The Motley Fool

The stock market crash may not be over. But I’d buy FTSE 100 shares and hold them forever

Image source: Getty Images.

Trying to estimate when the stock market will cease falling and recover is almost impossible. The spread of coronavirus and its economic impact is a known unknown. So too is investor sentiment towards the wider stock market.

However, buying shares in high-quality FTSE 100 stocks today could be a good move. This may not prove to be the very lowest ebb of the FTSE 100’s crash. But the index’s valuations and track record suggest that now is a buying opportunity for long-term investors.

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...

Market crash

The FTSE 100’s recent decline is among its fastest ever recorded. Although there have been some signs of recovery in between its declines, the overall trend has generally been downwards. This situation may persist over the coming weeks and months depending on how coronavirus ultimately impacts the world economy.

Judging exactly when to buy during such a period is fraught with difficulty. News flow is highly changeable, and investors risk waiting too long and missing out on the early stages of a market comeback.

Low valuations

As such, focusing on the long-term value available in the stock market at the present time could be a good idea. Many of the FTSE 100’s members offer wide margins of safety after recording major falls in their share prices. Compared to their historic averages, their valuations are exceptionally low in many cases. This could mean that, over time, they are able to deliver high returns as their profitability and valuations recover.

Although a sustained recovery may seem unlikely right now, the FTSE 100 has experienced bear markets several times in its past. In some cases, it has taken a number of years for the index to deliver a full turnaround from its decline. But on every previous occasion it has managed to achieve this goal. Therefore, buying shares today while they appear to be cheap in many cases could be a sound means of generating high returns in the long run.

Managing emotions

One of the biggest challenges facing all investors at the present time is managing your emotions. It is easy to worry about the performances of your existing investments, which are likely to have experienced major falls in recent months. This may dissuade you from buying new stocks, thereby reducing your chances of capitalising on the FTSE 100’s low valuation.

However, most investors wish to buy shares while they trade at low prices. In order for the index to trade at a low level, there usually must be a good reason for it to do so. Although this can mean there are short-term risks, the world economy is very likely to recover in the long run.

Therefore, by focusing on the long-term prospects of a diverse range of shares, you can benefit from the cyclicality of the stock market. This process may not be an easy one, but history shows that some of the most successful investors have bought while their peers have been selling. This has helped them to generate relatively high returns in the long run.

“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!

Peter Stephens 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.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. 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.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.