Our message here at The Motley Fool is clear as crystal. Investors like you and I shouldn’t stop buying UK shares after a stock market crash. Market volatility is nothing new, and over the long run, those who have built a balanced portfolio of quality stocks are still likely to have made great returns.
In fact, it’s our belief that investors should use stock market crashes to boost their chances of getting rich. You and I should “be fearful when others are greedy and greedy when others are fearful,” as billionaire investment guru Warren Buffett famously said. This strategy can supercharge your eventual returns by letting you buy great stocks at cheap prices and then watch them balloon in value as profits climb on the back of improving economic conditions.
3 cheap UK shares I’d buy today
Studies show that with a little discipline you may even be able to make a million with UK shares. It’s been proven that long-term investors make an average annual return of between 8% and 10%. So a 25-year-old who invests £200 a month in UK shares could potentially make a handsome £1.1m retirement pot by the age of 65.
Here are three top-quality UK shares that are on my watchlist following the crash. I’m expecting them to soar in value over the medium-to-long term.
- Digital transformation specialist Kin & Carta is certainly worth serious attention, I feel. It trades on a forward price-to-earnings (P/E) ratio of 12 times right now. And it’s a multiple that fails to reflect the wide number of growth levers in its arsenal, whether that be through the fast-expanding e-commerce, cloud computing or artificial intelligence arenas.
- Trifast meanwhile offers the beauty of low multiples — in this case a forward P/E ratio of 13 times — along with bulging dividend yields. For 2020 this UK share carries a yield of 3.5%. I’d buy the industrial fastenings company on expectations that demand from its core automotive and electricals markets will rebound strongly as the global economy recovers.
- I’m also thinking of snapping up Persimmon. This FTSE 100 share trades on a forward P/E multiple of 13 times and carries a mighty 4.1% dividend yield. Last week the housebuilder resurrected the dividend in a sign of its sunny profits outlook. A huge and growing supply gap (which the BBC recently put at 1.2m homes) should keep demand for this UK share’s new-builds soaring for many years too.
More top stocks for savvy investors
Buying these UK shares at today’s prices is a great way to turbocharge your eventual returns. You can buy them today and watch them soar in value as the global economy improves. These are just a taster of some of the quality stocks trading too cheaply following the stock market crash. And The Motley Fool can help you find even more with its huge library of articles and special reports. They could even push you closer towards becoming an ISA millionaire.
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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