Stock markets lurched down again today. Some news reports argue the move lower is because the US plans to impose new trading tariffs on goods from Europe. Any such move would hit the European Union and the UK.
On top of that, the number of cases of Covid-19 is surging in some places around the world. For the time being, the UK numbers still appear to be falling.
When it comes to making a million, start here
As I write, the US’s Dow Jones Industrial Average is down about 400 points and the UK’s FTSE 100 is around 150 points lower. This is stomach-churning volatility and nervous investors are probably wondering if the markets will plunge into a full-on crash that rivals the one in the spring.
If we see a worldwide second wave of the pandemic, I reckon there’s every chance that new lockdowns could cause a second market crash this year. And the prospect of a US-Europe trade war won’t help economies to recover one bit.
But my guess is a full-on second bubble in death and infection rates is unlikely. One of the things the scientific and medical professionals keep saying is that they are learning new things about this virus – and how to control it – every day.
And President Trump’s blustering about new tariffs just sounds like the opening stance before serious negotiations take place between the parties. My guess is that he will be unlikely to do anything much that harms the US economically. For example, he’d be unlikely to order anything that hurts international trade when world economies are trying to recover from the effects of a pandemic.
However, we never really know what will happen next. But one thing is certain, there’s usually something to worry about when it comes to investing. That’s why you’ll often hear the expression, ‘stock markets tend to climb a wall of worry’.
Invest, invest, invest!
I’d handle all the uncertainty now by continuing to invest in the shares of high-quality businesses. If there is another crash, we’ll have the opportunity to buy a bigger slice of each of these wonderful businesses we’ve identified for the same money. And we’ve already seen how fast shares can recover when the conditions are right for such a move.
Indeed, the seed of every new bull market is planted at the bottom of each bear market. So if you commit to a regular investing regime – perhaps by investing money every month – and adopt a long-term investing time horizon, you could do well in the stock market.
But there’s some valuable work you can do right now. Roll up your sleeves and research your socks off! Now is the time to build up a watch list of all the great stocks you’d one day like to own. Then, when opportunity strikes – such as right now with all this volatility – you can pounce and make your well-timed long-term purchases towards making a million in the stock market.
Kevin Godbold has no position in any share 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.