The shares I’d buy in a stock market crash

Rupert Hargreaves explains why he’d buy these three FTSE 100 shares in a stock market crash.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

It looks as if the risks of a stock market crash are growing. The economic recovery’s stalling, and rising commodity prices are leading to inflation across the world. This could hit consumers in the pocket, reducing their spending powers and further hurting the economic recovery. 

At the same time, central banks are considering raising interest rates. This would make it more expensive for companies to borrow and reduce the demand for lending. If it becomes more costly to borrow money, businesses may put growth plans on ice. 

While it’s impossible to predict what the future holds for equity markets, with risks growing, I’ve started to prepare for a stock market crash. 

If the market does take a turn for the worst, I want to take advantage of this. There are a couple of companies on my list of shares to buy that I hope to be able to pick up at a discount. 

Stock market crash bargains 

The first company on my list is the retail giant Next. This FTSE 100 company has outperformed all expectations over the past two years. Thanks to heavy investments in its online operation and technology, sales and profits have jumped. 

During the first half of 2021, total Next brand full-price sales increased by 8.8% over 2019’s figure

Unfortunately for me, I’m late to the party with Next. Shares in the FTSE 100 company are trading at a relatively high valuation. That’s why I want to take advantage of a stock market crash to snap up some of the retailer’s shares.

However, it won’t be immune to some of the challenges outlined above, such as rising costs and a slowdown in economic activity, but it’s well-prepared to weather the storm. 

Global growth

Other companies on my list of stocks to buy include Prudential and Bunzl. I think both of these international businesses are primed for growth, no matter what the future holds for the global economy in the near term. 

As economies in Asia expand, demand for financial services is likely to increase. That will benefit Prudential. 

Bunzl’s size is its most considerable advantage. The distribution group has substantial economies of scale, which aren’t available to its peers. This advantage has helped the organisation snap up smaller competitors in the past. As long as management doesn’t deviate from this plan, I think the company will continue to grow. 

That’s not to say either group won’t have to fight off fierce competition in both the distribution and financial services markets. This is the most considerable risk both companies face. 

Despite this challenge, I’d buy both of these global growth stocks for my portfolio in a stock market crash. I think they have enormous potential, no matter what happens to equity markets in the near term. 

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.

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Next. The Motley Fool UK has recommended Bunzl and Prudential. 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.

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »