Are we on the cusp of another stock market crash? Some heavy share price falls on Monday certainly suggests investor confidence is deteriorating quickly. The FTSE 100’s just crashed back below 6,000 points amid worsening news flow surrounding Covid-19 infection rates. Meanwhile, the FTSE 250 has dropped to its lowest since July 31 as UK share investors fear a second mass lockdown in Britain.
I don’t think that stock investors need to throw in the towel, though. I’m not going to downplay the possibility of a painful and prolonged downturn in the global economy. I am, though, going to suggest UK share investors can use another stock market crash as an opportunity to make boatloads of cash.
Keeping the faith
I haven’t stopped buying UK shares despite the uncertain macroeconomic and geopolitical environment. In fact, I’m optimistic that buying following the recent market crash has improved my chances of making a mint in my Stocks and Shares ISA. I’m confident that the high-quality shares I’ve recently bought at low cost will soar in value once economic conditions improve.
As someone who buys shares with a view to holding them for a decade or more, the exact timing of the economic recovery doesn’t concern me. The inevitability of the economic cycle is enough for me. I know that sometime down the line I’ll be able to sell my shares at a much higher price than I recently bought them for as the macroeconomic landscape improves, corporate profits rise, and market confidence returns with gusto.
Getting rich from UK shares
No one is downplaying the costs of the Covid-19 crisis. It presents challenges the world hasn’t faced for almost a century. But every stock market crash comes at a time of what seems like unprecedented social, economic, or political upheaval.
Back around 2008 it seemed like the global banking system was in danger of collapsing. For a while thereafter it seemed like many European nations were teetering on the verge of bankruptcy too in a crisis that threatened to bring down the eurozone. This double whammy would have sent a shockwave through the global economy that would have taken decades to repair.
The behaviour of bullish UK share investors during that time should serve as lesson to us all. Even when it seemed like the sky was falling in they kept building their investment portfolios. And they made a fortune while those who simply sat on their hands, well, didn’t.
The FTSE 100 doubled in just nine years from its nadirs in early 2009. The FTSE 250 more than trebled over the same period. It’s no wonder the number of Britons who made millions from UK shares exploded in that time.
This is why you and I need to be prepared to strike when stock markets crash. And with the help of experts like The Motley Fool you can create a winning investment strategy and identify great investing opportunities to help your chances of getting rich with UK shares.
