- Investing amidst bearish markets could be scary, but long-term players see lucrative opportunities.
- It’s crucial to check the company’s valuation and prospects before investing.
It is easy to adopt the ‘buy mood when the stock market experiences surges. That’s because investors see their investments bearing fruits within no time. Market confidence shows prices can keep soaring even when some stocks are pricey.
However, the narrative fades quickly when stock markets see slumps. Most investors remain interested in how long the crash will last. Declining markets even trigger pessimism against stocks that seemed sure winners amid bullish markets.
This scenario seems to play out at the moment. The S&P 500 dipped into bearish conditions this week. Moreover, inflation remains elevated while the interest rate surges globally. The primary question remains, should anyone buy stocks now? Or worth a wait? Let us check.
Benefits of Buying Now
First and foremost, let us evaluate the benefits of purchasing stock now. Valuation is the huge one. Most innovative stocks have plunged to significant lows, attractive for bargain enthusiasts.
For instance, the Tesla (TSLA) trades at 56X forwards results from estimates, down from over 160 six months ago. That came as facets such as free cash flow and returns in invested cash surge.
The corona vaccine giant Moderna is another example. The company sees continued billions in returns and revenue. Moreover, Moderna (MRNA) trades at a 4.6-times forward earnings projection today. That is down from above 16 one year ago.
The industry boasts multiple examples. Stocks that traded with higher valuation some time ago are now available at reasonable costs. Also, you can buy now to avoid missing eventual rebounds. History shows the market always revives. Time is the only matter. Thus, your favorite stock might launch upticks at any time.
What about the danger of investing in stocks today? Well, the only advantage is the market could keep sliding. That means you can wait to buy your preferred stock at more discounted prices. What if it stays undervalued for long?
You will remain patient to reap from your investment. That’s why some investors hesitate to buy stocks amidst current uncertainty.
Nevertheless, savvy investors such as Warren Buffett believe in long-term goals.