In the current market crash, investors can generate long-term returns of about 20% per year! In comparison, a normal market delivers total returns of about 10%.
Investing $5,000 today for annualized returns of 20%, investors will arrive at more than $110,000 (specifically, $110,930) in 17 years.
It’s important to continue investing in the stock market now, because attractive valuations on a diversified random stocks will likely deliver long-term annualized returns of more than 12%.
Imagine how far you would get if you actually took the time to select wonderful businesses to partner with! It’s even better if you’re able to save and invest regularly throughout this market crash.
Just don’t expect this bear market to end anytime soon.
Market crash: No quick fix
From the looks of the coronavirus situation, there likely won’t be a quick fix for the current market crash. As of writing, there are nearly 1.2 million confirmed cases of COVID-19 around the world. Not everyone infected is tested. Therefore, the actual numbers are higher in reality.
So far, more than 64,600 lives have been lost. Additionally, there are those who are severely ill with the virus and clinging dearly to their lives.
Lockdowns in cities and countries around the world are going to take time to take effect before the number of new cases will ease. Moreover, it relies on people actually adhering to the guidelines of social distancing and washing hands properly.
At writing, the number of cases in the U.S. is still increasing rapidly. Canada’s growth rate has tapered off a little, and let’s hope it’ll slow down even more!
To combat the coronavirus, many parts of the economy are shut down or working at a very low capacity. However, this must be done to prevent as many as possible from being infected as well as save as many as possible lives down the road.
Market crash: Now’s the time to continue stock investing
Experts say there could be a working vaccine by early 2021. If so, investors could have the rest of 2020 to invest whatever savings they can put together. For example, a guy called into Market Call on BNN and said he was putting this year’s vacation fund to work.
It’s the perfect time to put your savings to work.
To invest for annualized returns of 20%, investors should consider mega growth trends that will continue well after the coronavirus situation comes to pass. For example, consider investing in top stocks in technology, healthcare, and disruptors.
Shopify (TSX:SHOP)(NYSE:SHOP) is both a disruptor and technology stock. The stock has used technology, innovation, and strategic acquisitions to give entrepreneurs a level playing field against large retailers.
Specifically, Shopify provides all the back-end tools that are needed, including payments, marketing, analytics, apps, inventory and fulfillment, order management, etc.
The growth stock has corrected about a third from its all-time high in early 2020. Miraculously, it’s still sitting on its 50-day simple moving average and hasn’t fallen through yet.
This shows that the stock has strong price growth momentum. Since the stock is resilient in this bear market, it’s going to soar in a normal market.
Other than Shopify, here are other megatrend growth stocks that’ll help you arrive at $110,000 sooner with $5,000.
The post Market Crash: How to Turn $5,000 Into $110,000 appeared first on The Motley Fool Canada.
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