Investors haven’t had a simple year. It’s simple to lose hope for the future with rising inflation, a bear market, and the looming possibility of a recession.
The good news is that. No matter how bad, every single bear market and recession in history has finally given way to a bull market. Nobody can say with certainty how long this market downturn will persist, but we do know a bull market is coming.
Given that we are currently in the midst of the recession, that may not be comforting at the moment. But now is the moment to begin making plans for the upcoming upswing. This is the counsel of renowned investor Warren Buffett, who is an expert at capitalising on bull markets.
Why is this the ideal moment to invest?
The last thing on your mind may be to invest more in the stock market when prices are low and many people are worried about a possible recession. But now is the moment to buy if you want to increase your profits.
Warren Buffett wrote an opinion post for The New York Times back in 2008. He stated in it that his purchasing was guided by a straightforward rule: “Be fearful when others are greedy, and be greedy when others are fearful.”
Currently, all stock values are at their lowest points in several months. The tech sector, for example, has been particularly heavily damaged. Now is the time to “be greedy” if you’ve been seeking for a chance to stock up on high-quality stocks at a significant discount.
How to increase your income
You can invest now in addition to benefiting from decreased prices. You might realise large gains when the market eventually recovers.
Let’s take the example of investing in Amazon in March 2009, during the height of the Great Recession. You would have had returns of about 113% alone in the following year. You would have experienced gains of around 560% over five years.
It is more difficult to profit from a bull market’s rise if you only invest at high peaks. However, you might position yourself for substantial gains by investing at a time when the market is at its lowest point.
Nobody can predict with certainty how long the market will take to recover, which makes investing during a slump one of the most difficult aspects of the process. However, it will ultimately recover. And if you put off investing for too long, you can lose out on some of those returns.
In the Times article, Buffett states, “Let me be clear on one point: I can’t foresee the short-term swings of the stock market.” “However, it is more likely that the market will rise, maybe significantly, before either sentiment or the economy improve. So spring will be over if you wait for the robins.”
Even though it might not seem like it, this is one of the finest times of the year to invest. The cost of stocks is at its lowest point in a long time. If you have the means, investing now can help you benefit from the upcoming bull market.
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