I can understand why many UK share investors remain reluctant to push the boat out and go bargain hunting today. But it doesn’t mean that extreme caution is the right play to make today. By sitting on your hands, you’re missing out on a rare opportunity to supercharge your wealth levels.
Stock market crashes are uncomfortable events for individual investors, and the one of early 2020 was a doozy. Not since the depths of banking crisis almost a decade and a half ago have UK share prices fallen off a cliff to such an alarming degree. And it’s quite possible Stock Market Crash 2.0 could be around the corner as Covid-19 infection rates soar and lockdown barriers are put up again.
Be brave, make millions
I’m not scared by the prospect of a second stock market crash though. And it’s not because I’m a sadist or a thrillseeker. It’s because history shows us those who are brave enough to keep buying UK shares after sharp corrections can make millions.
I’ve continued to buy shares in my Stocks and Shares ISA after the market crash of late February and early March. I’ll do dip buying again if UK shares prices tank again.
During market crashes panicked investors sell everything, including the kitchen sink, with rock-solid quality stocks sold off along with the dogs. This gives you and I the chance to nip in and snap up these unwanted beauties at very little cost.
Legions of investors all over the world made millions following the 2008/2009 stock market crash by following such a strategy. Thousands of British share pickers made a fortune in products like Stocks and Shares ISAs.
They watched the value of their UK shares rocket from the lows that they bought in and, as economic conditions improved, corporate profits rose again and confidence came flooding back into financial markets.
Getting rich with UK shares
I reckon investors can expect another striking rebound in UK share prices too. History shows us the strong recovery from the banking crisis was no one-off. You can look at the performance of the stock market following the Black Wednesday crisis in 1992, the dotcom bubble of the early 2000s, the Chinese stock market wobble in 2015, or indeed any other significant event in the 20th and 21st centuries. UK share prices have always come roaring back.
And investors can take extra confidence that a strong share market recovery like that following the banking crisis will occur. Central banks kept the money taps switched on to the max back then to assist in the global economic recovery.
A flurry of interest rate cuts and generous quantitative easing programmes following the Covid-19 outbreak support the idea of another terrific snapback in UK share prices.
So don’t stop investing. Those who continue to invest in UK shares after stock market crashes get seriously rich. And experts like The Motley Fool (and their exclusive reports) are there to boost your chances of making a million, or more.
Royston Wild 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.