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

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Screen of price moves in the FTSE 100
Image source: Getty Images.

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.

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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.

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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.

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