Due to macroeconomic and geopolitical factors, many believe a forthcoming stock market crash is inevitable. Here’s how I’m preparing for any crash if it were to occur to boost my holdings.

How I’m preparing

When the stock market crash in 2020 occurred, I wish I had prepared better. Many of the stocks on my radar dropped in price substantially and now many have risen to surpass pre-crash levels. I have attempted to put together a method for any impending crash. 

I have considered and picked some key industries I would like to capitalise on and add shares to my portfolio. One of those has to be tech stocks. This is because tech is now at the forefront of daily lives, personally and in work. Most manual, in-person personal and work tasks, have now been automated. So I would look for tech stocks that will continue to perform well despite a stock market crash. The shares should cheapen in the event of a crash, allowing me to pick up some bargains. An example of a stock on my list is Rightmove.

I am also looking at growth sectors. These are stocks that reside in a market that is experiencing an upturn in fortunes and should continue to grow in the coming years ahead. A prime example of this is electric vehicle (EV) stocks. A focus on the environment and harmful effects of petrol and diesel vehicles has led to many car manufacturers creating EVs. A ban from 2030 of the production of new petrol and diesel vehicles will benefit the EV market. An example of an EV company on my list in the event of a stock market crash is TI Fluid Systems.

I must also look at a stock’s fundamentals. By this I mean the firm’s performance record, any dividend payment record that could eventually make me a passive income, as well as market share and its balance sheet too. For example, a firm with lots of debt would put me off.

What could cause a stock market crash?

From a macroeconomic perspective, soaring inflation is a global economic concern currently. The rise in consumer prices is worrying in many world economies. An example of this is the US. The Consumer Price Index (CPI) rose by 7% in December. This was the highest rise since 1982. In 1982, soaring inflation led to a stock market crash.

When certain world-leading economies are struggling, and crash, other economies also crash. The Chinese economy is in the midst of a real estate crisis and its gross domestic product (GDP) — a good indicator of growth — has been recorded at just 4% in Q4. This is the slowest pace in 18 months.

A geopolitical issue to keep a keen eye on is the Russia-Ukraine crisis. Tensions in the region between the two nations have increased. Many other world superpowers have got involved to mediate a solution to avoid a war. Tens of thousands of Russian troops on Ukraine’s borders in recent weeks have stoked fears of an invasion. History has taught me major wars can also trigger a stock market crash.

Nobody can accurately predict if a stock market crash will occur or not. I am preparing for one, though, and have a list of stocks for my holdings that I would buy for a cheaper price and expect to see a lucrative return over time.

Jabran Khan has no position in any shares mentioned. The Motley Fool UK has recommended Rightmove. 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.

The US economy continues to show strong growth. Numbers for 2021 released earlier this week showed that it grew at a strong 5.7% rate, with 6.9% annual growth in the final quarter of the year alone. It did have the advantage of a low base effect — the economy had shrunk in 2020 when the pandemic was at its height. But there is more reason to believe that the US is indeed in fine form. The International Monetary Fund’s latest forecasts for 2022 put its growth at 4%, which is among the strongest growth rates for advanced economies. 

Ashtead could rise further…

I think this bodes well for UK stocks that count the US among their biggest markets. Two of them are the FTSE 100 companies Ashtead and CRH. Ashtead, which provides industrial equipment on rent, gets some 80% of its revenues from the US. Crucially, the company is focused on the construction industry. Being cyclical, the industry could get a boost as growth stays strong. US President Biden’s Build Back Better bill is still hanging in the balance, but if it goes through, the stock could get an even bigger boost. 

The only catch to the stock is how steeply it has run up since the pandemic. It was a robust stock even earlier, but its rise has been particularly sharp in the past couple of years. This is despite some correction in recent months. Going by its positive earnings forecasts though, I think it could rise further. I think it is a good time to buy it for my portfolio. 

This FTSE 100 UK stock could too

CRH has a similar story to Ashtead. More than half the construction biggie’s revenues stem from the US market. I bought it a few months ago, and until a few days ago, things were going in the right direction. But it has dipped in the past couple of weeks, which might be a red flag. It also makes me wonder though if this is the right time to add to my holdings of the stock. I do like its price-to-earnings  ratio of 25 times. It is higher than the FTSE 100 average of 18 times, but then its prospects look better to me than that of the average stock too, so going by that it is still fairly reasonable. Especially now, after looking at the US economy’s latest numbers. It also expects profits to increase, which gives me even more hope. 

…as could Cineworld shares

Another US-focused UK stock I like, and one that is quite controversial right now, is Cineworld. The company was UK market driven, before its ill-fated acquisition of Regal Cinemas. Now, however, the US is its biggest market, and a booming economy is great news for consumer discretionary businesses like cinemas. There is no denying that the FTSE 250 penny stock has a mountain of debt to pay off. I believe that further moderation in the pandemic, the release of blockbuster movies, and consumers’ ability to spend in a high growth environment will hold it in good stead. I have long been bullish on the stock, and now I am even more so. 

Manika Premsingh owns CRH and Cineworld Group. The Motley Fool UK has no position in any of the shares mentioned. 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.

Inflation has dominated my news feed over the past week. From the time that I wake up and look at pre-market reports to the time I am ready to switch off for the day, I read about rising cost pressures. The FTSE 100 index has been admirably resilient so far, though. Just yesterday, it closed above 7,500 once again. But I am bracing for more stock market volatility in February as macroeconomic risks grow. 

Inflation’s impact gets pronounced

In recent articles, I talk about two FTSE stocks that mention inflation in their updates. Unsurprisingly, both of them are consumer-oriented companies. The first is the FTSE 100 alcohol manufacturer Diageo and the other is the AIM-listed mixer drinks producer Fever-Tree Drinks. Fever-Tree actually thinks that these increases could keep its margins unchanged. This likely sent its share price plunging after the update. Diageo has done much better, and is also optimistic about the future despite its expectation of short-term volatility. 

But the key point I am making here is this. Inflation’s impact on companies is evident. It does not help that the inflation print is expected to stay elevated in the near future as well. In fact, the Office of Budget Responsibility predicts that the UK’s inflation will average an annual rate of 4% for 2022.

This is way above the Bank of England’s comfort level of 2%. So clearly, increasing interest rates are likely through the year. As per the US Federal Reserve, rate hikes will begin soon, possibly in March. With the authorities now likely to turn the liquidity taps off, it goes without saying that stock markets could be impacted. 

Impact on stock markets 

Stock markets thrive during conditions of easy liquidity, because like with any other commodity, there is greater demand for cheap money. And at least some of it finds its way into investments. Moreover, companies’ borrowings costs are also lower when interest rates are muted. When they rise, however, companies’ borrowings could slow down and existing borrowings become dearer. Coming out of the pandemic, when many companies have had to borrow more than usual, this could be particularly bad news for the recovery. 

I expect more companies to talk about rising inflation in their updates in February. This could lead to a wobble in the broader stock market as well. The question now is, how should I invest? While the latest inflation numbers are admittedly quite atypical, the biggest FTSE 100 companies have seen far worse, like wars, depressions, and all other kinds of crises. I am focused on high-quality companies with resilient demand and positive outlooks as potential buys for my portfolio now. It might even be a good time to buy them as the markets dip.

Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Diageo and Fevertree Drinks. 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.

With the cost of living rising rapidly, I have been looking for inflation-busting dividend shares to add to my portfolio. I think all of the companies listed below, which offer dividend yields of 7% or more, can help protect me against the ravages of rising prices. 

Unfortunately, this dividend income is not guaranteed. There will always be a risk that rising prices could impact company profit margins, which could ultimately lead to dividend cuts. Despite this headwind, I reckon these businesses have the potential to provide attractive returns for my portfolio. 

Inflation-busting

The first firm on my list is the mining giant Rio Tinto (LSE: RIO). With a prospective dividend yield of more than 8% for the year ahead, I think the company looks incredibly attractive as an income investment. 

What’s more, commodity prices tend to rise in line with inflation (although this is not guaranteed as commodity prices can be incredibly volatile).

As a result, I think the corporation’s profits should remain relatively robust, even in an inflationary environment. It might have to deal with some increasing costs, but rising sales may help reduce the overall impact. 

On top of these factors, the company also has a cash-rich balance sheet with no debt. These qualities are highly desirable in any income investment. 

High-quality dividend shares

Elsewhere, I would also buy FTSE 100 dividend giants British American Tobacco (LSE: BATS) and Phoenix Group (LSE: PHNX). Both of these companies currently support dividend yields of more than 7%, and they have plenty of other attractive qualities as well. 

Phoenix manages books of pension and life insurance policies, which are very predictable long-term assets. The group has also been acquiring other businesses to increase assets under management and reduce costs. I think these advantages should help it navigate the current uncertain economic environment.

A major risk the corporation could have to deal with is volatility in its investment portfolio. Phoenix’s management should have baked this risk into their projections, but it is something I will have to be aware of as well. 

British American has a long track record of increasing the prices of its tobacco products in line with inflation. Of course, there is no guarantee that the company will maintain this track record. If prices rise too far, too fast, consumers may start avoiding the products. This is something I will be keeping an eye on as we advance. 

Nevertheless, I think the group also has the scope to cut costs. This could offset any inflation driven increase in wages or operating expenses. 

British American, Phoenix and Rio Tinto are not immune to the inflation pressures that are hitting the rest of the global economy. However, I believe these dividend shares are better prepared to ride out the current economic environment than many of their peers.

This is why I would acquire all three for my portfolio today. 

Rupert Hargreaves owns British American Tobacco. The Motley Fool UK has recommended British American Tobacco. 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.

The Deliveroo (LSE: ROO) share price has plunged a staggering 60% since the middle of August. Over the past year, or since the company’s IPO, the stock has slumped 50%. 

For someone who only recently turned positive on the outlook for the enterprise, this recent performance has been a bit of a shock. 

When the corporation initially hit the market, I was sceptical about its potential. I thought the business was benefiting from an artificially-inflated delivery bubble, driven by the pandemic lockdowns. I thought it seemed unlikely the company’s sales volumes would continue at pandemic levels. 

As it turns out, I was wrong. According to recent trading updates, not only have the company’s customers stayed with the business, but they have continued to order more. 

Fundamental performance 

According to the latest trading update from the business covering the fourth quarter of 2021, the overall gross transaction value on the platform increased 36% year-on-year. The overall gross transaction value increased 70% throughout 2021. 

This is a fantastic performance, especially considering the uplift the company received during 2020. The fact that the business has continued to grow, even as the world has opened up, suggests consumers love what it offers.

Even though they are usually charged a premium to order on Deliveroo, rather than picking the order up themselves or eating in, it seems users are willing to pay for the service. 

Unfortunately, the enterprise is struggling to turn this growth into profit. Despite two years of breakneck growth, the business is still haemorrhaging money. This is concerning. If Deliveroo cannot turn a profit in what has to be one of the most favourable environments the company will ever see, can it ever earn a profit? 

This seems to be one of the main reasons the Deliveroo share price has been falling. It appears to be a jam-tomorrow business. But tomorrow still seems a long way away. 

Competition seems to be another factor. The food delivery sector is incredible challenging, and keeping up with competitors is costly. This is probably the biggest factor the group faces right now. 

Deliveroo share price outlook 

So should I buy or avoid the company after its recent declines?

I still think the business has excellent growth prospects. I also believe there is potential for further consolidation in the food delivery sector. This could reduce competition and help firms like Deliveroo increase their profit margins.

Further, the company is trying to branch out into different delivery sectors, such as pharmaceuticals and groceries. These initiatives may help the business improve profitability by reaching a new subsection of customers. 

Therefore, I would buy the business as a speculative investment for my portfolio. This is a high-risk play, but as the Deliveroo share price continues to slide, I think its valuation is becoming more attractive, improving the opportunity. 

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Deliveroo Holdings Plc. 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.

2022 is starting out very well for many UK shares. The FTSE 100 index, as I have pointed out a few times before, didn’t just cross 7,500 in January, it has actually managed to stay above that level for multiple sessions as well. And this despite some persistent fears about Omicron, sky-high inflation, and the fact that excess liquidity will dry up soon, quite likely to the stock markets’ detriment. 

I think we could see the persistence of all these themes throughout 2022, but also the return of growth. The UK’s economy in particular, is forecast to grow at a pretty robust 4.7%, a much bigger growth rate than for other major European economies like Germany and France. And this in turn, could spillover into UK shares as well. However, I must still be discerning in my assessment because not all stocks are likely to benefit equally. 

Best UK shares during high inflation

For instance, I think high inflation could impact stocks that are consumer facing, have limited pricing power, and have also seen a fair bit of recovery already. These include stocks like grocers and non-essential retailers, as examples. However as long as growth is robust, inflation could benefit stocks like oil biggies and banks, which have already been on a roll in the recent past. And with the further expected rise in oil prices and interest rates, the stocks could benefit even more.

Not only are these stocks likely to see more capital growth, I think their dividends are due for increases as well. Their dividends suffered during the pandemic, and are still not back to pre-Covid-19 levels. Of course if another variant were to rear its head, these stocks would be the first to plunge. But all things considered, I doubt if the virus will spring any catastrophic shocks again. 

Best dividend stocks for 2022

As far as dividends go, though, I would not depend on last year’s dividend stars, the multi-commodity miners. The big reason why they saw a huge windfall of profits was on account of government spending to support the economy during the pandemic. However, with public spending now being withdrawn, commodity price forecasts have declined. Even if growth were to remain robust, which would positively impact their fortunes, I am not sure they would be at the same levels as last year. 

As a long-term dividend investor, I think I am better off buying FTSE 100 utilities instead. Irrespective of where we are at in the macroeconomic cycle, these stocks are dependable. Demand for utilities suffers less during downturns and as a result they are far less likely to cut dividends during such times. And even during good times, their dividend yields are pretty much consistently above average. The upside for them is never quite as high as that for the miners’ last year, but there is something to be said for consistency. 

In sum, for growth I’d buy oil and banking stocks right now. And for dividends, utilities are my pick. 

Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

I have been looking for dividend shares that could provide a dependable passive income for my portfolio. I say dependable and not guaranteed because dividend income from shares is never a sure thing.

There will always be a risk that the companies in question could reduce their payouts to investors. If profits fall, or interest costs rise significantly, these businesses may have to hold back more cash to cover costs. Shareholders may be the first to feel the pain in any adverse scenario. 

Still, I believe some companies have more dependable dividends and others. Here are two REITs that fit my model. 

Passive income champions

Income from property can be more predictable than from other assets. This is especially true when landlords and tenants have agreed on a long-term contract. 

Secure Income REIT (LSE: SIR) has developed a business around this principle. The company has acquired a portfolio of properties that have long-term contracts. These tend to be unique and specialist assets, such as theme parks, supermarkets and care homes. 

These unique assets are let to highly liquid and financially stable tenants. Contracts are also usually tied to inflation. This combination of factors suggests the stock has a much more predictable and stable income outlook than other investments.

Unfortunately, even these qualities do not exempt the company from the powerful economic cycle. A sudden downturn in property prices, increasing interest rates or rise in corporate defaults, could all impact the value of its property portfolio and tenant income. 

Despite these challenges, I would acquire Secure for my passive income portfolio for its 3.5% dividend yield. 

Rental property 

The PRS REIT (LSE: PRSR) is building a portfolio of private rental properties across the UK. The company’s ambition is to develop more than 5,000 properties and generate a revolution in the buy-to-let market. 

PRS is building high-quality properties in large estates, which it offers on multi-year contracts. These assets are particularly appealing for renters and the company. New buildings have lower maintenance costs and are more appealing for renters. The multi-year contracts guarantee an annual income and attractive return on investment. 

The most considerable risk to this business model is the threat of regulation. Additional regulations, such as a rent cap or additional legal requirements for landlords, could increase costs and reduce returns. The group may have to sell its properties to other investors in the worst-case scenario if returns fall significantly. 

Still, thanks to its focus on the private rental market, rent collection has remained strong throughout the pandemic. This has supported the group’s dividend yield, which stands at 3.8%. 

With more developments planned, it looks as if the company has the potential to increase its dividend steadily over the next few years. On that basis, I would acquire the stock for my portfolio. 

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

Setting up passive income streams is a great way to get some extra money without working hard for it. Some of my favourite passive income ideas are dividend shares. By investing in them I can receive some of the profits of large, successful companies, from Apple to Tesco.

Even better, I do not need a lot of money to start getting this income. Here are some ideas I would consider using for a weekly budget of £20.

Dividend shares as passive income ideas

First, I will cover a few practicalities. £20 a week adds up to a little over £1,000 per year. How much passive income I generate will depend on the dividend yields of the shares I buy. That is the percentage of the share price that a company pays out as dividends each year. Imagine I invest in shares with an average yield of 5%, which is above the FTSE 100 index average yield but certainly possible. Based on that, I would expect to earn an annual passive income of £52 from one year of investing £20 per week.

That might not sound like much, but it is only the start of things. If I keep going, in the second year I could earn dividends from shares I buy during those 12 months. But I will still earn any dividends paid by the shares I bought the year before. In this way, after a decade investing £20 a week in shares yielding 5%, I would hope to be receiving weekly passive income of £10. On top of that, I would still own the shares in which I had invested the money. I could sell them at any point I chose, although not necessarily at a profit.

Dividends are never guaranteed. A company might have a bad year in its business and decide to cut its dividend, for example. Then again, things might get better over time. I may be fortunate and find that a company I have bought pays me higher dividends each year. As I do not know what will happen, I would diversify my holdings across different companies and business areas. That way I would reduce my risk in case some of my passive income ideas turned out to be worse than I hoped.

Tobacco

Tobacco companies can be lucrative passive income ideas. Manufacturing costs are low. Tobacco is a mature industry with limited scope to invest in growth, so capital expenditure requirements also tend to be low. Customers are willing to pay a premium price for tobacco products, so producers have pricing power. Taken together, those factors account for the massive cash flows common in tobacco.

Those cash flows can fund big dividends. That is the case at both Lucky Strikes owner British American Tobacco and John Player Special maker Imperial Brands. I use both of these passive income ideas in my portfolio at the moment. They currently yield 6.9% and 7.9%, respectively.

Long-term decline in cigarette demand is a risk, although price increases may help to offset the profit impact as volumes fall.

Telecoms

Another industry that generates substantial cash flows is telecommunications. Customers often get locked into long contracts. The desirability of services such as 5G enables suppliers to charge premium prices.

Long-term customers paying high prices is a recipe for profit. But to provide services, companies have to invest in expensive networks. That sort of capital expenditure can eat into profitability. That is one reason I am more attracted to giants than minnows when it comes to choosing telecom shares for my portfolio. Industry titan Vodafone yields an attractive 6%. It is among the passive income ideas I would consider for my portfolio.

Utilities

Shares in utilities like water and electricity companies are popular passive income ideas. The recurring nature of revenues for essential services means that utilities tend to be reliable dividend payers, although, as I said, dividends are never guaranteed.

One utility I would consider holding in my portfolio is energy network operator National Grid. Its electricity distribution network enables it to support recurring profit streams. That can fund dividends to shareholders. Right now I could get a yield of 4.6% if I bought it for my portfolio. Electricity usage patterns could change, so the company may need to spend money on modernising its networks. That could hurt profits. But whatever happens, I reckon electricity will remain in daily use and need a distribution network for the foreseeable future. That is why National Grid is the sort of dividend share I would happily buy today for my portfolio and hold for a decade or more.

Putting passive income ideas into action

£20 a week adds up. But I still need to be realistic about the scale of my passive income ambition. Imagine that in my first year of investing, I split my money evenly across Imperial Brands, Vodafone, and National Grid. I would exclude British American Tobacco in this example to avoid my portfolio being too concentrated in a single industry.

Those three shares have an average yield of about 6.2%. So my first year’s saving of £1,040 would hopefully generate annual dividends of about £64. In fact, over time they might get higher if the companies raised their dividends, which two of them did last year. Then again, they may also be cut at some point – Imperial Brands and Vodafone have both reduced their dividend in the past few years.

Passive income of £64 in a year is clearly not going to transform my working life. But it could help fund a fancy meal or make a useful addition to the holiday kitty. I think the real power of dividend shares as passive income ideas becomes clearer over the long term. Putting £20 a week into shares year after year, my passive income streams would hopefully rise substantially. Starting with £20 this week, I could begin to use simple passive income ideas that may be earning me money for many years to come.

Christopher Ruane owns shares in British American Tobacco and Imperial Brands. The Motley Fool UK has recommended Apple, British American Tobacco, Imperial Brands, Tesco, and Vodafone. 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.

At the grand old age of 91, it’s fair to say that Warren Buffett has seen a market crash or two in his long life. Despite this, he’s still managed to become one of the richest people in the world, thanks to his level-headed approach (and awesome stock-picking skills). I think that makes him worth listening to at times like this.

Here are three bits of Buffett brilliance for troubled times. 

Buy the best

“Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”

As a general rule, most people like it when they can acquire something really nice for a lower price than expected to pay. That’s why Black Friday and Amazon Prime Day are so popular. In the topsy-turvy world of investing however, many people find it hard to buy when prices fall. To really benefit from a stock market crash, therefore I need to challenge this aversion.

Of course, this does not mean I buy any old thing because it’s now trading at a low(er) price. No, the point here is to look for UK stocks (and possibly a few from abroad) that have all the hallmarks of quality businesses. For Buffett, these are companies that have ‘economic moats’, competitive advantages that mean they can continue growing revenue and profits for many years.

Get stuck in

“A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.”

If the previous quote from Buffett highlights what sort of stock I should be hunting down, this second bit of wisdom is all about how much of it I should be buying. Put simply, Buffett believes we should be snapping up as much as we can. Of course, this advice is reversed when markets are soaring. In such a scenario, the ‘Sage of Omaha’ thinks we need to be prepared to buy less or sit things out completely. 

Now, going against the crowd is never easy, especially when share prices continue to tumble. So one way I try to get around this is to be greedy in tranches. In other words, I make multiple purchases of great UK stocks rather than attempting to buy at the absolute bottom to maximise my gains.

Psychologically, this makes things much more bearable. It also ensures I don’t suffer from ‘analysis paralysis’ and miss a great opportunity.

Take your time

“The stock market is a device for transferring money from the impatient to the patient.”

As a long-term Foolish investor, these final words from Buffett are about as soothing as I can find. Knowing I plan to stay invested for decades helps take the sting out of nasty market moves like this one.

Adopting this mentality also gives me an edge on professional investors. Unlike them, I’m not required to explain my decision-making or outperform a specific benchmark every quarter to keep my job. Put another way, their chosen careers require these undeniably talented people to do everything that Buffett advises against. They are forced to become impatient.

It’s this commitment to focusing on the long-term outcome that makes a crash or correction easier for me to bear. It’s also what I believe will see me eventually accumulate a non-insignificant amount of wealth.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Amazon. 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.