According to Forbes, the stock market across the world has never been as turbulent as it did during the coronavirus period. From the beginning of 2020, when the COVID-19 pandemic emerged, stock markets have fallen, and some have collapsed. Between February 19th, 2020, and March 23rd, 2020, the S&P 500 stock market had lost over a third of its value. The stock market collapse suddenly ended the longest stock market bull that started 2009 up to the beginning of 2020.
Amid these market dynamics, you might be asking yourself whether to invest or to wait for a while. However, since March 2020, the stock market has been steadily rising, and the vaccine news has accelerated the recovery. So, the question remains, is this the right time to invest in the stock market?
Stocks Have Withstood Difficult Economic Blows Before
The COVID-19’s effect on the global economy was indeed severe and unexpected in 2020 and even now. The pandemic led to millions of unemployment claims due to the economy’s temporary standstill. Nearly all countries placed restrictions on international travel, shut down businesses, halted production, and placed lockdown directives.
Luckily, the United States has been reporting a decline in the daily new infections, and the economy is re-opening up. However, the virus’s economic impact was huge, and the government had to stimulate the economy through a stimulus package.
As an investor, you should understand that the uncertainties due to COVID-19 aren’t the first economic blows the stock market has withstood. For instance, the stock market endured the Great Depression, the 2008-2009 financial crisis, and World War II. Despite these setbacks’ intensity, the stock market has always recovered and even rose to new highs in the preceding years. These historical statistics indicate that stocks always make a comeback no matter the prevailing conditions. Ultimately, this is a sufficient reason why now is a good time to invest in the stock market.
Waiting for the Stock Market to Recover is Fooling Yourself
Another key reason why now is a great time to invest in the stock market is that it’s nearly impossible to predict market trends anyway. And because you can’t predict when a high or crash is coming next, you should avoid timing the stock market altogether.
Additionally, it makes financial sense to buy stocks when they are trading low than when they are trading high. As such, you are better off purchasing a piece of the stock market shares of high-performing firms and holding them as a long-term investment. Warren Buffet, a renowned stock market investor, advises that the risks of not investing during lows are high compared to the risks of investing anyway. Therefore, this indicates why now is the perfect time for you to invest in the stock market.
Stocks are Always on Sale
The stock market is always open for selling and buying of stocks despite the prevailing market conditions. Although the stock market has been recovering steadily, most market indices are still trading significantly low compared to their previous performance. For example, the S&P 500 is trading at lows of up to 11% from its previous highs.
Despite the uncertainties of the stock market, there are plenty of stocks you can buy now. Presently, you can purchase the S&P 500 stocks at better prices. In the end, the stock market remains one of the best investment alternatives available for you to invest in even when other markets collapse. As such, this is the best time for you to invest in the stock market and wait for the right time to sell them. Eventually, the stocks you buy now will make you good money soon, and you’ll be glad to have made the step. Investing in a forex trading course would be a wise investment.
Final Remarks
The year 2020 had an unprecedented impact on the global economy due to the COVID-19 pandemic, and the stock market wasn’t spared. Most stocks have fallen in value to their lowest ever, while some have collapsed completely. However, despite the turbulent conditions, there are great and valid reasons why now is a good time for you to invest in the stock market. For instance, stocks have withstood hard economic blows before, waiting for the stock market to recover, fooling yourself, and stocks are always on sale. Ultimately, these reasons are sufficient enough for you to invest.
