Stock market crash: I’d invest £500 a month

Stock market crash: I’d invest £500 a month

first_imgStock market crash: I’d invest £500 a month Kevin Godbold | Monday, 6th April, 2020 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. “This Stock Could Be Like Buying Amazon in 1997” Enter Your Email Address The stock market crash happened just in time for ISA season. Today, we all have a new £20,000 allowance and I’d use mine in a Stocks and Shares ISA.It never feels comfortable to invest in shares when the market has been crashing. But we can often make good returns as shares recover from a depressed state. 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…Mixed short-term stock market outcomesBut with so much volatility in the markets, we can end up with mixed results, at least in the short term. For example, some shares have been tearing upwards since spiking down recently, such as YouGov, British American Tobacco, Spirent Communications, Plus 500 and BP. And some shares have continued to fall since the coronavirus pandemic hit, such as HSBC, Vistry, Lloyds, Norcros and Gately.I reckon the key to successful and worry-free investing now is to adopt a long-term horizon. Share price movements in the short-term will likely seem insignificant when viewed from 10 years or so in the future. And we can also mitigate some of the effects of market volatility by drip-feeding money into shares rather than investing a lump sum all at once.And I’d aim to invest around £500 each month. In that way, even with shares moving up and down, I’d never invest all my money at the highs or at the lows. In the end, such pound-cost averaging will likely work to produce a satisfactory long-term investing outcome.However, we have the ‘problem’ of picking the ‘right’ shares. And, at times such as these, it can be tough to make successful share picks. But with a generally depressed stock market such as this, I’d be inclined to go for a collective investment vehicle, such as an index tracker fund.Several advantagesThere are several advantages to such instruments. Firstly, the monthly investment thresholds tend to be low and most trackers will accommodate a £500 per month investment. Secondly, running fees are low – typically less than 0.5% — which makes your investment cost-efficient. Thirdly, you’ll gain instant diversification with your investment spread across many underlying shares.And diversification like that is a strong advantage in these markets. Market set-backs and economic recessions can damage some stocks irreparably – think banks after 2008, for example. But by diversifying widely in a tracker fund, you’ll avoid the risk of having a great deal of your money tied to the performance of one duff share.I’d go for an FTSE 100 tracker fund because it has cyclical firms in its makeup, which have strong bounce-back potential. And I also see the Footsie as having the potential to pay a large dividend yield. But I also like the FTSE 250 index of mid-cap shares for its growth potential. And America’s S&P 500, which has undeniable previous form.But you can choose between many trackers these days. And I’d be sure to select the accumulation version of each fund so that dividends are automatically rolled back in to compound my investment. Simply click below to discover how you can take advantage of this. Kevin Godbold has no position in any share mentioned. The Motley Fool UK has recommended HSBC Holdings and Norcros. 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.center_img Our 6 ‘Best Buys Now’ Shares 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. 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. Image source: Getty Images. 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