Don’t waste the stock market crash! Why I’d start buying FTSE 100 shares

first_imgSimply click below to discover how you can take advantage of this. Roland Head | Sunday, 29th March, 2020 Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Don’t waste the stock market crash! Why I’d start buying FTSE 100 shares “This Stock Could Be Like Buying Amazon in 1997” Image source: Getty Images 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. 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.center_img Enter Your Email Address Our 6 ‘Best Buys Now’ Shares The recent market crash has been scary. But if you’ve got some cash set aside, I think now could be a brilliant time to start investing, especially in some of the big FTSE 100 stocks.This might seem a strange view to take during the current crisis. But history suggests that we will get through this. And when we do, we’ll need most of the same products and services we were buying before the lockdown began.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…Today I want to share three tips from the Motley Fool for investing during a bear market. If you’re thinking about buying FTSE 100 shares, I think these will get you off to a great start.Don’t try to time the FTSE 100On Monday last week, the FTSE 100 dropped below 5,000 for the first time since 2009. On Tuesday, the FTSE rose by 9.1% – the second biggest one-day gain on record.So is the market rising or falling? I don’t know. In my experience, a market crash is often followed by a period of volatility, when share prices bounce around a lot. We may see some false dawns before the real recovery begins.My suggestion is that you don’t try to time the market. I’d just start buying now.Over the last 35 years, market crashes have always been a great time to buy the FTSE 100. The big crashes in 1987, 1999, and 2008 were all followed by strong recoveries, even though things seemed grim at the time.As long as you have a long-term view, I think the risks of buying today are pretty low.Buy stocks you can hold for yearsI’m sitting on some big paper losses after this month’s crash, but I’ve not sold any shares and I’m not too worried. Over time, I’m confident that most of the companies I own will recover.I can afford to take this view because I intend to hold my shares for many years, ideally forever.This is one of the secrets of the stock market. In the short term, it appears to be unpredictable and risky. But over many years, shares generally rise. Over the last 100 years or so, the UK stock market has returned an average of about 8% each year. That’s much better than cash or bonds.I only buy dividend stocksHowever, I only buy shares that pay a dividend. There are a couple of reasons for this.Firstly, dividend payouts are generally much more stable than share prices. In my experience, it’s much easier to hold onto shares during a market crash if your dividends keep coming.The current crisis is an exception – many FTSE 100 dividends have been cancelled. But I expect most of these payouts to be resumed within a year or two, as things start to return to normal.Another advantage of income stocks is that I can use my dividends to buy more shares. In turn, these will pay dividends too. Over time, this reinvestment (known as ‘compounding’) can lead to very big gains with very little effort.For example, a £10k investment with a yield of 5% that’s reinvested over 10 years would be worth £16,288. But if you withdrew the 5% yield each year, you’d only get a total of £10,500.Compounding was described by Albert Einstein as the eighth wonder of the world. I believe it’s a great reason to start buying FTSE 100 shares today. Roland Head has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. 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. See all posts by Roland Headlast_img read more