UK share prices seem to be stuck in neutral at the moment. The FTSE 100 took out the technically- and psychologically-critical landmark of 7,000 points in mid-April. But enduring fears over the Covid-19 crisis mean it’s made little progress since then.
Meanwhile the FTSE 250 has reversed from the record peaks above 22,900 points enjoyed at the start of June. Are UK share prices about to soar again? Or are we on the cusp of another stock market crash?
As a long-term investor, I’m not concerned about what share prices will do in the next several weeks, months, even years. This is why I’m always searching for the best stocks to buy in my Stocks and Shares ISA. Over an extended time horizon, the impact that temporary volatility on share markets has on eventual investor returns tends to be negligible.
How I buy UK shares
I don’t know with any degree of certainty how UK share prices will move in the short-to-medium term. In truth, no one does. Such is the broad spectrum of geopolitical, macroeconomic, social and, indeed, company-specific factors that are in play at any one time.
What I do know is that stock markets rise in value over a period of many years. The FTSE 100, for example, now trades significantly higher than the 2,400 points at which it began in 1990. And the FTSE 250 is far more valuable now than it was 30 years ago when it traded around 2,700 points.
This is why I don’t put off buying UK shares because of the possibility that stock markets could fall again. I look for the best stocks to buy according to how well I think a particular company will be performing at least a decade from now. The cream tends to rise to the top, after all.
2 of the best stocks to buy?
With this in mind, here are two UK shares I’m considering buying today for my shares portfolio. I think they could be some of the best stocks to buy for the next decade:
- The digital revolution is leading to an explosion in cyber attacks. Four-fifths of businesses Atlas VPN surveyed have endured a surge in attacks over the past year. And the problem looks set to keep growing as e-commerce and homeworking increases across the world. I’d buy cyber security firm Kape Technologies to ride this trend despite the problem of fierce competition in this arena.
- I’d also buy Vistry Group for my ISA this July. Hargreaves Lansdown recently commented that “the housing market is marching higher and, so far, price growth looks set to comfortably outpace cost inflation.” I think demand for new homes looks set to continue outpacing supply as interest rates should remain low. This is even though a change to government incentives like Help to Buy could hit buyer activity and thus profits at UK housebuilding shares.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Hargreaves Lansdown. 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.