It can be tempting to head for the hills when UK share prices crash. Watching the value of your investments fall off a cliff is a horrible feeling. All that hard research and hard saving gone up in a puff of smoke, right?
Well, not quite. I don’t worry when corrections like the 2020 stock market crash happen. Instead I see it as an opportunity to buy. Long-term investors like me can pick up cheap UK shares and build a five-star portfolio of quality, oversold companies after the fall. Following the pack and selling your holdings during a crash is one of the worst things you can do.
Thinking like Warren Buffett
Remember, you and I don’t actually lose any money on our UK shares unless we sell them at a cheaper price then we bought them for. Baling out during a crash, therefore, leaves you nursing big losses at a stroke. You lose the chance to ride the rebound in share prices and reverse your misfortune by selling up. It may take years but history shows us that stock markets always bounce back.
Absorbing the words of experienced and successful investors like Warren Buffett is always a good idea in uncertain times like these. They serve as a reminder that UK share investors can still expect to make gigantic returns over the long run. Even if their investing timeframe coincides with periods of extreme social, economic, and political upheaval.
Buffett once wisely told his audience that “in the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”
Make a million with UK shares
This is why I’ve continued to load UK shares into my own Stocks and Shares ISA. I’m confident that, irrespective of a new flu epidemic and a fresh bout of global trade wars, my stocks will still create excellent returns during my lifetime (for the record I buy shares with a view to holding them for a minimum of five years).
It’s also why I’d keep on buying shares even if another stock market crash happens in 2020. There are tonnes of top-quality UK shares trading at low prices today. Another severe correction will allow you and mr to snap up these cut-price corkers at even cheaper prices. And this will allow us to realise even greater returns over the long term as the price recovery will be even larger.
This is how hundreds of Stocks and Shares ISA investors made millions during the last decade. And it’s an opportunity that The Motley Fool’s packed library of exclusive reports can help you make the most of. So do some research and invest in UK shares today.