Surprise! Mr Market is spooked and has put the FTSE 100 on sale

Mr. Pasar is very strange. Just last month he offered me a collection of the 100 biggest UK stocks at a high price.

Now, just 20 odd days later, they are offering me the same FTSE 100 for 8% less.

I have more time than Mr. Market, so I want to accept his offer. Here is the reason.

Why is he afraid?

First of all, before I see what this character has to offer me, why is he so surprised?

Of course, he had reason to worry. When the President of the USA himself has to tell the citizens that the bank deposits are safe, then we can assume that the financial market is in a period of instability.

The knock-on effects of Silicon Valley Bank’s collapse late last week are still emerging. But already two cryptocurrency banks, Silvergate Capital and Signature Bank, have been closed. and Credit Switzerland Shares today plunged to new lows.

All of this has many investors worried that another widespread banking sector crisis could occur. That is clearly worrying and explains the recent decline in UK-listed bank shares.

	5-day stock price performance	1-year stock price performance	5-year stock price performance
Barclays	-16.2%	-19.5%	-32.6%
HSBC Holdings	-12.4%	+10.8%	-22.5%
NatWest Group	-9.8%	+3.2%	-20.5%
Lloyds	-9.5%	-3.1%	-30.1%

I should note that this stock price figure does not include dividends, and therefore does not represent the total return received from the stock. But they show the extraordinary volatility seen in recent times.

Beyond index tracking funds, my portfolio has no exposure to banks. Of course, this did not stop them from taking hits in a few days.

But because the sell-off is widely indiscriminate, I only see it as a buying opportunity.

What I did

This volatility has come at the right time for me because I have some cash to invest. So what should I buy?

Yes, I really like Peter Lynch’s idea that “The best stocks to buy are the ones you already own.”

The point of this is that there is a reason I bought the stock in the first place. So, unless the company’s fundamentals are broken, why not double down on the stock?

This brings me to Ashtead. The construction equipment rental company recently raised its full-year revenue guidance. Profit before tax has gone up and the dividend increased. But the stock is down 13.5% in less than a week now.

Other FTSE 100 stocks I own that have fallen in the last five days include insurance companies Legal & General (-11%) and mining giants Glencore (-13.5%).

I can add to all these stocks, despite the risk that they also have more to fall.

Long term thinking

At a time like this, I’m glad I’m just a regular buy-and-hold investor.

Unlike some fund managers, I don’t have to time the market and get out before it crashes. I don’t have to obsess about hitting quarterly performance targets or worry about the stock price falling again.

I can only wait for weeks like this and seize buying opportunities as they arise.