Is March a can’t-miss opportunity to get rich with UK shares?

Volatility in UK stocks appears to be creeping back into the stock market. After sending a public meeting blocking since October, the FTSE 100 seems to be nose diving.

After the implosion of three US banks last week, UK banking stocks appear to be the target of panic. and Barclays, Lloyds, Natwest and the rest have all fallen like stones in the last five days.

Investors are understandably concerned about contagion. But now there is no evidence of this. The failure of three relatively small American banks all stemmed from idiosyncratic reasons.

In other words, rising interest rates may be the trigger, but not the cause. This is due to the lack of risk management allowed due to lower regulatory oversight compared to the largest financial institutions in the US, UK, and Europe.

In other words, investors’ fears may be unjustified. And capitalizing on this new volatility can pave the way for superior returns over the long term.

Fear of taking no prisoners

Banking stocks appear to be the main target of the recent sell-off. But panic doesn’t discriminate. And many FTSE 100 businesses in other industries have been caught in the crossfire.

Does this mean investors should blindly buy UK stocks that have fallen from grace? Of course not. Emotions may drive investment decisions this week, but every business still needs to be evaluated before making an investment.

After all, the last thing investors want to own is a flawed company that will continue its downward momentum.

Find the best UK stocks

With interest rates rising, the importance of positive free cash flow comes into play. With debt becoming more expensive and equity in the toilet, financially independent companies have a greater chance of success.

Additionally, businesses that generate excess cash may have greater flexibility than their competitors. And, historically, that has resulted in gaining more market share, or eliminating competition through acquisition.

Another factor to consider is the existing debt situation. A balance sheet with a lot of loan obligations is often considered a bad trait. But not always. Don’t forget debt is a powerful tool when used properly.

British shares with billions of pounds of debt could be healthy if the underlying business generates enough cash flow to service them. But with interest rates on the rise, it’s important to research whether the loan is fixed or variable. Margins may face some pressure in the coming months if the latter.

Time to buy?

Famous investor Nathan Rothschild once said: “The time to buy is when there’s blood in the street”. That is certainly an accurate description of the current state of the stock market. And buying UK shares today can be a profitable decision in the long run.

However, irrational decisions made by people who are afraid create risks. It is impossible to say whether the market will continue to decline in the coming weeks or months, or continue its recovery. That’s why using the pound cost averaging strategy may be the best approach to capitalize on cheap stocks today.