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2026 has began eventfully. Nonetheless, although, the inventory market powers on. The FTSE 100 has already damaged by the ten,000 mark for the primary time ever this 12 months. However with an unsure financial and geopolitical outlook, does that make sense? Or might we be heading in direction of a inventory market crash?
Concern and alternative
The reply to that query will imply various things to completely different folks.
For some buyers, a inventory market crash is one thing to be feared. Whereas a pointy decline in share costs could solely be a paper loss (until these shares are offered), the psychological affect of seeing such a loss can nonetheless be sizeable.
Nevertheless, over the long term, I are inclined to imagine that high quality will out.
A inventory market crash could ship the value of a share tumbling briefly order.
That doesn’t essentially change its underlying worth. Additionally, it may possibly probably provide me a chance to select up a stake in high-quality firms at a discount value.
Market timing: tempting, however by no means infallible
Will that occur quickly?
There are causes that it might.
Mounting geopolitical danger and weak financial progress prospects make it laborious to know ongoing progress in lots of share costs. The AI inventory increase appears quite a bit like a bubble from one perspective.
However final 12 months demonstrated that the market can do effectively within the quick time period even in a risky financial system. Many good buyers see AI not as a bubble, however as a transformative expertise that might but push the markets greater nonetheless.
Nevertheless, whereas it may be tempting to try to time the markets, no one can ever do it with certainty.
Ultimately, the inventory market will crash. However no one is aware of for certain whether or not that’s simply across the nook or nonetheless a great distance down the highway.
What I’m doing now
Sitting out of the marketplace for extended interval can have a chance price for buyers.
So I’m nonetheless energetic and certainly have been shopping for some shares up to now in 2026.
However I’m additionally updating my watch listing of what I believe are high-quality shares I want to purchase if a inventory market crash let me achieve this at a pretty value.
Such home windows of alternative will be short-lived, so it is very important be ready.
I’m ready to purchase…
One share on my watch listing is FTSE 100 engineer Spirax Group (LSE: SPX).
Spirax has constructed a permanent enterprise by growing specialist experience in important industrial processes like steam. Meaning its purchasers are prepared to make use of its providers even when the financial system is weak, because the agency’s engineering know-how helps its purchasers hold their factories and premises working.
By growing bespoke options in lots of instances, Spirax has been in a position to deepen its consumer relationships, whereas making itself first alternative for future expenditure.
Ongoing challenges with the tempo of post-pandemic demand restoration in its Chinese language enterprise stays a danger for the enterprise.
Nevertheless it has grown its dividend yearly for many years. On the proper value, I’d gladly personal this share. I see it as a high-quality British blue chip with a confirmed enterprise mannequin and ongoing progress potential.
At the moment promoting for 32 instances earnings, nevertheless, it appears expensive to me. For now, it’s on my watch listing.
