What I’ll do as fears of a stock market crash increase

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first_imgWhat I’ll do as fears of a stock market crash increase Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! 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. “This Stock Could Be Like Buying Amazon in 1997” Andy Ross | Saturday, 30th January, 2021 Enter Your Email Address 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. Andy Ross owns no 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.center_img Our 6 ‘Best Buys Now’ Shares Image source: Getty Images Simply click below to discover how you can take advantage of this. Renowned stock-picker Mark Rogers and his 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. Across social media and traditional news outlets, stories of a market bubble and possible stock market crash are popping up with increasing regularity. In the face of all this noise it can be hard to know what to do. As a dedicated long-term investor, I’ll remain invested in good companies despite increasing fears, while keeping a sensible amount of cash in reserve. For me that’s about 10% of my portfolio. However, there is no right or wrong amount, that’s just what I feel comfortable holding as cash.The possible warning signs of a stock market crashSpecial Purpose Acquisition Companies (SPACs), increasing numbers of first-time investors, new reporting metrics by companies and analysts, increasing amateur day trading and the rapid share price increases of tech stocks are all possible warning signs of a stock market crash. Certainly some of the optimism and the behaviour in the market is concerning for me.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…However, irrational exuberance can go on for a long time and there’s nearly always some level of fear about a stock market crash. That’s why I’ll keep one eye on the market as a whole, but focus my energy primarily on picking good stocks that fit with my investment strategy. I believe the best investors typically spend most of their time buying great companies at a fair price. That’s what I intend to do, so despite the stories of a stock market crash I’ll keep buying shares – albeit cautiously and hopefully sensibly.At the end of the day, predicting exactly when a crash will happen is near impossible. Just ask any economist in 2009. Or indeed most people in January 2020.For me the way I want to build my wealth through the stock market is long term. By taking a long-term view of things I can ride out short-term market corrections without losing too much, or panicking. Investing defensively when valuations are stretchedIn some industries it’s possible valuations have become stretched as investors rush into the latest exciting new trend. Renewable energy and hydrogen are potential examples. That said, share prices in those industries could of course continue to rise if demand continues. If the market does crash though, those shares, where valuations are quite high compared to the actual financial performance of the business, are likely to be hit the hardest.To achieve a reasonable balance between protecting my money if markets turn down and actually making money from shares, I intend to buy shares that provide growth at a reasonable price. I’ll also add some higher yielding shares, especially those with defensive characteristics. That’s those companies where demand traditionally trends to hold up no matter what’s going on in the economy. Think industries like supermarkets, tobacco, and so forth.As fears of a stock market crash circulate I’ll be focusing on my stockpicking. That means buying good companies at a fair price, keeping some cash in reserve, and thinking about my long-term plan. See all posts by Andy Rosslast_img read more