Why I’m following Warren Buffett and buying cheap UK shares to make a million!

Investors can do a lot worse than listen to investment experts like Warren Buffett. Here’s why I’m following his advice and buying UK shares today.

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Signs that the Covid-19 crisis will drag long into 2021 and hamper the economic recovery has spooked financial markets. The FTSE 100 and FTSE 250 have basically lost all the gains they enjoyed during a spritely start to the year. Worsening infection rates and fresh lockdowns across the globe mean UK share prices could have much further to fall in the near term too.

I have no plans to stop buying British companies for my Stocks and Shares ISA however. I think those who’ve chosen to pull back and halt buying UK shares are making a serious mistake. History shows that share prices always come roaring back from stock market crashes like that of early 2020.

Thinking like Warren Buffett

At times like these, I’m reminded of the wise words of investment guru Warren Buffett. He famously pointed out: “In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”

The same theme of strong stock market recoveries has been repeated time and again in this new century too. Indeed, the Dow Jones closed at all-time peaks of 31,097 points just a couple of weeks ago. This is despite the world still being trapped in the midst of pandemic; huge civil unrest emerging as protestors stormed US Congress; and new US-China tensions threatening in the background.

close-up photo of investor Warren Buffett

UK shares to soar again in the 2020s

As I say, the FTSE 100 might be slipping again in January. But I fully expect UK share prices to recover soon and to soar in the next few years. The economic recovery might be bumpy but corporate profits will steadily recover as the Covid-19 catastrophe gradually subsides. Stock prices will subsequently soar from their recent lows and make investors who buy in at current lows a fortune.

Remember that UK shares rocketed in value following the 2007-2008 financial crisis. Stock prices steadily increased during the 2010s. That was despite the spectre of a banking sector collapse and the disintegration of the debt-laden eurozone.

Indeed, the FTSE 100 rose and rose to eventually hit record highs of 7,877 points in the spring of 2018. This was up from levels of around 3,500 during the depths of the financial crisis nine years earlier.

Using history as a guide, there’s no reason why I think UK share prices won’t print eye-popping rises again this time around. Indeed, the huge stimulus measures launched by world governments and central banks gives me extra confidence in a stunning new bull market.

And I’ll keep investing in my Stocks and Shares ISA to get rich during the next decade. Using tips from experts like The Motley Fool, I plan to make millions like hundreds of ISA investors did during the 2010s.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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.

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