I have been reading that stocks have been going down massively in the past 48 hours, and I was wondering how one would invest some saved up money? If I buy a stock that is now 16$ but was 26$ a few days ago, will it go back to that price and i can make a small profit ?
I'm not talking about putting a huge amount of money, just a few thousands Euros i can spare.
Most people think probably, since the stock markets have always recovered after previous crises. But it might potentially take weeks, months, or years (if the impact of the pandemic and other troubles causes an ongoing weakness in the economy). There's also a risk that particular companies or industries will be so severely affected that they never fully recover; for example, individual companies could go bankrupt or could be acquired at a lower valuation than their peak value.
Here in California, which currently has a less disruptive COVID-19 outbreak (and less disruptive responses to it) than much of Europe, there have already been reports of some small businesses failing. Someone who invested in those businesses on the assumption they would later recover could have lost the whole investment. Larger businesses can fail, too, though usually on a longer time scale. For example, it's possible that some travel-related companies that are especially impacted by reduced travel will have to sell off their assets and operations to other companies, maybe at a comparatively low value.
The point of this is that, in general, stock markets as a whole, and economic sectors as a whole, have always recovered from crises and disasters -- potentially providing profit on some timescale to people who invested during a crash -- but that this may sometimes take a very long time¹ and is definitely not guaranteed for any individual company. Therefore there is never an opportunity to invest in stocks with absolutely no risk, although a financial advisor may be able to help you estimate and manage your risk.
Even if a particular community is convinced that a certain stock or the market as a whole will probably move in a certain direction, it's never a guarantee. Your gamble may have a positive expected value, but that doesn't disqualify it from being a gamble.
¹ If you get really unlucky, there could be other economic disruptions that interrupt the recovery (other disease outbreaks, natural disasters, political instability, wars, effects of climate change?) and so the economy may not recover on the timescale that you expected it would.
No one has any idea, here or anywhere. However, what you’re describing isn’t investing, it’s a lotto. Read some posts about why you aren’t going to be able to time the market (which is what you’re asking about doing): https://www.google.com/search?q=stop+trying+to+time+the+mark...
In theory this might be true. But with the current corporate debt bubble not all will survive this recession.
The combination of the current global economy and this sudden crash brought about by a global pandemic is unprecedented. We are in uncharted territory. It all depends on how much faith you have in world leaders - this virus is shaking up geopolitics and markets may not bounce back from this for years, though that's quite a pessimistic take.
Personally I feel like a lot of the world has been propped up on a house of cards and this virus is about to expose a lot of it, which means hard times are coming.
So tl;dr if you have faith in world leaders, wait another week or two because the market is probably going to crash even harder when the fed pumps $1.5T into the market (we've shut down trade with Europe and China is still not back online so this can only lead to a dead cat bounce) and then if you have disposable income buy up some bargain stocks. But the most important advice I'd give you is to only spend what you are prepared to lose. Your general impression is correct - if a stock is significantly lower now than it was two months ago, it's technically a bargain if you buy and hold until this is over.
Now, that said, if we miraculously find a cure or vaccine in the next month or so, I imagine markets will skyrocket overnight. And given that this is probably the most attention a disease has ever been given in history, it's not impossible.