How I’d invest in shares after the FTSE 100’s dramatic declines

first_imgSimply click below to discover how you can take advantage of this. Kevin Godbold | Wednesday, 4th March, 2020 Enter Your Email Address See all posts by Kevin Godbold “This Stock Could Be Like Buying Amazon in 1997” How I’d invest in shares after the FTSE 100’s dramatic declines Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! 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.center_img Image source: Getty Images. 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 As I write this on Tuesday 3 March, the US Federal Reserve just announced its intention to cut its benchmark interest rate by 50 basis points. The move aims to fight an economic slowdown that could gain traction because of the COVID-19 coronavirus outbreak.And, according to news reports, the Bank of England is considering interest rate cuts as part of a broad range of “steps to support the economy and financial system.”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…I think that’s important news because the UK markets tend to follow those of the US. And the American interest rate move appears to have boosted stock prices in the US, building on Monday’s gains – at least for the time being (15.30 hrs in the UK on 3/3/20).Banks unhappyThe finance sector is down in the US though. Banks won’t like falling interest rates. And on the London stock exchange, I note that Lloyds Banking Group, Barclays, HSBC and other banks are all showing negative moves with their share prices – a case of the UK following the US again, perhaps.It’s a fluid situation, which is why I was careful to record the date and the time of my comments above. It could all change tomorrow, next week, or indeed by the end of the day. And one strong possibility is that we haven’t seen the bottom of the move down for the markets.It’s typical of markets in a down-trend to show sharp reversals, for example. Indeed, the gains of the early part of this week could disappear in a flash, and share prices could plunge lower still, even undercutting their lows of last week. If the news flow relating to COVID-19 really digs in and accelerates, we could see an eventual top-to-bottom correction of 50%, or more.Indeed, COVID-19 is a wildcard that has thrown out the window most previous assumptions I was making about the markets. So how is a poor investor supposed to handle such powerful set-backs?Where to focusOne place to start could be to make sure that the shares you’re holding are all backed with companies running strong, high-quality businesses. I’d look for players dominant in their trading niches and businesses with defensive, cash-generating characteristics. You can get a good idea about how the stocks you’re holding measure up by looking at their financial and trading records.I like to see a record of generally rising revenue, earnings, cash flow and shareholder dividends. And it’s good to have robust profit margins and decent returns against assets and capital invested. For me, modest levels of debt are desirable too.Maybe it’s time to think again about the shares you may be holding of companies with weaker business models, such as cyclicals and those facing high competition.If you’re happy with the underlying quality in your portfolio, maybe a second step could be to ignore the general news and concentrate only on what your investee companies are reporting. Tough it out, and hold through this uncertain period.Finally, you could put more money to work in the markets if decent stocks representing quality businesses sell at discount prices on any further stock market falls. Or drip-feed money into managed and tracker funds.For what it’s worth, I’m doing all those things with the expectancy that 10 years from now I’ll be glad I did. Kevin Godbold has no position in any share mentioned. The Motley Fool UK has recommended Barclays, HSBC Holdings, and Lloyds Banking Group. 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. 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.last_img read more