The stock market rally that began in late March has been an impressive show, with the Dow and the S&P 500 up more than 40% since March 23. This has signaled to many that the market is not headed for a bear run. But what should investors do now?
The rally has been a godsend for many investors who had been waiting for the market to turn around from its coronavirus-induced crash. With index levels back to where they were before the pandemic, the rally has given hope to those looking to get back in the game.
However, though the rally has been a welcome reprieve, it’s important to remember that the market is still volatile. The economic effects of the pandemic are still being felt, and with no end in sight, the market could continue to be unstable.
The best approach for investors looking to make the most of the current market conditions is to take a measured approach. Rather than trying to predict the market’s future performance, investors should focus on making prudent investments that are in line with their long-term goals.
For investors who are able to take on more risk, there are opportunities to be had in the current market. Many stocks in the technology sector, for example, have seen tremendous growth in recent months. But it’s important to remember to diversify and not put all of your eggs in one basket.
Long-term investors should also use this time to review and rebalance their portfolios. This is a great opportunity to ensure that your investments are well-suited to your goals, and that you’re taking advantage of the current market conditions.
In the end, the key is to remain patient. The market has come back from the brink of disaster, but it’s still too early to tell what the future holds. Regardless of your investing style, it’s important to remember to stay diversified and to make decisions that are in line with your long-term goals.