When the market nosedives into a crash, savvy investors know it's an opportune time to buy quality stocks at discounted prices. The same tenets apply no matter what caused the crash. Markets are irrational and will overshoot to the downside in times of fear.
But high-quality businesses will continue to operate regardless of the market's psychotic volatility. What's more, they possess highly attractive economic characteristics, no matter what industry. What's good for diamonds is good for diapers, as they say.
One ASX 200 stock that stands out to me in this fashion is ( ). The business is a little expensive right now, trading at more than 25 times earnings. But in the event of a market downturn, I'd be ready to pounce.
Here's why I'd be eager to add it to my portfolio if the market takes a dip. It's important to first define a 'market crash'. According to brokerage platform CMC Markets, a stock market crash is on a stock exchange or major stock index within a single trading day.
" What's important is that an entire index must drop to be called a crash (not a single stock), and the drop must be more than 10%. So if the stock market rises by, say, 20% in a year and then falls by two percentage points one day as the (NASDAQ: NDX) did in September, this isn't a crash. By the way, if you're worried by this, "you're not geared for stocks", FundStrat's .
Alas, when the stock market experiences turbulence, it's crucial to focus on companies with strong fundamentals and a proven track r.