Whatever you do this weekend, don’t waste this stock market crash. The FTSE 100 may have fallen sharply, losing a quarter of its value, but no meltdown lasts forever. The 1987 stock market crash was even more painful, but the recovery was astonishingly swift. Investors who wasted that opportunity regretted it. Do not repeat their mistake.
Today is your last chance to top up this year’s Stocks and Shares ISA allowance, and I would urge you to take advantage if you have money to spare. When governments get their act together and master the coronavirus crisis, today’s stock market crash could turn into a swift recovery and help you retire early.
The greatest investor of them all, Warren Buffett, knows this. He says he usually made his “best purchases when apprehensions about some macro event were at a peak”. Macro apprehensions are at a peak today, which means now is the ideal time to follow Buffett’s lead and make some of your best purchases.
Retire early with a Stocks and Shares ISA
Investors who take the opportunity to buy top FTSE 100 stocks at bargain prices, will reap the benefit in the longer run. By picking up bargain stocks, you can boost your chances of getting rich and retiring early.
Which is what investing is all about.
It takes courage to invest at times like these. A quick look at history should strengthen your resolve. In October 1987, the FTSE 100 fell 23% in just two days, an even faster share price crash than today. Overall, the index fell 36%
Yet within two years, the market recovered all of its losses, and then powered upwards. Investors who held tight were comfortably ahead, because they earned dividends during those two years, which the wise ones reinvested for growth.
FTSE 100 and the 1987 stock market crash
The Covid-19 crash is different to 1987. Every crash is, when it comes to the minor details. Broadly though, the pattern is the same.
Markets crash, then recover. A bull run follows. Those who bought when share prices were low celebrate their good fortune. Many strike it rich. Some retire early. Nearly all learn a valuable lesson. Buying top stocks at bargain prices pays off.
There are plenty of top FTSE 100 bargains as stock markets crash, including this one. If you wait until the worst is over, you will have missed your moment.
Warren Buffett knows what to do
I can’t say when the recovery will come. Warren Buffett wouldn’t even try. As the Wizard of Omaha said: “Predicting the rain doesn’t count, building the Ark does.” You can retire early by seizing today’s opportunity to buy top FTSE 100 bargains inside a Stocks and Shares ISA.
Investors who braved the fastest ever stock market crash in 1987 grew rich. Now is your chance to do the same. Maybe you could retire early too.
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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.