Volatility has returned to the stock market. But, in fairness, it was never far away. And as an investor looking for FTSE stocks to buy for my diversified portfolio, I welcome the uncertainty.
After all, to paraphrase the words of super-investor Warren Buffett, we pay a high price for a cheery consensus of opinion. But what’s most useful is the opposite side of that piece of wisdom: we pay a lower price for a gloomy consensus of opinion.
Tuning out the ‘noise’
It’s always tempting to try to figure out reasons for a general decline in positive sentiment towards stocks. But there’s always something to worry about if I want to worry. And the news headlines, social media, and a constant bombardment of opinions from multiple sources can crank up the intensity.
However, much of it is just ‘noise’. And for me, most of it is best ignored apart from a handful of trusted sources. The only thing that really matters is the shares in my portfolio and the FTSE stocks I want to buy. So, I’m focusing on them and the news coming from the businesses behind them.
And despite the recent volatility in the general market, some of my shares have been going up. Indeed, many businesses are in great shape despite recent worrisome media headlines. In fact, I’m so confident about making the best investment decisions without media ‘help’ that I’m closing much of it down. So, for me, it’s no more Twitter, minute-by-minute headlines, discussion boards and TV updates. And the big bonus is much-reduced screen time.
And why not? My investing will probably be better. And I can’t deny my happiest times in life occur away from the digital world. But it’s a source of irony to me that contractors are digging up my neighbourhood to install fibre optic cable for improved Internet, just as I’m aiming to use it less!
Finding the best FTSE stocks to buy
However, the media barrage serves a purpose if it keeps stock valuations depressed. Let’s paraphrase Buffet again. He likes to buy his burgers and his stocks as cheaply as he can. And so do I. Shares are more likely to provide a decent return over time if I don’t over-pay for them in the first place. If I do pay too much, underlying business progress can end up being absorbed by a reducing valuation, leading to lacklustre stock performance.
And despite near-term worries, I reckon the UK and world economies will likely see an extended recovery from coronavirus. And I’m even more certain that many businesses will grow and thrive in the years ahead. For example, I like the look of actuator and valve maker IMI in the FTSE 250 index. And I’m also keen on FTSE 100 energy company SSE and building materials distributor CRH.
However, nothing is guaranteed in the world of investing. And even though I’m keen on the valuations and forward-looking prospects of these businesses, I could still lose money. Indeed, all stocks carry risks. But I’ll carry out further research on these three because I reckon they are potentially some of the best FTSE stocks I can buy now for the recovery.
