The stock market’s been erratic over the past few weeks. It’s seen sell-offs that have many people comparing it to recent crashes, and there have been times when it’s looked like it may be on its way back to recovering. Calling it a roller-coaster ride would be an understatement at this point.
We’re seeing a bear market and, unfortunately, there looks to be no end in sight. Stocks are crashing and investors are seeing their portfolios getting wiped out and losing gains accumulated over many years.
However, the good news is that the reason that stocks are down is primarily a result of the coronavirus. Although it’s a concerning time all over the world, it doesn’t mean that all of a sudden companies like Shopify or Microsoft are worth less than they were just a couple of months ago.
The reality is that the stock market will recover, as it always does. It’s recovered from the Great Depression, from wars, recessions, and it’ll recover from the coronavirus too. It’s nonetheless an unnerving time to have money in stocks.
But there’s one thing investors can do to help get themselves through this:
Stop checking stock prices
If you’ve invested in value stocks with solid businesses, you should have little reason to worry. That’s why obsessing about how much your investments are down could do more harm than good. Selling amidst a panic — and especially when your stocks may be at their lows for the year or several years — is an easy way to secure a loss.
It may take weeks or months before we see a sustained rally to recover from these declining share prices. But it’s important to remember what’s happening is temporary and due to short-term factors weighing down the markets.
It’s not rational, long-term investing at work here. And that’s why if you’re a long-term investor, there’s room to profit from here if you’re willing to stay the course and invest in blue-chip stocks.
But checking stock prices every hour or every minute can let your emotions get the better of you and lead to a bad decision.
Good value buys out there
One stock that’s always a good value buy is Bank of Nova Scotia (TSX:BNS)(NYSE:BNS). The Big Five bank has lots of diversification with operations outside Canada. It has a strong presence in the U.S. and in Central America, offering investors a unique investment opportunity that can translate into some long-term growth that less diversified banks may not benefit from.
Another reason to buy the stock: its dividend. Scotiabank pays investors a quarterly dividend of $0.90 and the bank has increased those payments over the years. Two years ago, the stock was paying its shareholders $0.82 and it hiked its payouts by about 10% since then.
A good dividend can help pad the stock’s returns and a growing one gives investors a lot of incentive to hang on for the long haul.
Whether the market continues crashing or not is not going to matter. The markets will recover, as will Scotiabank. It may take some time to do so, but it could prove to be well worth it and buying at today’s lows could result in a big payoff later on.
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Fool contributor David Jagielski has no position in any of the stocks mentioned. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Microsoft, Shopify, and Shopify. The Motley Fool recommends BANK OF NOVA SCOTIA and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft.