The FTSE All-Share index is trading 0.5% below its last close this Thursday afternoon. But do not let that fool you. It is by no means in a weak place. In fact, it is just a shade below the highest it has ever been. That in itself is a reason for me to consider investing £5,000 in FTSE stocks now. Because if it is on its way up, then my money could grow rapidly now.
FTSE stocks’ impressive bounce back
But it is worth figuring out whether that will in fact be the case. Recently, the stock markets got a rude shock when Russia decided to invade Ukraine. And the FTSE All-Share index dropped as well. After all, it could have a big impact on the global economy. The two countries, particularly Russia, are rich in commodities. And we have already seen the dizzying increase in the likes of oil prices because of it, feeding the inflationary fire that many parts of the world were already battling.
It is, however, a testament to the resilience of the markets, that they have bounced back in no time. This is not coming out of thin air, either. Companies listed on the FTSE have seen a lot of improvement in results since the worst of the pandemic. And this is despite the fact that the Omicron variant has resulted in some setbacks. Also, they have been flagging rising cost pressures as a challenge as well, but have been able to sustain their earnings.
Risks remain, but so do rewards
I am not saying that either the war or rising inflation or maybe even another episode of coronavirus cannot derail FTSE stocks. They can, and realistically, probably will. I am watching inflation in particular. At 5%+ levels in the UK, it is at 30-year highs. Even in the US, it is at 40-year highs. And things are expected to get even worse from here until the end of the year. Also, some other crisis could erupt that will send chills down stock market investors’ spines. Like we saw in the case of the debacle with Chinese real estate developer Evergrande last year.
What I’d do now
My point is only this. Despite these events, there is a good chance that FTSE stocks will continue to rise over time, even if this means some pullbacks from time to time. Some of the biggest companies in the FTSE 100 index, for instance, have been around for an unimaginably long time. They have seen the two World Wars and the Great Depression in the first-half of the 20th century. And many more crises from then on. Most recently, we saw the one-of-a-kind pandemic that kept us locked in our houses for what, looking back, seems like an unimaginably long time.
Based on this past history and FTSE companies’ performance, I have little doubt that my money can keep growing if I stay invested or increase my investments by another £5,000.
