I’d buy cheap FTSE 100 shares before the stock market rebound to make a million

Investors have a great choice of cheap FTSE 100 (INDEXFTSE:UKX) shares and should aim to invest before the next stock market rebound.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

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.

sdf

The stock market rebound faltered in the last couple of trading days, with the FTSE 100 slipping back after briefly topping 6,000. The retreat was always going to happen, and, in many ways, I’m glad it has. This gives investors another opportunity to buy cheap FTSE 100 shares before the next leg of the recovery.

If you want to make a million from investing in the stock market, it pays to take advantage of a stock market crash. That means there are cheap FTSE 100 shares wherever you look. If you buy today, you are building wealth for tomorrow.

Of course there are good reasons why shares are so cheap right now. The nation is in lockdown, and we don’t know how long it will last. GDP is set to fall sharply. Profits are plunging. More than a third of FTSE 100 companies have slashed their dividends. The stock market rebound will take time.

Cheap FTSE 100 shares abound

Share prices will not rise in a straight line. They may crash back down again. The volatility will last for a while.

There is nothing new in this. That is how a bear market works. Investors need to remember that while markets crash, they always recover, given time. History shows that investors who bought when FTSE 100 shares were cheap made fortunes when they ultimately recovered.

This means that long-term investors need to screw up their courage and buy shares today. Then sit back and wait for the growth to return, and dividends to be slowly restored. When they are, remember to reinvest them for growth, to turbocharge your plans to make a million.

Hold tight for the stock market rebound

Do not hold back waiting for the absolute bottom of the market, because you will never time it exactly right. Nobody can predict the future like that. The best thing you can do is invest when you have money to spare, with the aim of leaving it there for years and years. Decades, ideally.

Naturally, you cannot expect to make a million out of a single crash. You need to invest year after year, building a diversified portfolio of cheap FTSE 100 shares, taking advantage of buying opportunities like these. You could buy a few smaller stocks as well, to generate faster growth.

Every adult can invest up to £20,000 this year in a Stocks and Shares ISA. Invest as much as you can. Building a £1m ISA portfolio takes time, but just imagine the rewards.

The stock market rebound will take us all by surprise, just as the crash did. If you start loading up your ISA today, you will be ready.

When hunting for cheap FTSE 100 shares, look for companies with loyal customers, strong balance sheets, plenty of cash and minimum debt. These should recover faster is when the worst is over and the stock market rebound gathers pace.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Here’s what needs to happen for the BT share price to reach £5

The BT share price is up 40% in the last 12 months, but could this be just the beginning of…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

What needs to happen for the Tesco share price to reach £5?

The Tesco share price is up 27% in 12 months, but could this double-digit growth continue to £5? Zaven Boyrazian…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

3 US growth shares that could surge in August

As we head towards August, there are a number of exciting growth shares that might be close to taking off…

Read more »

Middle aged businesswoman using laptop while working from home
Investing Articles

This US stock could change the face of artificial intelligence

This US stock is a leader in agentic artificial intelligence and could dramatically change the way companies work in the…

Read more »

Finger clicking a button marked 'Buy' on a keyboard
Investing Articles

Analysts have upgraded this FTSE 100 stock to Buy. What should investors do?

Associated British Foods shares have been uninspiring for some time. But is it finally time to consider buying the FTSE…

Read more »

Man changing battery on electric bicycle
Investing Articles

Prediction: in 12 months the sizzling National Grid share price could turn £10,000 into…

It's been another solid year for the National Grid share price and the dividend yield is decent too. So why…

Read more »

Businessman using pen drawing line for increasing arrow from 2024 to 2025
Investing Articles

Up 185% in 3 years, why does the market love this FTSE 250 stock

Over the past three years, this stock has vastly outperformed the FTSE 250. Dr James Fox takes a closer look…

Read more »

A handsome mature bald bearded black man in a sunglasses and a fashionable blue or teal costume with a tie is standing in front of a wall made of striped wooden timbers and fastening a suit button
Investing Articles

Looking for growth, dividends, or value? These 3 ETFs could be smart ideas to consider

Exchange-traded funds (ETFs) provide a way for investors to spread risk without sacrificing the possibility of huge long-term returns.

Read more »