The Stock Market Sell-Off - Phase 1
by Therese Faessler, on Apr 20, 2020 4:45:00 PM
Now is the time to start watching the stock market seriously. A basic rule to start investing is to invest when stocks prices are down. The stock prices of many good, solid companies are 5-30% lower than they were in February 2020, or before height of the novel corona virus Covid-19 global-wide spread.
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This is an optimal time to start putting together a portfolio of companies you would like to own and watch progress in the coming weeks. Observe what is happening with your portfolio without actually investing anything. No one knows when the stock markets will hit their lowest point. It is important to watch your favorite companies starting now.
How do new investors get started?
Filter and sort to find companies on sale within your preferred country, industry and stock market. Sort by 3 month performance (since the global spread of Covid-19) to find those companies having been most negatively impacted by the corona virus. Remember, based on historical data, the virus will probably have less long-term effects on companies that survive it. Which companies will survive? Those companies with sufficient liquidity as well as future demand for their products.
Goldman Sachs says, “Investors with longer-term investment horizons should remain invested in stocks”.
Use a stock's Fair Value to rely on the analysts' estimate of what the long-term intrinsic value of a stock is. Dividing the Fair Value by the current stock price allows for the comparison of all stocks with regard to how far they are from their long-term intrinsic value. Sorting by (Fair Value / Current Stock Price), you can see which stock currently has the most potential based on the analysts' evaluation of the stock's long-term intrinsic value.
If you are new to investing and looking for the right time to get started, there's no better time than now. Plan to own value stocks with companies paying good dividends who offer products or services projected to have future demand, this is a secure hedge against inflation.