It’s clear that the global economy faces huge challenges following the devastating Covid-19 pandemic of 2020. Added threats like escalating trade tensions and Brexit are giving stock investors plenty to think about, too. I’ve continued to buy UK shares for my ISA despite these problems, however. There are simply so many cheap shares after the stock market crash that sitting on the sidelines would be a colossal mistake.
The 2020 stock market crashes gives you and me the opportunity to make a fortune. We can buy high-quality UK shares at low cost today and watch the value of our portfolios soar as economic conditions improve and profits bounce back. We all dream of achieving financial freedom, getting rich, and possibly even retiring early. Don’t waste it by worrying!
Top tips for nervous investors
It’s clear than UK share investors need to be careful before investing their hard-earned cash. The economic hangover from Covid-19 could persist for many years into the future. But there’s a multitude of tricks that you and I can use to protect ourselves.
Buying defensive stocks is one idea, meaning those companies where demand for their products remains largely unaffected by tough economic conditions. We’re talking food producers, defence contractors, and utilities here, for example. We can also buy shares in counter-cyclical shares which benefit during challenging times like these. These firms include pawnbrokers, discount retailers, insolvency practitioners, and alcohol manufacturers.
You can also buy firms that have clear advantages over their competitors or qualities that could help them keep growing profits regardless of the broader economic slowdown. Stocking up on UK shares with strong balance sheets is also a terrific idea in these uncertain times.
2 top UK shares on my watchlist
As I said, I’ve continued buying UK shares despite the threat of another stock market crash and a long economic downturn. Here are two I’m thinking of adding to my Stocks and Shares ISA today:
- STV Group’s sunk in value as advertising revenues at the broadcaster have collapsed. I reckon the business is a brilliant buy for long-term investors, though, thanks in part to the significant steps it’s taken to strengthen its balance sheet. This small cap trades on a forward price-to-earnings (P/E) ratio of just 8 times and sports a mighty 4.5% dividend yield.
- Sausage casings maker Devro offers even more for income investors to get excited about. This UK share offers a 6% dividend yield at current prices. It trades on a low forward P/E ratio of 11 times as well. Growing urbanisation and rising work commitments is driving demand for processed meat all over the globe. It’s a long-term trend that’s set to drive sales of this company’s products to the stars.
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