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Market Crash 2020: Brace Yourself for Another Market Bottom

Investors around the world seem to have breathed a heavy sigh of relief over the last month. It seems as if the worst must be over. After markets around the world fell by about 40%, a rebound seemed to be under way. Well, according to some analysts, another market crash could be underway.

Like an aftershock from an earthquake, analysts predict that 2020 isn’t quite done with us yet. Even with a potential vaccine moving forward with trials, the pandemic won’t be the only thing affecting the markets moving forward, though it can still be to blame for another market crash.

Market crash take two

Sure, the markets have been coming up since the crash back in March. Even with earnings reports coming in that are far less than ideal, most investors knew this would be the case. So instead of fearing the current market situation many investors are taking advantage of it. And that’s great, to a point.

There’s an area that investors haven’t quite considered, and that’s the next wave. During the first wave right after the market crash, there were layoffs, closed industries, even business closures, sending the markets into a tailspin.

With another quarter going by and no end in sight for the pandemic, investors should count on even more layoffs, closed businesses, and threatened industries. While it’s unclear how long this next drop could last, it’s unlikely that there will be much growth until at least the fourth quarter.

Any hope?

Ever heard that saying, “History repeats itself?” Canadians won’t have to look back too far when this market crash happens. As you’ll have just seen, what goes down comes back up. The year 2021 could see a huge rebound that investors will want to be prepared for.

It’s best to avert your eyes in the near term during the next market crash and set yourself up in the meantime to hopefully withstand this next downturn.

I would definitely recommend taking this time to talk to your financial advisor. Talk about what you want in the short and long term when it comes to your investment portfolio. While you’ll definitely want to buy up some solid stocks with a long history of share and dividend growth, there’s also an opportunity to get in on one big stock during the next market crash.

Shopify Inc. (TSX:SHOP)(NYSE:SHOP) has been a huge surprise during this market crash. Most analysts believed it wouldn’t be able to handle the pressure of an economic downturn, yet the company came out on top.

During the last earnings report, Shopify had a 47% year-over-year increase in revenue, which was in line with its history of exceeding analyst expectations.

Shopify managed to even move forward with its Shop application, where customers can now go to one place to find all the businesses they want to follow. Customers can buy, pay and track their shipments all from one location. It’s no wonder that the stock surpassed the $1,000 mark this month. Shopify has now become a surprise defense stock during these hard times.

So if another market crash happens, I would highly recommend investors take a look at Shopify. While a dip might come, it won’t last long as this e-commerce giant continues its race to the top.

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Fool contributor Amy Legate-Wolfe owns shares of Shopify. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify.

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