Buying stocks and holding them for the long term is one of the most effective ways to build wealth. Over the long term, stocks typically earn returns of around 7-10% per year – well above the returns offered by savings accounts.

However, given the market volatility, is now a good time to start buying shares? Let’s talk.

Rare investment opportunities

While investing during times of so much uncertainty may not seem like a good idea, history shows that such periods are often actually great times to buy stocks. When uncertainty is high – and investors are nervous – there are often attractive opportunities in the market that are not available when the market is rising and investors are relaxed and bullish about the future.

By buying at low levels during times of market stress, investors can potentially do very well when market conditions normalize. History shows that those who are willing to buy on dips and are patient tend to be rewarded in the long run.

It is worth noting that the market has recovered from geopolitical flare-ups like the one we have now experienced many times in the past. For example, in recent years the market has rebounded from the war in Ukraine and the Israel-Hamas conflict.

Of course, the current conflict poses some risks to the economy in the near term – high oil prices may harm the economy. However, in the next five years, the economy and the market will probably recover.

Many stocks fell

When it comes to investment opportunities, I personally see plenty of them right now. Many of the stocks I follow are 20%, 30% or more below their 52-week highs, despite the fact that the underlying companies are performing very well and have huge growth potential over the long term.

Check this name

One stock that I think is worth watching today is the stock market Microsoft (NASDAQ: MSFT), one of the largest technology companies in the world. Its current price is around $370. In November it was almost $550.

From an investment perspective, there’s a lot to like about Microsoft. First, its software is used by companies all over the world, which allows it to generate reliable, recurring revenues.

Secondly, it is one of the largest players in cloud computing. Looking ahead, this industry is expected to grow by almost 20% annually over the next five years, so there is great potential for growth.

As for the valuation, it looks very reasonable. Currently, the company’s price-to-earnings (PE) ratio is around 20.

I would note that many UK investors clearly see an opportunity at this valuation. Over the last week, the company’s shares were one of the most frequently purchased shares on the stock exchange AJ Bell.

Of course, there are risks. One issue that worries some investors is the company spending a lot of money on artificial intelligence with no guarantee that it will pay off.

However, Microsoft has dealt with technological changes before. So I think it’s worth giving him the benefit of the doubt and taking a closer look at him.

It’s worth noting that investors can reduce their risk by purchasing shares of many different companies. Another intelligent risk management strategy to consider is to slowly drip money into the market.