3 reasons why we could avoid a 2nd stock market crash and get rich

first_imgSimply click below to discover how you can take advantage of this. Alan Oscroft | Monday, 29th June, 2020 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. Enter Your Email Address “This Stock Could Be Like Buying Amazon in 1997” See all posts by Alan Oscroft Our 6 ‘Best Buys Now’ Shares 3 reasons why we could avoid a 2nd stock market crash and get richcenter_img Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! 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. Image source: Getty Images 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. Are we heading for a second stock market crash? Will the FTSE 100 drop under the 5,000 level again, as it did at the worst point in the crash so far? I’ve already suggested three reasons why we really could be in for a second hit. But, ever the optimist, I’m still upbeat about our expectations for the rest of the year. So here’s the other side of the coin.Covid-19The Covid-19 pandemic has taken a terrible toll, and I don’t mean to play it down. But think back to those first days, when everyone was panicking and selling off their shares.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…Coronavirus cases were spiking so fast it looked like it would only be a matter of weeks before NHS capacity was totally swamped. Emergency hospitals were quickly built in an impressive response, to cope with the inevitable overflow. And the phrase “flatten the curve” was all over the news. No wonder we had such a big stock market crash.But look how it turned out. It was actually nowhere near as bad as those first predictions. NHS staff have clearly had a horrendous time, but hospital capacity did not break down. The emergency overflow hospitals were hardly used, and some weren’t even used at all.Economic forecastsWe had some downbeat economic forecasts released last week, and they really were terrible. The International Monetary Fund (IMF) is predicting a 10.2% shrinkage for the UK economy this year. You don’t need to be an economist to know that’s bad.But, the reaction to that dire outlook really surprised me. Over the course of the past week, the FTSE 100 has gained 7.5%. It looked like investors had already factored the expected fall into their stock valuations. Maybe the institutions had feared even worse, and they saw the IMF’s latest update as optimistic. And maybe a further stock market crash really is off the table now.Stock market crash overreactionMy main reason for thinking we won’t see a stock market crash sending the FTSE 100 to sub-5,000 levels again is my experience of investors. Every single time there’s been a downturn, a shock, a panic, investors have initially overreacted.It’s all about uncertainty, which investors fear possibly more than anything. And it’s only later, when the uncertainties are being resolved and we’re getting some actual numbers to look at, that the initial panic subsides.This isn’t just an investor reaction, I think it’s based on a general human reaction to fear and uncertainty. After all, it’s better to run away from something that’s not a sabre tooth tiger than not run away from something that is.How to handle a stock market crashSo will there or won’t there be a crash? And what should we do to prepare for either outcome? I reckon the way to deal with both possibilities is exactly the same. That’s to forget the stock market, and focus on individual companies.Look for great companies to buy into at fair prices. Look at their debt and cash flow situations. And if they look safe from going bust, and likely to generate cash for you over the rest of your investing lifetime, buy. Views expressed 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.last_img

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