For contrarian investors there are plenty of opportunities in the stock market right now. You just have to look for them. For many investors it sounds crazy to enter the markets now. It feels like any stock touched is destined to go lower. It is a frustrating time
Looking for a good stock right now is very difficult and timing the bottom even more challenging. Trying to time the market was never a good idea. But contrarian investors think different. They look for the opportunities ahead. and here are their 3 reasons why to buy stocks now:
1. The stock market always recovers
Since the stock market has existed, it has always recovered. Since 1926, there has been a 72% chance that the market will be up in any given year. In other words: roughly 1 out of every 4 years the market is down. It can put together strings of down years, but this is not the norm. The change, the S&P posts gains of 10% or more is a stunning 57% and most rallies happen by the end of the year!
So, if you look to invest for the long term and you can wait a year or more, the market should recover. This time will not be different.
2. Now is the best time to find good companies
When the markets are in a bad shape, we can identify good companies. Many overlooked stocks can suddenly become a must-buy stock. In this condition markets often exaggerate, or good companies simply go down because the overall market is down. As soon as sentiment will change, some stocks might fly.
3. You can accelerate your income faster
A dip in share prices doesn’t matter much if you’re focused on income-generating strategies and invest for the long term. A lower stock price just means you can buy more shares and collect more income faster!
Times like these can be stressful. Nobody wants to see negative returns in their portfolio. But there is plenty of opportunity to pick an undervalued stock for the long term, when you know where to look!
Sven Franssen