Will the stock market crash soon? The economic and financial storm clouds have been gathering for a while.
The post-Summer holiday period when traders get back to their desks can mean high activity levels in the City. More than one past crash has begun in the autumn.
In reality though, nobody ever knows for sure when the next stock market crash will arrive.
In some ways, the market looks highly valued and fragile right now. Seen from the other perspective, though, the global economy has been surprisingly resilient amid multiple geopolitical shocks. That resilience could yet drive the market higher.
Still, while I have no more knowledge than the next man when it comes to timing a stock market crash (in other words, zero) I have spent some time trying to make sure I am ready for it, whenever it comes.
Spring cleaning my portfolio… in autumn
For starters, I have been selling some shares to bank a profit on them.
I have not only been selling but also buying. I continue to think there are some possible bargains in today’s market.
That said, I have been a bigger seller than buyer in recent weeks.
Regardless of what is going on in the wider stock market, I think it is prudent for an investor to look at their portfolio from time to time and decide whether any shares have outlived their role.
Sometimes that is about converting a paper profit into an actual one. On other occasions, less pleasingly, it can be about accepting that the investment thesis for a particular shareholding has changed and selling it at a loss.
Looking for opportunities today, but in future too
While there are opportunities in the stock market right now, I am not just thinking about them.
I am looking ahead to the prospect that the next stock market crash could potentially make some brilliant shares more affordable than they are now.
Such opportunities do not come around very often. When they do they can be short-lived, as there are plenty of other blue-chip bargain hunters in the market.
So it can pay to be prepared.
To that end, I have been updating the list of shares I would like to own if I could buy them at an attractive enough price.
For example, food producer Cranswick (LSW: CWK) has a strong long-term record of shareholder value creation.
The Cranswick share price is up by a third over the past five years. The firm has grown its dividend per share annually for 36 years in a row.
Past performance is not necessarily a guide to what to expect in future though.
Inflation in the supply chain could eat into Cranswick’s profit margins. I also see ongoing reputational risk from reports of poor conditions at several of its piggeries in recent years, though the company says it has taken steps to improve animal welfare.
