Thus far, 2020 has turned out to be a turbulent year for investors. The price of gold has soared and many shares have been plagued by volatility. Moreover, in the aftermath of the major sell-off, global stocks rose sharply, even prompting fears of second market crash. However, amidst the chaos, I’ve scoured the stock market in search of the best investments for the remainder of 2020. Here’s what I came up with.
First and foremost, I think investing in companies with defensive characteristics is a wise play moving forward. Given the economic uncertainty and the possibility of a second wave of Covid-19 infections, the stock market could yet crumble under the pressure, prompting a second major sell-off. In this scenario, investors holding defensive shares are almost guaranteed to be less impacted by falling share prices.
For example, take consumer goods giants Unilever and Reckitt Benckiser. Both manufacture essential household products that are in demand no matter the macroeconomic climate. What’s more, we’ve witnessed their business resilience over the first half of the year, as seen in their financial results. Like-for-like health and hygiene sales were up 11.9% at Reckitt, while total sales fell by just 0.1% at Unilever.
In my view, AstraZeneca and GlaxoSmithKline are also worthy of a mention. Both companies are market-leaders in the healthcare sector, which I think is an industry with an immensely favourable long-term outlook. I reckon ageing populations and an increased emphasis on healthcare spending mean that these companies have a bright future.
Gold mining shares
On a similar note, I’m confident that gold-mining shares are among the best investments for 2020 and beyond. As with defensive companies, gold miners often prosper in poor economic conditions while other businesses struggle. Additionally, many boast bulky dividend yields.
Among the large and mid-caps, I’d highlight Centamin and Polymetal as top perfomers. Those interested in small caps should take a look at Greatland Gold, which has a focus on gold mining in Australia. If you’re after a more in-depth look at the gold miners though, my colleague Anna discusses them in more detail here.
Finally, I’d keep my eye on the best UK growth shares in order to maximise returns in the long run. Companies with huge growth potential often make lucrative investment opportunities, provided they reach their potential further down the line.
As such, I’d focus on growth shares that are poised to continue thriving despite poor trading conditions. For me, that means taking a look at companies such as Ocado and AO World, which have performed exceptionally over the last six months. Both are online-only retailers that are effectively utilising technology to grow and expand operations.
Last but not least, online trading and spread betting company CMC Markets strikes me as one of the best investments looking ahead. The small-cap stock has explosive upside potential in my eyes, primarily thanks to its ongoing impressive performance and strong balance sheet.
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Matthew Dumigan has no position in any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline and Unilever. 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.