The possibility of the stock market crash is weighing on a lot of investors’ minds. It’s understandable with global stock markets becoming increasingly volatile and conflict once again raging in the Middle East.
While investor concern is understandable, I’m not too worried about the noise at the moment. Here’s why.
The bigger picture still looks good
The FTSE 100 has managed to climb 7.4% year-to-date as I write on 7 July, and at one point was very much in stock market correction territory after a 10% pullback.
That was enough to set nerves jangling as investors positioned for an increasingly uncertain situation. However, taking a slight step back paints a very different picture. Here’s how the index has performed over different time horizons:
- 1 month: +3.1%
- 6 months: +6.4%
- Year-to-date: +7.4%
- 1 year: +21.4%
- 5 years: +50.1%
So, over the past 12 months, the index is still up 21.4%. That is an extraordinary return by any historical measure, and it is a reminder that short-term wobbles tend to look muted over a long enough time horizon.
That doesn’t mean risks aren’t real. Uncertainty over fuel supplies, the knock-on effects for the economy, and the broader geopolitical picture are all worth watching closely.
But uncertainty is just part and parcel of investing in stocks. Weighing up risk versus reward is the key, and long-term success requires both skill and patience.
Corrections can be a patient investor’s friend
There’s another way to look at a short-term pullback. For investors with a long-term horizon, a dip in price means the same companies can be bought for less than they cost a month ago.
I think back to the old adage of time in the market is better than timing the market. Identifying strong businesses and holding them through the noise has been a historically successful strategy.
Not all stocks are telling the same story
One of the things I find most reassuring is how well different parts of the Footsie are performing.
The index’s strength comes from its diversity — it spans energy, financials, consumer staples, mining, pharmaceuticals, and more.
BP (LSE: BP) is a case in point. As I write in the morning of 7 July, the company’s share price is 475.2p, up 13.6% in the past month and 27.8% higher than it was 12 months ago.
The company’s share price is down 13% in the past month as crude oil prices have dropped. It’s a stock I’m actively considering buying because I think there is plenty of more uncertainty to come and it could be a good buying opportunity.
Right now, we’re operating in an environment of significant complexity, geopolitical tension, supply disruption, rapid technological change and shifting global energy demand. Energy has rarely been more central to the world’s concerns.
Meg O’Neill, Chief Executive, BP – First Quarter 2026 Results Presentation
The 5.2% dividend yield has been recovering strongly as improved cash generation has allowed the company to rebuild its payout so I’m considering it.
That said, BP is not without risk. A sharp reversal in oil prices or a deeper global slowdown would put pressure on the price-to-earnings (P/E) ratio which has expanded considerably alongside the share price recovery.
In addition to BP, there are other top income stocks that I think yield hungry investors should be considering at the moment.
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Ken Hall does not hold any positions in the companies mentioned.
