Sick of the sinking market? The volatility? So is everyone else. It’s the “new normal” these days; investors better get used to it.
They should not, however, feel scared. Not anymore, at least.
Because over the next few weeks, the market is about to present traders with an unprecedented opportunity to buy stocks. It’s likely to be one of the biggest “value plays” ever.
And no, that’s not hyperbole. Nor is it an unpopular opinion. Analysts and institution heads spanning the globe are preparing for the next “bounce.”
Treasury Secretary Steven Mnuchin, for example, told CNBC this morning that he thinks the current sell-off will be short-lived. Moreover, investors looking to “buy low” have a fantastic opportunity to do so.
“This is a short-term issue. It may be a couple of months but we’re going to get through this and the economy will be stronger than ever,” Mnuchin said.
“I look back at people who bought stocks after the crash in 1987, people who bought stocks after the financial crisis. For long-term investors, this will be a great investment opportunity.”
Mnuchin, a former hedge fund manager, is absolutely right. Throughout the market’s history, there have been several crashes.
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And each time, the market recovered in the months that followed. Often in dramatic fashion.
Mnuchin argues that the COVID-19 correction is unlike the financial crisis or dot-com bubble. Instead, he says it resembles 1987’s “Black Monday,” when a rapid sell-off sent stocks lower.
“This is not like the financial crisis, where people don’t know when this will end: We will get through this,” Mnuchin said.
“By the end of the year, I think you can expect we’re going to have a big rebound in economic activity.”
Thus far, the recovery rally has fallen short of expectations. Futures were up big this morning, but as of midday, the major indexes are barely treading water.
That doesn’t mean, however, a rebound won’t happen. The market has a nasty habit of going higher long-term. Stocks will eventually rise.
Perhaps even as quickly as they fell.
That’s great news for wayfaring traders. Now, they just have to get their timing right – something that will become much clearer (and easier) very soon.
Especially if the market can kick off another post-crash rally in the meantime.