Many ASX share portfolios have been hit hard in 2020. The coronavirus pandemic has shutdown economies and triggered bear markets around the world.
Closer to home, the S&P/ASX 200 Index (ASX: XJO) is down 21.6% since the start of the year. That's a far cry from the 7,000+ point mark we hit in late January.
Many investors are spooked right now, and no one knows where markets will go. But if you're looking to make your ASX share portfolio safer in 2020, here are a couple of ways to start.
How to make your ASX share portfolio safer in 2020
I think in times of uncertainty it's good to look for ASX shares that have strong cash flows. While tech shares like NextDC Ltd (ASX: NXT) can offer great long-term upside, cash is king in a downturn.
That means I'd be considering adding a big ASX blue-chip to my portfolio for safety. That could be something like Commonwealth Bank of Australia Ltd (ASX: CBA) right now.
The ASX banks are looking to cut dividends as it stands. A weaker economy could hit earnings while pressure from the banking regulator is also squeezing dividend payouts.
However, CBA has a market capitalisation of $105 billion and supports tens of thousands of jobs in Australia both directly and indirectly.
There's implicit government support for the big bank as well given its size and importance. I think CBA will see strong cash flows in 2021 and beyond which could make it a buy at its current price of $59.53 per share.
CSL Limited (ASX: CSL) could be another safer addition for your ASX share portfolio. The CSL share price has continued to climb despite the bear market and is the largest company on the ASX.
The Aussie biotech giant continues to invest in long-term research and development projects and has a history of success. I'd expect CSL to weather the current storm and trend upwards in the coming decades.
If you're looking for more steady earnings in the short-term, I think it's hard to beat the Aussie supermarkets. That means Coles Group Ltd (ASX: COL) or Woolworths Group Ltd (ASX: WOW) could be in the buy zone in the current environment.
Foolish takeaway
Of course, no one has a crystal ball right now. These ASX shares could be hit hard by economic changes in the next few months.
However, if you invest in high-quality companies for the long term and diversify your portfolio risk, there's a good chance of success in the future.
