It’s been another choppy week in the stock market, with the Footsie down substantially over the last week.
When there’s bearish sentiment towards investing in shares, indices tend to trend down.
Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!
Part of this, of course, is down to day traders — looking to ‘get rich quick’ — who are selling out of their positions.
Remember that market movements come from the actions of any and all investors.
As much as we beat the drum for buy-and-hold investing here at TMF, it’s important to recognise that we Fools are not alone in the stock market (cue The X-Files theme).
So don’t go selling all your shares in a downturn because you think all other long-term investors are doing the same!
Get rich slowly
There is so much risk involved with day trading, not least because those speculators aren’t looking to invest in great companies that appear underpriced; as shareholders, they aren’t willing to wait patiently for others to recognise the value in an under-the-radar business.
But we as Fools are!
So that’s why we seize opportunities to buy shares in beaten-down firms that were already on our watchlists. For that’s what many do when shopping: if something you like is cheaper than usual and you can afford to, few of us wouldn’t buy it…
Mundane Mr Market
While the stock market can be described as erratic, let’s be honest, it doesn’t wildly swing from day to day.
Perhaps that would be a trader’s dream, I’m not sure. But the reality is that there are never days strung together when, say, the FTSE 100 leaps 10% one day, plunges by a similar amount the next, soars again the following day… you get the picture.
I mean this in the kindest way, but actually markets are pretty dull.
Since inception, the Footsie has trended upwards. Sure, there have been some troughs in there. The dotcom, financial, and coronavirus crashes, for instance. But each time the market has recovered.
Not only that but history suggests it has gone on to — and will — thrive.
Buy now, benefit later
When we see market weakness, a savvy stock-picker in it for the long game doesn’t check their portfolio immediately; instead, they review their finances to see how much money they might be able to afford to invest now (that they won’t need in the next three to five years).
And that’s also what Fools are doing around the globe currently. Analysts are working hard to update their valuations of recommendations in services like Share Advisor and Hidden Winners, to help identify cheap UK stocks for our members.
While I personally am not an analyst or advisor in one of our premium newsletters, I am an investor. And I’m taking the time to assess my savings, and see if I can allocate more money into the stock market.
Because these buying opportunities don’t come around all that often. And present-day me wants to be able to take advantage so that future me can reap the rewards!