The stock market rebounds. Is it time to invest?

0

The stock market has rallied in recent weeks, with the S&P500 up more than 12% over the past month. The Nasdaq also entered a bull market after rising more than 20% from its mid-June low.

However, it is not certain that these gains will last. While many investors are hoping that the worst of this bear market is over, some experts are warning that this surge is only temporary and the market needs to drop further. At this time, however, it is too early to tell if the market is on the road to recovery or if a steeper decline is yet to come.

It can therefore be difficult to decide when to invest. If stock prices are rising, this could be a smart buying opportunity. But if this bear market isn’t over yet, it might be tempting to wait a little longer. What is the best option for you?

Should you invest now or wait?

Economic uncertainty can be hard to bear, and even the experts can’t predict exactly what the market will do. Fortunately, this may not make a difference in your investment strategy.

Now may be the time to invest, no matter what’s going on with the stock market. There isn’t necessarily a good or bad time to buy, and investing in a downturn isn’t as risky as it seems.

Indeed, short-term volatility is not as important as long-term performance. The stock market always has short-term ups and downs, but over the long term, it has historically generated positive average returns.

^ SPX data by YCharts

In other words, as long as you hold your investments for at least a few years, it doesn’t matter what the market does in the next few days, weeks or months. Even if you invest today and stock prices fall tomorrow, it won’t have a significant effect on your long-term strategy.

The secret to protecting your money

Besides maintaining a long-term perspective, the other way to ensure that your investments are as safe as possible is to choose the right stocks.

If this bear market isn’t over yet and stock prices fall again, solid investments have a much better chance of rebounding. The best stocks are those of healthy companies with long-term growth potential. These companies have strong underlying fundamentals, a capable management team and a competitive advantage in their industry.

By researching stocks carefully, your portfolio has a much better chance of surviving a market downturn. If stock prices are falling in the near future, the best thing to do is to simply stay focused on the long term and wait for your investments to rebound.

Keep in mind that in some cases, full market recovery could take months or even years. But as long as you invest in the right places and hold those stocks for the long term, you can weather a market meltdown unscathed.

No one knows for sure if the market will continue to boom or if we are headed for another downturn. But with the right strategy, you can have peace of mind knowing your money is protected no matter what.

Share.

Comments are closed.