A second stock market crash is ahead! This is why I think it can help you retire early

first_img 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. Simply click below to discover how you can take advantage of this. 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. “This Stock Could Be Like Buying Amazon in 1997” Enter Your Email Address 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. Image source: Getty Images center_img Our 6 ‘Best Buys Now’ Shares A second stock market crash is highly likely. Although it looks like the March bloodbath for shares has been left behind, it wasn’t. But it doesn’t mean that investors should be afraid. In fact, there’ll be many opportunities for them to retire early. Why a second stock market crash?Well, there are plenty of factors that can lead to another stock market correction. Most importantly this is the risk of a second lockdown. The world is suffering from another wave of Covid-19 infections right now. It may soon lead to a second wave of lockdowns, which could have serious economic consequences. Other important factors are the US elections and social unrest in this country. US-China relations also pose some substantial risks.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…Moreover, share prices, especially in the US, don’t reflect companies’ fundamentals and this is a big problem. Stock market quotes tend to recover ahead of corporate earnings but many analysts argue that shares are overbought. Poor economic conditions, in turn, suggest that many businesses cannot be profitable now by definition. That’s especially true of businesses like airlines and tourist companies. The prompt actions of the central banks, meanwhile, helped the stock indexes around the world recover. They did so by printing money and exchanging it for bonds. As a result, the financial markets got liquid again. But it seems to me that we are in the situation of a stock market bubble. Unfortunately, all bubbles burst. And a second stock market crash may follow this stock market rally.If history is any guide…An example that immediately springs to mind is that of the dot-com bubble in the US. The mass media kept overhyping Internet technologies and the Fed kept easing monetary policy. That encouraged many investors to buy loss-making high-tech companies at unreasonably high prices. The bubble burst as these loss-making companies filed for bankruptcy protection. So, many people lost their money. This led to the recession of 2000–01. However, this crisis also led to the rise of multinational giants like Amazon, e-Bay, and Netflix. You see, when crises like that occur, larger companies with good balance sheets survive, whereas smaller competitors go out of business. So, these larger companies even flourish and grow in size in the long run. It might sound strange but a similar situation occurred during the Middle Ages as a result of the plague. The economic and social chaos accompanying it gave rise to large corporations.So, how can I get rich?I fully agree with my colleague Peter Stephens. It would be quite a shame to miss such a rare opportunity to retire early. But in order to take advantage of a second stock market crash, you have to have some spare cash. So, I wouldn’t recommend keeping all the money invested in the stock market now.At the same time, before parking your cash, you have to understand your attitude towards risk. If you are risk-averse, it might be best for you to keep a significant part of your money in an index fund. FTSE 100 has a really good recovery record. So, investing into a fund matching the Footsie’s performance seems to be reasonable. But buying largest individual companies with high credit ratings might produce even better returns. There are plenty of these in the FTSE 100. A second stock market crash is ahead! This is why I think it can help you retire early Anna Sokolidou | Friday, 3rd July, 2020 Anna Sokolidou has no position in any of the shares mentioned in this article. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Amazon and Netflix. The Motley Fool UK has recommended eBay and recommends the following options: long January 2021 $18 calls on eBay, short January 2021 $37 calls on eBay, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. 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. See all posts by Anna Sokolidoulast_img

Leave a Reply

Your email address will not be published. Required fields are marked *