3 tips for handling the current FTSE 100 and S&P 500 wobble

After a powerful move higher, major stock markets indexes such as the FTSE 100 and the S&P 500 are experiencing a bit of a wobble. In the last few weeks, both of them have fallen about 4%.

Stressed about the current volatility in the markets? Here are three tips to get through it.

Donât look at your portfolio so much

At times like this, I tend to look at my portfolio a lot less (Iâve hardly checked my portfolio balances at all in recent weeks). I find this takes away a lot of investing stress.

Having done the research, Iâm comfortable with my holdings. I know that Iâm invested in some brilliant companies (eg Amazon, Uber, and Nasdaq), which, taking a five-year view, are likely to do well for me overall.

Reframe the situation

No one likes to see the value of their portfolio go down. But hereâs the thing â a bit of market weakness can actually be good thing.

The reason why is that market pullbacks let some of the excess/speculation out. This can help set the market up for its next move higher.

If markets keep going up and up without any pullbacks, they tend to experience a sharp fall at some stage. So, a bit of weakness now could be a positive.

Think about the buying opportunities

Iâm actually quite excited about the current market weakness. Iâm hoping it continues for a bit longer.

Why? Because a decent pullback can create lucrative buying opportunities.

Most of my best investments have been made during periods of market weakness. Iâve followed Warren Buffettâs advice that the time to be greedy is when others are fearful and it has paid off.

Iâll point out that in recent months, Iâve taken some profits off the table to build up a cash pile. So, Iâm cashed up and ready to pounce when I see something I like.

A stock Iâm looking at right now

One stock Iâve got my eye on is Vertiv (NYSE: VRT). It specialises in cooling systems, power distribution, and advanced server rack technology for data centres and itâs having a huge amount of success at present on the back of the global data centre boom.

Looking ahead, I see a ton of potential here. By 2030, there are expected to be around 8,400 data centres in operation globally against about 6,000 today (an increase of approximately 40%). This expansion should lead to strong growth for Vertiv. Because it offers best-in-class solutions that every single data centre needs (they get extremely hot so cooling systems are essential).

Note that last year, revenue jumped 17%. This year, itâs expected to increase 28% so that’s a big acceleration.

Now, this stock has fallen from $200 to $165 recently. And itâs starting to look decent value as the forward-looking price-to-earnings (P/E) ratio has come down to near 30.

Iâd like to buy it a little bit cheaper just to improve the risk/reward skew (a meltdown in AI stocks is a key risk here). Iâm hoping I get the chance to buy it for less than $150 in the weeks ahead.

The post 3 tips for handling the current FTSE 100 and S&P 500 wobble appeared first on The Motley Fool UK.

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Edward Sheldon has positions in Amazon, Nasdaq, and Uber. The Motley Fool UK has recommended Amazon, Nasdaq, and Uber Technologies. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.