2022 has been characterised by red hot inflation, rising interest rates, and falling markets. The world’s largest index, the S&P 500, has fallen 14% year to date. But before it rebounded in July, the shares reached a low of $3,636, marking a 23% year-to-date loss. Over the course of a year, the index has fallen 8%. Across the pond the situation isn’t nearly as bad, with the FTSE 100 down 0.01% for the year. But this still highlights its stagnant returns.

However, since July, things seemed to have been picking up. So, is now the right time to be investing in the stock market? Or should I be searching for safer ways to grow my capital? Let’s take a look.

The year so far

As mentioned, the reason markets have been suffering is tied to the macro economy. Inflation has been reaching record figures in the last few months, caused by a combination of supply bottlenecks, Covid-19 government intervention, and the Russia-Ukraine crisis. In July in the US, inflation reached 8.7%, and in the UK, it reached 10.1%.

The way that central banks are controlling this sky-high inflation is by raising interest rates. Both the UK and US have hiked their rates. When rates rise, people are more likely to keep hold of their money, as they can earn a higher risk-free rate. This deters them from buying speculative assets like stocks, and stock market valuations usually take a hit.

One of the main reasons that markets have rebounded since July, is the news that US month-on-month inflation fell between June and July. This signified that inflation was coming under control and seems to have restored investor confidence in markets and the wider economy.

However, things are far from plain sailing. Energy prices are still soaring, which is keeping inflation high, and putting pressure on businesses around the world. What’s more, Citi recently announced a forecast of 18% inflation in the UK by January. It also highlighted it expected an interest rate of between six and seven percent to be enforced to control this. If these figures are correct, the UK economy could plunge into recession.

Is now the time to invest?

The good news about the stock market is that there are shares that perform well during recessions and times of economic turmoil. ‘Defensive’ industries like supermarkets, telecoms, and high-dividend stocks are usually a good play, but still carry heightened risk.

As for myself, I’m on the lookout for bargain companies with established reputations. Stocks that are beaten down by negative market sentiment, but still have solid underlying fundamentals. Anything other than such stocks I’m going to steer well clear of. Although the markets have seen a slight rebound, there’s no telling how inflation and interest rates will develop over the remainder of this year. However, I still think that investing in stock is my best bet at building long-term wealth, and as such I will still be investing during this turbulent period.

The post Have we seen the worst of the 2022 stock market crash? appeared first on The Twelfth Magpie.

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• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Dylan Hood has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Scary-sounding phrases, like “bear market” and “carnage ahead”, popping up on your news screen can be worrying and unsettling for anyone.

As a stock market investor myself, it’s impossible not to wonder, “Should I be doing something about all this?”

But from my own experience, there are two very good reasons not to panic.

When investing in stock markets, perspective matters

When it comes to investing in shares, perspective is a great thing to have. And as a long-term Foolish investor, it’s the first reason I’m not running around like the proverbial headless chicken.

You and I both know scary numbers make for great clickbait headlines. But what happens if I look at the same thing – but from a different perspective?

For example, if I look at the performance of one of the most popular ETFs available, Vanguard FTSE Allworld (LSE:VWRL), what can I see?

At the time of writing, it had lost over 4% in the last five days: that’s not insubstantial for a well-diversified tracker. It gets worse if I look at the year-to-date performance — that’s down over 10%.

But wait — if I continue to zoom out, I see that over the last five years the exact same tracker has made over 35%. So, despite this year’s losses, that’s still an annualised return of over 6%.

It gets better yet if you look at the same Vanguard ETF over 10 years, working out at an annual return of over 9%.

So yes, it’s easier to invest when stock markets simply rise smoothly. But as a long-term investor, I knew I needed to expect market corrections along the way. 

That’s why when it can seem all doom and gloom, remembering the bigger picture gives me a great reason not to panic.

The importance of a diversified portfolio

Now, it’s all well and good talking about long-term averages on a global tracker, but as a Foolish investor I also hold several individual shares. That can be a different ball game entirely.

For example, if my portfolio only contained Netflix shares, I would be down over 70% this year. And even though it’s still up on a five-year basis, that would be hard to handle for sure.

But here’s the thing: if I’ve done a decent job of diversifying my portfolio, I likely have other shares that have increased in value.

This diversification effect means my portfolio value is far less exposed to those single large shocks — which is another good reason not to fret over the recent stock market moves.

But markets are falling — what should I do?

So should I be doing something about the recent stock market falls? Personally, if anything, I’ll be adding to my investment portfolio over the upcoming weeks. There are several good companies out there with share prices becoming increasingly attractive.

Yes, I may have to see them in the red for a while, but if I choose wisely then eventually my investment portfolio should end up even stronger as a result.

A long-term perspective with a well-diversified portfolio will always give me the best chance of success — as well as my two reasons I’m not panicking over the stock markets!

The post 2 good reasons why I’m not panicking about stock markets appeared first on The Twelfth Magpie.

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• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
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Michelle Freeman holds shares in Vanguard FTSE AllWorld ETF. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Beating the stock market on a consistent basis, over a long period is a difficult task. Maybe almost impossible. However, Warren Buffett and his partner Charlie Munger are among very few investors who have ever achieved such a feat. His fund, Berkshire Hathaway (NYSE: BRK.A) has outperformed the S&P 500 by almost 3,000% since its inception! So, here’s how he does it.

Quality is invaluable

It’s no secret that Warren Buffett only invests in quality stocks that provide good value. Over his decades of investing, he’s reiterated that a good investment has three main factors:

1. A good valuation with room for growth.
2. Strong pricing power and fundamentals.
3. An excellent moat with a margin of safety.

This is evident when analysing his company’s portfolio. The firm has positions in many of the world’s biggest companies. Many of these stocks have one thing in common. They’re market leaders that exhibit quality profit margins and healthy fundamentals.

A buffet of stocks

As the US S&P 500 flirts with bear market territory, the Oracle of Omaha has been going on a shopping spree. Warren Buffett has been buying shares in excellent companies for cheap valuations, having done the same during the 2008 financial crisis. He’s made mistakes in his investing career too, but he learns from them and moves on.

Be fearful when others are greedy, and greedy when others are fearful.

Warren Buffett

The current forward price-to-earnings (P/E) multiple for the S&P 500 stands at 16.6. This is below the five-year average of 18.6, and 10-year average of 16.9. As such, Warren Buffett has increased and even bought positions in several blue-chip stocks. These include PC giant HP, oil behemoths Chevron and Occidental Petroleum, and recently, entertainment conglomerate Paramount Global.

These purchases allow Warren Buffett to dollar cost average, as he continues to buy value stocks on the dip. Berkshire’s move to increase its stake in oil also allowed the firm to capitalise on sky-high oil prices. This has allowed the fund to hedge against the potential slowdown in earnings from its other positions. Consequently, Berkshire Hathaway has outperformed the S&P 500 by almost 20% this year.

Keeping it simple

Warren Buffett has always stressed on keeping investing simple. Buy shares in a great business for less than it’s worth, with managers of the highest integrity and ability. But what is a great business? As hinted at earlier, these are businesses with low debt, high levels of cash, healthy margins, strong growth, and an inelastic good/service. While this may seem simple, companies exhibiting all these traits are difficult to find.

So, despite already having an array of renowned names on his portfolio, the 91-year-old has expressed his regret in not purchasing shares of several top US companies. One is a personal favourite of mine, Alphabet. Although the tech giant came short of earnings expectations recently, he sees plenty of promise in the Google-owning firm. With a 20-1 stock split around the corner, I think Berkshire may add Alphabet to its portfolio. If so, I’d be even more confident in Warren Buffett’s ability to continue beating the stock market.

The post How does Warren Buffett beat the stock market? appeared first on The Twelfth Magpie.

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• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

John Choong owns shares of Alphabet (Class A Shares) at the time of writing. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. American Express is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool UK has recommended Alphabet (A shares), Alphabet (C shares), and Apple. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Golden opportunity?

Given the wild swings for stocks and lower cash value from high inflation, the casual observer might have expected gold to do well. On the contrary, this week saw gold trade at its worst levels since February. This was due to the strength of the US dollar, as it hit a 20-year high, rebuffing views that the greenback is a dying dinosaur. While both gold and cash offer more safety than equities, gold has underperformed the stock market over most time periods. As such, I feel the golden opportunity isn’t investing in gold, but rather in the stock market over the long term.

There’s been lots of noise but no real direction as to whether the falls are a great buying opportunity, or just the first step in a much more serious bear market. If inflation remains high, further rate rises look inevitable. This is bad news for property, equities, and bonds, especially if paired with an economic downturn. Despite that, it’s worth noting that although the stock market seeing plenty of red lately, history’s on its side. Since its inception, the US S&P 500 has rebounded from every single market crash, for instance.

Time in the market is better than timing the market

Many investors seek to time the market by finding a bottom before investing. Unfortunately, it’s very rare that this actually works. The best-known investor globally, Warren Buffett, once said: “I haven’t the faintest idea what the stock market is going to do when it opens on Monday.” More often than not, investors have to suffer a little bit of pain before seeing a return on investment. Be that as it may, being patient is easier said than done. It’s never easy investing your savings only to watch them lose half their value. Hence why it’s crucial to pick the right stocks.

Picking the right stocks

That brings me on to how to do that. Do your due diligence — that’s the most important thing before investing in the stock market. Like the oracle of Omaha, I follow a strict checklist before purchasing stocks. I look for:

• Solid fundamentals (Low debt and healthy cash levels).
• A company with pricing power or high margins.
• Great earnings potential.

These qualities sound simple, but they’re more difficult to find in many companies than not. Nonetheless, one such company that exhibits all these traits is Google owner, Alphabet. The mega-cap boasts an excellent balance sheet, healthy margins (30%), and great earnings potential through the development of its many offerings. Nevertheless, its share price is down 20% this year as the firm came in short of earnings expectations and future underperformance remains a risk. However, I’ll be capitalising on its lower price to add to my Alphabet position.

The post My 3 best tips on how to invest in today’s stock market appeared first on The Twelfth Magpie.

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John Choong owns shares of Alphabet (Class A Shares) at the time of writing. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Alphabet (A shares) and Alphabet (C shares). Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

FTSE Miners down and fliers up

That’s what many miners have been thinking as they saw their share prices slide. Antofagasta and Rio Tinto were hit particularly hard as their biggest customer, China, reported disappointing purchasing managers index (PMI) figures. The authorities in China continue to lock down major cities over Covid-19 infections.

On the flip side, FTSE airlines were rejoicing this week because of freer travel. A positive Wizz Air update led to airline shares rising higher on Monday. The budget airline carried over 3.62m passengers in April, a 542% increase. However, an only half-decent report from IAG then sent airline share prices on a descent. The group finished the week 10% lower. Nonetheless, IAG reported a positive outlook, expecting to achieve an operating profit by Q2.

Oils profits spurt

Although BP lost a hefty $25.5bn to cover its exit from Russia, it still doubled underlying profits in the first quarter, to $6.2bn. It even unveiled a US$2.5bn share buyback programme! Its competitor, Shell, also saw a tripling in profits. With oil prices back up to the $110 per barrel mark, FTSE oil investors are likely rejoicing about a 10% gain this week. There are still calls for a windfall tax, though, so that’s something to keep an eye on.

Up to 8% off!

After news that non-food inflation jumped 2.2% in the last month, retailers have seen their share prices go on sale. Big FTSE names Kingfisher, JD, and Dunelm are now trading at up to 8% discounts from a week ago.

Fed up with inflation

The US Federal Reserve increased the Fed Funds rate by 0.5%, instead of the much feared 0.75%. This sent the US markets on a euphoric 3% rally. The Fed will also begin reducing asset holdings on its balance sheet on 1 June. The high then simmered overnight as US markets plunged the next day, also negatively affecting the FTSE. This is because the majority of FTSE 100 companies earn income in US dollars. So an unfavourable exchange rate doesn’t bode well for profit margins. The pound is now at a two-year low against the US dollar.

Low house stock losing market

The Bank of England followed swiftly with a 0.25% increase to its own interest rate. This brings the UK’s bank rate to 1%. But what sent the British stock market crashing afterward was the Bank’s inflation expectations. Governor Andrew Bailey expects inflation to peak at 10% later this year, with a potential contraction of the British economy in the fourth quarter, as household incomes continue to decline.

The share prices of Lloyds and NatWest fell given rising fears of a housing crash, amid a lack of supply already in the market. After all, both Halifax and Nationwide housing data reported a decline in house price growth. This is also why I don’t think UK banks are a good place to house my money right now.

The post What happened in the stock market this week? appeared first on The Twelfth Magpie.

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• Forget meal deals! Here’s how £8 a day could be worth £357,000
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• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

John Choong has no position in any of the shares mentioned at the time of writing. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Thanks to my Foolish mentality — and the fact that my problems are tiny compared to those of people in Ukraine — I’ve generally succeeded in taking this not-insignificant wobble in my stride. 

Here’s what I’ve been doing

First, I haven’t sold a single thing. Yes, there’s certainly no guarantee that markets won’t dip lower in the months ahead. Then again, I have no way of knowing whether this will be the case in advance. Getting out now may help stop the bleeding but it will also leave a (costly) financial bloodstain. In other words, it merely turns what is only a potential loss into a real loss.

Second, I’ve taken a quick look at whether anything has truly changed with regard to stocks I own. Without exception, this is thankfully not the case.

Sure, there are some significant headwinds. For example, one of my favourite businesses — Greggs — has fallen heavily on news it might need to raise prices for the second time this year due to rising costs. That’s unfortunate, but I highly doubt the sausage roll seller now faces an exodus of customers compared to businesses devoted to selling big-ticket items. And will Greggs still face this challenge in a few years? I suspect not. 

This brings me to a third thing I’ve been doing, namely adding to my watchlist of stocks I’d be tempted to buy at current levels. Right now, Games Workshop, SDI and XP Power are all in my sights. Whether I end up pulling the trigger is dependent on having available funds to do so, of course. Regardless, I always keep this list running in good times and bad. This should mean that my rationale for investing is solid and I’m not making any impulsive purchases.

Walking away

My last action is both simple and highly effective. Not checking my portfolio at all. 

To be clear, this is not the same as sticking my head in the sand. I know full well that a good chunk of my paper profit has gone up in smoke in recent weeks. But if I know I can’t change the situation, the next best option is to learn to accept it and do something far more productive. This could include finding ways of raising extra cash which can then be deposited in my Stocks and Shares ISA.

That last point is particularly important at this time of the year. After all, the ISA window closes early next month. Whatever of my £20,000 allowance I don’t throw at this tax-efficient savings account will be lost forever. That really matters over the long term, given the wonder that is compound interest. 

Long-term focus

It goes without saying that there are far more important things going on in the world right now than volatile share prices. Even so, I remain convinced that ‘this too shall pass’ just as all stock market crises have.

For someone not planning on touching his Stocks and Shares ISA for a couple of decades, that simple mantra is good enough for me.

The post My Stocks and Shares ISA has tanked. So I’m doing this appeared first on The Twelfth Magpie.

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• Forget meal deals! Here’s how £8 a day could be worth £357,000
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• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Paul Summers owns shares in Greggs. The Motley Fool UK has recommended Games Workshop and XP Power. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Why invest via a Stocks and Shares ISA?

With such an ISA, by far the biggest incentive for me is that any profits I make are free from capital gains tax. Call me miserly but I’d rather hand as little as possible back if I’ve taken on the responsibility of growing my wealth. 

The tax benefits of an ISA don’t stop there. In addition to not paying any tax of profits, I’m also not required to pay anything back for dividends I receive, assuming the investment I hold pays them.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in the future. The content in this article is provided for information purposes only. It is not intended to be, nor does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Here’s what I’d buy

With £50 a month to invest, I’d start with buying an exchange-traded fund (or ETF).

An ETF simply tracks the return of the stock market. To give an example, the FTSE 100 index, which features the UK’s biggest companies, returned 14.3% in 2021. An ETF tracking the FTSE 100 would return almost exactly the same (once costs are factored in). 

Buying an ETF would make particular sense to me as a newbie investor because my money would be spread between lots of different companies. While this won’t stop the value of my investment from falling in tough times, there are none of the risks that come from buying shares in a single business. 

Clearly, I’m not obligated to buy a fund tracking the FTSE 100. There are actually a huge number of ETFs available following all sorts of markets and types of stock.

Nor must I stick to buying only these funds (although many people like to keep things simple and do). Once I became more confident in how the market works, I can expand my portfolio to include other assets.

Keep fees low

It’s worth saying a little more about fees. Since it’s essentially managed by a computer rather than a human (aka a passive fund), an ETF’s fees tend to be low. Over years, this really matters. It means more of my money is allowed to compound. 

I’d also take advantage of my broker’s ‘regular investing’ service. This invests my money on a set date each month rather than immediately. As a result, my commission fees (what it costs to buy or sell a fund or stock) are roughly 10% of what they normally would be. Again, these savings add up over time and allow more of what I put in to grow in value. 

Any downsides?

For me, there’s aren’t many downsides to opening a Stocks and Shares ISA. Still, let’s have a go at scraping the barrel. 

One fairly obvious cost is having less cash to spend today. There’s no way of getting around this other than to earn more and/or reduce my spend. Becoming an investor also requires patience. This is no ‘get rich quick’ scheme.

The good news is that investing for the long term quickly becomes a habit. In fact, knowing that money I put away now might/should become a great nest egg eventually makes the process rather addictive.

And of course, we’re talking about £50 here. I could potentially accumulate a lot more wealth by increasing the amount I set aside every month. 

The post How I’d start investing in a Stock and Shares ISA with £50 a month appeared first on The Twelfth Magpie.

More reading

• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. 

Instead of hiding behind the sofa, I’ve been looking for great UK shares to snap up. Here are three I’d be keen to buy if things get really scary. 

CVS Group

Many investors (including myself) are drawn to invest in glitzy themes such as electric cars and robotics. That said, I think there’s one fantastic part of the market that’s easy to overlook, namely pet care. This is why I’m following the movements of CVS Group (LSE: CVSG) very closely. 

CVS provides veterinary services and, based on Thursday’s trading update, is doing very well indeed. Trading over the second half of 2021 was “comfortably in line with full-year expectations” with revenue climbing 11.4% on the previous year.

The mid-cap was also bullish on its outlook, saying that demand remains buoyant due to “increased ownership” and “the humanisation of pets“. 

The shares have fallen almost 11% in 2022, at the time of writing, but still change hands for almost 24 times earnings. That’s a little more than I’d like to pay, hence why I’m keeping my powder dry for now. If the sell-off continues however, I’ll be buying the stock quicker than a cockapoo chases a squirrel.

Bytes Technology

Another UK growth stock I’d have no issue in taking a nibble at eventually is Bytes Technology (LSE: BYIT).

Last year proved to be a hugely successful one for the software, security, and cloud services specialist. Back in October, it revealed increases of 13.7% and 19% in revenue and operating profit respectively in the six months to the end of August. 

As more corporate clients recognise the importance of updating their IT systems, I don’t think this kind of momentum is in danger of reversing soon.   

Stock in Bytes has declined 21% in value so far this year. Like CVS Group however, they still aren’t cheap enough to get me buying just yet (31 times earnings).

Then again, this is not the sort of business that will likely trade on a ‘cheap’ valuation. Returns on capital employed — what a company gets back for the money it puts in — are some of the highest I’ve been able to find.

I think shares will only fall so far before they rebound strongly.

Treatt

A final growth stock that takes my fancy is ingredients supplier Treatt (LSE: TET). This is another company enjoying robust trading. On Friday, it reported making “a good start” to its new financial year.

Notwithstanding this, it did caution investors that pre-tax profit would likely revert to being more weighted to the second half. This is due to the seasonality of drinks consumption in the Northern Hemisphere. 

Since any business needs to keep moving and raising its game, I’m encouraged by Treatt’s ongoing R&D spend. New headquarters are also expected to give the company “substantial extra capacity” to continue growing in the years ahead. As a Foolish investor, that’s the sort of long-term focus I’m drawn to.

Unfortunately, the valuation — an eye-watering 38 times earnings — is still too rich for me.  So while Treatt’s shares are already down 14% this year, I’d prefer to snap up this growth stock when/if markets really start to panic.

The post Stock market crash: 3 UK growth shares I’d buy hand over fist if the selling continues appeared first on The Twelfth Magpie.

More reading

• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Treatt. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

At the grand old age of 91, it’s fair to say that Warren Buffett has seen a market crash or two in his long life. Despite this, he’s still managed to become one of the richest people in the world, thanks to his level-headed approach (and awesome stock-picking skills). I think that makes him worth listening to at times like this.

Here are three bits of Buffett brilliance for troubled times. 

Buy the best

“Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”

As a general rule, most people like it when they can acquire something really nice for a lower price than expected to pay. That’s why Black Friday and Amazon Prime Day are so popular. In the topsy-turvy world of investing however, many people find it hard to buy when prices fall. To really benefit from a stock market crash, therefore I need to challenge this aversion.

Of course, this does not mean I buy any old thing because it’s now trading at a low(er) price. No, the point here is to look for UK stocks (and possibly a few from abroad) that have all the hallmarks of quality businesses. For Buffett, these are companies that have ‘economic moats’, competitive advantages that mean they can continue growing revenue and profits for many years.

Get stuck in

“A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.”

If the previous quote from Buffett highlights what sort of stock I should be hunting down, this second bit of wisdom is all about how much of it I should be buying. Put simply, Buffett believes we should be snapping up as much as we can. Of course, this advice is reversed when markets are soaring. In such a scenario, the ‘Sage of Omaha’ thinks we need to be prepared to buy less or sit things out completely. 

Now, going against the crowd is never easy, especially when share prices continue to tumble. So one way I try to get around this is to be greedy in tranches. In other words, I make multiple purchases of great UK stocks rather than attempting to buy at the absolute bottom to maximise my gains.

Psychologically, this makes things much more bearable. It also ensures I don’t suffer from ‘analysis paralysis’ and miss a great opportunity.

Take your time

“The stock market is a device for transferring money from the impatient to the patient.”

As a long-term Foolish investor, these final words from Buffett are about as soothing as I can find. Knowing I plan to stay invested for decades helps take the sting out of nasty market moves like this one.

Adopting this mentality also gives me an edge on professional investors. Unlike them, I’m not required to explain my decision-making or outperform a specific benchmark every quarter to keep my job. Put another way, their chosen careers require these undeniably talented people to do everything that Buffett advises against. They are forced to become impatient.

It’s this commitment to focusing on the long-term outcome that makes a crash or correction easier for me to bear. It’s also what I believe will see me eventually accumulate a non-insignificant amount of wealth.

The post Stock market crash: I’m listening to Warren Buffett and buying UK stocks appeared first on The Twelfth Magpie.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Amazon. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Passive income…on the cheap

Online trading platform CMC Markets (LSE: CMCX) is a great example of just how fickle investor sentiment can be. Prior to the Covid-19 outbreak, its stock traded for pennies rather than pounds.

Following the huge increase in online trading over multiple UK lockdowns however, the very same shares were changing hands for as much as 559p a pop by April this year. Fast forward to today and the price has more than halved from this peak, as investors have rushed to bank gains following more “subdued” market activity over the summer.

Despite this rocky ride, I think CMCX could be a great choice for passive income-seeking investors. Right now, analysts are predicting the company will return 10.6p per share to owners in the current financial year (ending 31 March). Using today’s price, that’s a 4% yield. This should also be covered well over twice by expected profit, making the payout secure (at least for now).

CMC’s stock also looks inexpensive to pick up, with the company trading at just 11 times forecast earnings. Why is this company so cheap if it’s such good quality you may ask? I suspect a lot of it is due to CMC operating in an industry that’s susceptible to regular meddling from regulators. Larger peers trade on similarly low valuations. With its purple patch likely over, traders will also be looking for other opportunities to grow their capital at a faster clip.

Not that this would bother me if generating income were my primary goal. With its solid finances, I’d be happy to add CMCX to my passive portfolio today.

Chunky 5.4% yield

A second passive income candidate that’s looking cheap to me is fund manager Polar Capital Holdings (LSE: POLR). Its shares can currently be snapped up for less than 13 times expected earnings, and yield a chunky 5.4%. That’s despite the stock rising a little over 40% in value over the last 12 months as profits at the mid-cap company have surged.

Again, there’s are a few things worth bearing in mind. In contrast to the possibility that CMC will likely see more trading from clients as market volatility increases (as it has in September), POLR might see the complete opposite as investors reduce their equity exposure. This means the Polar Capital share price could get cheaper in the months ahead. It could also mean that dividends may not rise as quickly as they have in recent years.

As a Foolish investor, all this is nothing new. I know it’s near impossible to consistently predict the market’s next move. Rather than worry, it’s best to assume that no dividend stream is ever safe and diversify accordingly. That means spreading my money around a reasonable number of stocks from various sectors.

That said, I sincerely doubt POLR will stop paying out income soon, even if dividends aren’t covered quite as well by profit. Like CMCX, it also looks to be in robust financial shape with a substantial net cash position.

The post 2 dirt-cheap passive income stocks to buy in October appeared first on The Twelfth Magpie.

More reading

• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• FTSE 250 stock CMC’s shares have rocketed 51%! What’s going on?
• CMC Markets: a FTSE dividend star worth considering for an ISA or SIPP?
• £1,000 buys 268 shares in this dirt-cheap dividend stock that’s on fire in 2026

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Polar Capital Holdings. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.