Are we about to see another once-in-a-lifetime opportunity to buy cheap UK shares?

Does the news of a new Covid-19 variant mean it’s time to shop for UK shares or is there a new stock market crash coming? This is what I’m doing.

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.

The FTSE 100 lurched lower this morning following yesterday’s breaking news about a new variant of the Covid-19 virus.

The UK government has imposed “new precautionary travel restrictions” and added six African countries to its travel red list. Meanwhile, the UK Health Security Agency (UKHSA) has the new variant “under investigation”. However, no instances of the variant have yet been found in the UK.

Acting swiftly

The government’s response comes after several public voices criticised slower actions taken earlier in the pandemic. And maybe the swift move is justifiable because of the nature of this new strain of the virus.

The gov.uk website explains that the new variant includes “a large number of spike protein mutations” alongside “mutations in other parts of the viral genome”. And the government said these potentially biologically significant mutations could change the behaviour of the virus regarding vaccines, treatments and transmissibility.

Although the future evolution of the virus is unknowable, I’m not expecting another crash in the markets as we saw in 2020. And that’s even if this new variant gains some traction. Back then, the virus was completely unknown before it hit the world. And there were no vaccines or proven treatments for the disease.

So, I reckon the stock market crash developed because of the unknowns and the widespread shutting down of economic activity. It led to some dubbing it a once-in-a-lifetime event and an opportunity to buy cheap shares.

My guess is the world of science will likely be all over the latest developments regarding the virus. And treatments and vaccines will evolve to fight the threat. However, nothing is certain, of course.

Investing for the long haul

But I’m inclined to use worrisome news affecting the stock market as an opportunity to search for quality stocks selling at better prices. It’s been reassuring for me to see how businesses have been so resourceful and adapted to the new world featuring coronavirus. I believe many enterprises will adapt again if they need to. And in the long term, I may be pleased that I bought shares when they were on offer.

And in the past, well-known investors have done well with stocks by adopting a long-term perspective. Warren Buffett is known for shopping for shares when the economic clouds are in the sky or when most people are worried about something. It’s when he tends to get the best prices for the stocks of what he calls “wonderful” businesses. And he once said of the other side of the equation: “You pay a high price for a cheery consensus.”

So, with my long-term investing perspective, I’m shopping for shares and working hard with my watch list. There’s some worrisome news in the headlines right now. But I’m trying to look ahead and imagine what businesses and stocks will look like in five, 10, 15 and 20 years from now. Although nothing is certain or guaranteed, I reckon many will have done well by then.

I don’t think this new variant will cause a once-in-a-lifetime-style crash any time soon, so I’m buying shares now to hold for the long term. However, I could be wrong with my assessment of the situation.

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.

Kevin Godbold 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.

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 »