This week’s stockmarket plunge has handed investors a rare opportunity to buy stocks at bargain-basement prices, say analysts.
The Wall Street tsunami, exacerbated by high-frequency computerised selling, has brought share prices down below their true level in many cases.
With both the US and the global economy in strong shape, the sell-off was unexpected and prompted by excessive profit-taking on the back of interest-rate-rise fears, says Royston Wild of The Motley Fool.
He cites the latest figures from the National Institute of Economic and Social Research that show economic growth increasing at its quickest pace since 2011. It now believes the world economy expanded 3.7% last year, up 20 basis points from its November estimate.
“There were plenty of dirt-cheap FTSE 100 shares for share selectors to choose from before the sell-off, and now the investment case for many of these companies is even more compelling,” he says.