Don’t waste the stock market correction! I’d invest £5k in FTSE 100 shares today

FTSE 100 Shares have been on quite a roll recently. After the ongoing stock market correction, which started at the end of 2021, the index fell to its lowest point in October. Since then, the UK’s big stocks seem to have bounced back, rising more than 12%, outperforming other indices around the world, such as S&P 500to be ashamed.

And things may begin.

FTSE 100 shares in a time of crisis

Looking back at history, the FTSE 100 has experienced several bear markets. These include the worst disasters like Black Monday in 1987, the dotcom tech bubble that burst in 2000, the 2008 financial crisis and, most recently, the 2020 Covid crash.

However, in each case, the index has bounced back. In fact, it has historically recovered before posting record highs. And for those patient investors who see the opportunity, the returns yield incredible wealth.

With that said, are FTSE 100 stocks guaranteed to repeat this pattern in 2023? Not. But given the 100% success rate since this index was established in 1984, I think it’s fair to say it’s highly likely. And with the recovery phase seemingly over, the next logical step in the cycle is for the index to rise to new records.

So, time may be running out for investors to take advantage of this rare buying opportunity. And for those who have £5k, or any amount, to invest, it may be a profitable move to load up on those big stocks, either individually or by buying an index fund.

Nothing is risk free

The potential benefits of buying FTSE 100 shares today could be huge. However, they do not mean certainty. The UK faces significant economic challenges, mainly due to inflation.

The Consumer Price Index finally started to fall again in November. But it remains up at 10.7%. However, the latest report from the UK Retail Consortium shows that food prices rose by 13.3% in December. The rising price trend puts additional pressure on consumers, who are already burdened by rising energy bills.

All of this means a recession may be on the horizon. And although large stocks typically have greater resilience to headwinds, this may not be enough depending on the severity of a potential recession. In other words, the FTSE 100 could be set to drop again.

Bottom line

Investing in today’s market comes with a lot of uncertainty. That is why many investors are busy selling. But to quote the 19th century banker Nathan Rothschild, the best time to buy is “When there’s blood in the street”.

Some very good stocks in the FTSE 100 are trading below their intrinsic value today. And while stock price volatility is always ahead, the impact can be mitigated by using strategies such as pound cost averaging.

That is why I believe that not investing in this stock market correction is, in fact, a greater risk.