3 things I’ve learned from the 2020 stock market crash

first_img 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. Enter Your Email Address 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. What has the 2020 stock market crash taught me? Actually not a lot that’s new, as I’m old enough to have lived and invested through a few downturns. Nothing as steep as this one, mind. But it’s driven home quite a few things that I do need to keep being reminded of.I think there’s plenty to learn this year, for everyone from beginners to experienced investors. So here are three things I have seared into my mind by the events of 2020.5G 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…Nobody expects a stock market crashI was talking to someone thinking of getting into shares recently. I did my usual spiel about investing for the long term, and how the stock market beats other forms of investing hands down.“But there might be another stock market crash,” he said. No, not might. Will. For sure. They’re inevitable, though thankfully usually quite far apart. But nobody seems to expect them, and almost everyone is surprised when we get one. “Well, smarty pants, you didn’t expect the Covid-19 pandemic, did you?” I might get thrown back at me.No, I didn’t. But that’s missing the point. Every stock market crash starts with something unexpected. But unexpected things happen all the time. And even if we can’t know what the next unexpected thing is going to be, we do know we’re going to get them.We can always benefit from panic reactionsI’ve also been reminded of one seemingly inevitable thing. Whenever there’s bad news, the market will overreact. It often happens when companies report disappointing results. Investors will sell out, and the share price falls. But so many times, it hits a deep low and then starts to recover. Yet when we have a general stock market crash, we tend to see it to excess. Just look at the FTSE 100 chart this year. In a little over month from the pandemic’s arrival, the index had slumped 35%. But then markets picked up and and the Footsie hasn’t been that low since. So I ask myself, what was so bad for the stock market in March that was so much better in June or July? I don’t see anything.So, for me, a stock market crash is clearly a great investing opportunity. And it can pay to buy in the early days.Invest for a crash, all the timeWhat’s the best way to invest to minimise stock market crash losses? A lot of people have been asking that question in 2020. But that’s too late. At least, for this crash. It’s no good selling stocks that have already crashed and buying safer ones after they’ve risen.And what would we do later, when the crash is over? Sell our defensive stocks, which will very likely have fallen back by then? And then buy back into the ones we sold, almost certainly at a recovering higher price? That seems like a guaranteed way to lose money to me.My approach to investing for safety is to buy into the very best companies I can find. I mostly like ones offering essential goods and services, and with little or no debt. But I think the time to buy those is all the time. Not after a stock market crash has arrived. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! 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. Our 6 ‘Best Buys Now’ Shares Views expressed 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.center_img “This Stock Could Be Like Buying Amazon in 1997” See all posts by Alan Oscroft Simply click below to discover how you can take advantage of this. Alan Oscroft | Saturday, 28th November, 2020 Image source: Getty Images 3 things I’ve learned from the 2020 stock market crashlast_img read more