ASX 200 shares?

Should you buy the dip in April?

The ASX 200 is down 20.75% in March, even after this week's rebound. But I think markets may be jumping the gun a little bit. It's important to stay calm and invest rationally in times like these, but being overly bullish may not be the best idea.

Personally, I think market timing is incredibly difficult. Even the best in the world rarely get it right. I think that consistently putting money into cheap ASX 200 shares is the best way to make the most of depressed valuations right now. With the coronavirus pandemic peak yet to hit the USA or Australia, I think April could be a buying opportunity.

I believe the stimulus measures should help boost valuations higher. Markets love to see swift and strong responses to economic issues. But this could just be a bull trap, where an extended bear market sees a surge of positivity before the fundamentals hammer them lower. 

Which ASX 200 shares should you buy?

If you've already got your personal finances in order, April could be the time to buy. It's easy to get FOMO when you're investing, but I wouldn't panic. Buying with a one or two-week time horizon is just gambling rather than long-term investing. 

I personally like the look of defensive or non-cyclical companies right now. I'd be keeping an eye on Telstra Corporation Ltd (ASX: TLS) and Origin Energy Ltd (ASX: ORG).

ASX 200 shares could be in the bargain bin now, but I think the uncertainty will continue into next month. With a bit of spare cash, you could accelerate your retirement with some great buys in April.

Motley Fool contributor Ken Hall owns shares of AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Cheap Shares

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Cheap Shares

Guess which ASX All Ords share is up 68% but still dirt cheap

Bell Potter thinks this stock could rise very strongly from current levels despite its heroics this year.

Read more »

a group of business people in business attire join their hands in the middle of a circle in a team celebration as they smile broadly in celebration of a milestone event.
Cheap Shares

5 beaten-up ASX shares being bought by insiders

Could all these buy-ups among company insiders indicate these ASX shares are going cheap?

Read more »

a happy young woman holding multiple shopping bags
Cheap Shares

Top ASX shares to buy on discount in December 2024

Black Friday may be over but there are still bargains to be found on the ASX!

Read more »

A man with binoculars crouched in the bush, indication a share price on watch
Cheap Shares

I've got $2,000 and I'm on the hunt for cheap ASX shares to buy in December

These stocks could be too cheap to ignore.

Read more »

Smiling couple looking at a phone at a bargain opportunity.
Cheap Shares

An undervalued ASX 200 stock to buy now

A leading broker sees big returns on offer from this blue chip.

Read more »

Woman on her laptop thinking to herself.
Cheap Shares

6 ASX shares down 50%+ in 2024. Are they cheap?

A cheap share doesn't always mean a bargain.

Read more »

Two happy shoppers finding bargains amongst clothes on a store rack
Cheap Shares

Here are 2 of my favourite cheap ASX shares to buy today

Looking for a bargain? These two options have popped onto my radar recently.

Read more »

A photo of a young couple who are purchasing fruits and vegetables at a market shop.
Cheap Shares

Time to buy? One Australian stock that hasn't been this cheap in years

This ASX stock is cheaper than its P/E ratio suggests.

Read more »