The Motley Fool

Don’t waste the stock market crash! I’ve just invested £1k in the FTSE 100

Image source: Getty Images.

The stock market crash has knocked 7.5% off the FTSE 100 this morning, and it now trades just below 5,000.

So how did I respond to the increasingly dire-looking situation? I put my money where my mouth is, and did what I’ve been suggesting readers consider doing. I bought shares. In this instance, investing £1k in a FTSE tracker.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

If you don’t take advantage of moments like these, you may regret it one day. It isn’t easy going against the crowd though, especially when they’re stampeding for the exits. I reckon this stock market crash has further to run, so why did I act today?

Every investor has to accept that they’ll never call the exact bottom of the market. Anybody who does will have to put it down to luck rather than judgement. Markets are impossible to time, given all the variables and uncertainties.

Stock market crash is also an opportunity

Yet I took a chance because 7.5% in a day is an almighty drop. It seems to have been driven by the US Federal Reserve’s move to slash interest rates to zero. Investors were worried that the Fed knew something they didn’t.

They also know the impact will be limited, as the recession will happen due to a collapse in demand as countries close and people self isolate. A drop in mortgage rates is hardly going to persuade shoppers to go on a spending spree, given current uncertainties.

Once markets have digested the news, they may calm down a little. Some kind of relief rally is likely. I won’t buy into that.

There are so many attractive blue-chip companies on the market trading at fire-sale prices. I’ve been waiting for a moment like this, ever since the FTSE 100 and other global indices soared in the wake of the financial crisis.

I took advantage of that stock market crash too, but wished I’d been bolder. I don’t want to kick myself this time.

The FTSE 100 will remain volatile

If you’re buying individual companies for your Stocks and Shares ISA, look for those with strong balance sheets, healthy cash flows, loyal customers and minimal debt. I took the tracker route this time. Next time I’ll probably target individual stocks.

I’m aware that in a few days I might look silly. This stock market crash could have a lot further to run, and my £1k could be worth a fair bit less.

If that happens, I’ve a cunning plan. I will invest another £1k and pick up more shares at the new reduced prices. If the FTSE 100 dips even further, then in I go. There’ll be more buying opportunities.

I plan to leave the money invested for 15 to 20 years at least, by which time I hope the coronavirus is just a nasty memory. And the opportunity to buy the FTSE 100 at below 5,000 looks like the investment of a lifetime.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Harvey Jones 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.

Where to invest £1,000 right now

Renowned stock-picker Mark Rogers and his select team of expert analysts at The Motley Fool UK have just revealed 6 "Best Buy" shares that they believe UK investors should consider buying NOW.

So if you’re looking for more top stock ideas to try and best position your portfolio in this market, then I have some good news for your today -- because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.