The FTSE 100 has surged 30% since the 2020 stock market crash! Here’s what I’d do now

first_imgThe FTSE 100 has surged 30% since the 2020 stock market crash! Here’s what I’d do now The FTSE 100 has delivered a strong recovery following the 2020 stock market crash. Although it continues to trade 13% down on its price from a year ago, it is nevertheless around 30% up on the lowest point it reached in the March 2020 crash.Despite the recent stock market rally, a number of companies continue to trade on low valuations relative to their historic averages. Buying a wide range of them for the long term could lead to impressive returns. Meanwhile, holding some cash in case of a further market decline may be a prudent move.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…Buying cheap FTSE 100 shares todayClearly, some FTSE 100 stocks now trade at relatively high prices. Investor sentiment has improved significantly as vaccine rollouts have continued and economic forecasts have improved.However, this does not mean that further gains for the index are necessarily ahead. As the 2020 stock market crash showed, investor sentiment can very quickly change from positive to negative. As such, it may be a sound idea to only purchase companies with valuations that have not run away to levels that are difficult to justify. For example, buying stocks with margins of safety relative to their sector peers or historic averages could be a prudent move.After the FTSE 100’s recent stock market rally, such a task may be more difficult than it was just a few months ago. However, as mentioned, the index continues to trade down on its level from a year ago, and some sectors such as property, financial services and retail could offer good value for money at the present time.Holding cash in case of a stock market crashThe track record of the FTSE 100 highlights how unpredictable its performance can be. Certainly, it has produced high single-digit annual total returns since its inception in 1984. However, along the way it has experienced numerous stock market crashes, corrections and bear markets that have caused major declines in a short space of time.Such events have not suddenly become obsolete. They are very likely to occur in future, although predicting when they will take place is a very difficult task. Therefore, taking a prudent approach and holding some cash in a portfolio could be a sound move. It may provide peace of mind should the current stock market rally turn into a crash. Moreover, it could allow an investor to capitalise on low valuations caused by a sudden deterioration in investor sentiment over a short time period – as was the case in March 2020.Holding some cash instead of being fully invested in FTSE 100 shares may produce lower returns than those available in the stock market. However, over the long run such a strategy may be beneficial in terms of accessing low stock prices in a future stock market crash. 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. Peter Stephens | Monday, 15th February, 2021 Our 6 ‘Best Buys Now’ Shares Are you on the lookout for UK growth stocks?If so, get this FREE no-strings report now.While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.And the performance of this company really is stunning.In 2019, it returned £150million to shareholders through buybacks and dividends.We believe its financial position is about as solid as anything we’ve seen.Since 2016, annual revenues increased 31%In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259Operating cash flow is up 47%. (Even its operating margins are rising every year!)Quite simply, we believe it’s a fantastic Foolish growth pick.What’s more, it deserves your attention today.So please don’t wait another moment. 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. Simply click below to discover how you can take advantage of this. FREE REPORT: Why this £5 stock could be set to surge Get the full details on this £5 stock now – while your report is free. Image source: Getty Images. Enter Your Email Address See all posts by Peter Stephenslast_img read more

Read More