Stock prices have plummeted, and investors are fearing a Recession. Covid-19 and a fall in Crude Oil prices have triggered profit taking in what was clearly (now), an overbought market. But is now the time to be buying up stocks which could be considered as being at discounted prices?
Due to the Coronavirus outbreak we are in the midst of never before seen share market movements. With the Australian ASX 200 having fallen to levels equal to early 2016 prices, they are arguably cheap at these levels.
At this point, we don’t know how long this will continue or what the long-term effects will be on individual companies and the economy as a whole. It is likely that it will be at least the middle of the year before we have any real understanding of what this means.
Having said that, prices are significantly reduced at the moment, despite the recent rally.
The share market has always historically rebounded from all major crashes and corrections and has continued to trend upwards, there is nothing to suggest that over the long term this won’t be the case again.
Is Now a Good time to Invest?
That all depends on your reasons for investing.
As a passionate believer in the share market as a great long-term investment, one that can provide both capital growth and tax effective income along the way, I believe it is always a good time to invest.
Share market investments come without all the hassles that other types of investments have. Such as Property with tenants that don’t pay rent and insurance bills (amongst other expenses). With shares, if you need access to your cash in an emergency, you are usually able to sell quickly and without much hassle.
Depending on how you invest there can be no ongoing costs to hold the investment. With online services now the norm, entry and exit costs are low and the initial investment amount required can be as low as $1,000.
What Future can we Expect for Shares?
Markets will continue to move and no-one knows what those movements will be. However, I would suggest that there are likely to be continued large movements.
There are investment strategies available to reduce the impact of that over time, and history will tell us whether now was a great time to invest. As I said at the start of the article, if you have a long-term view, I believe it is always a good time to invest and now just might be one of the greatest of all time.
If you need advice, or are looking to get started get in touch today.