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Forget about the economic downturn! I’m still buying UK shares in an ISA to get rich and retire early

Royston Wild
·3-min read
Image of person checking their shares portfolio on mobile phone and computer
Image of person checking their shares portfolio on mobile phone and computer

Another day, another load of chilling news regarding the evolving Covid-19 crisis. Those who hoped that the worst of the pandemic was over — and that the global economy was poised for a sharp rebound — need to think again. The trading outlook for many UK shares remains pretty scary.

Particularly concerning is news of ballooning infection rates in the US. Latest data shows that there were more than 121,000 new coronavirus cases in the world’s largest economy on Thursday. This smashed the previous record of around 100,000 set just one day before and raises fears of another broad lockdown. Meanwhile, Covid-19 restrictions are being put back up all over Europe as infection rates in many countries hit new records.

I’m still buying UK shares for my ISA!

There’s clearly plenty for UK share investors like me to consider before splashing the cash. And as if I haven’t got enough on my plate, I need to consider the threat of rising sovereign debt levels, Brexit, and the chaotic US election process and its consequences for the global economy.

It’s possible that another stock market crash could be just around the corner. It’s also likely that the dividends paid out by UK shares could dive once more as profits suffer. But it hasn’t stopped me from buying stocks in my Stocks and Shares ISA.

The letters ISA (Individual Savings Account) on dice on stacks of gold coins on a white background.
The letters ISA (Individual Savings Account) on dice on stacks of gold coins on a white background.

Firstly, I don’t fear another stock market crash. As a long-term investor I’m not discouraged by the possibility that the stocks I buy could fall in value. History shows us that UK share prices always roar back in the years following market corrections. The FTSE 100 famously doubled in value in less than a decade following the 2008/09 banking crisis.

The 2020 stock market crash means I can buy quality UK shares that have plummeted in value today, and then get rich in the coming years as the global economy improves, profits from UK plc pick up, and investor confidence recovers. Long-term investors like me make an average annual return of at least 8%. Buying UK shares after a crash gives me the chance to comfortably beat those average rates of return.

Keep expecting big dividends!

Secondly, there are plenty of top UK shares that should pay big dividends whatever happens to the global economy. I’ve recently invested in Tritax Big Box REIT, for example, as e-commerce growth is likely to remain lively even as broader retail conditions suffer. This means that rents from its logistics and warehousing spaces should continue rolling in nicely, creating more big dividends for me.

And there are plenty of other non-cyclical or counter-cyclical stocks that should keep paying chunky dividends too. UK share pickers can choose from a wide array of telecoms providers, healthcare companies, general insurance sellers, and electricity generators and suppliers, to name just a few of these apparently (to me) bulletproof sectors. Clearly it’s still possible to make big shareholder returns despite the economic downturn. And experts like The Motley Fool can help investors like me maximise the profits I can make from UK shares.

The post Forget about the economic downturn! I’m still buying UK shares in an ISA to get rich and retire early appeared first on The Motley Fool UK.

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Royston Wild 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.

Motley Fool UK 2020