During worrying economic times, buying shares on the London Stock Exchange may seem like the worst things an investor can do. Even buying the biggest and strongest FTSE stocks can present big risks.
Human nature dictates we should run away from danger and not towards it. So spending hard-earned cash on UK shares that could immediately plummet in value seems quite counterintuitive.
This is why I think it’s worth listening to successful investors like Warren Buffett and looking to history as a guide. Those that do will find the stock market always bounces back following periods of extreme macroeconomic pain. They’ll see too that many investors who bought in at the bottom of the market made a fortune.
Here are three top FTSE 100 stocks Im considering buying before the market recovery. I think they could double my money if a new bull market begins.
A stream of improving Chinese data suggest now could be the time to buy Antofagasta shares. Latest economic news from the country showed industrial profits down 6.5% in May, better than the 8.5% drop a month before.
This is still a negative move, of course. But the news boosts hopes that China — the world’s biggest commodities consumer and user of 50% of all copper — is starting to put Covid-19 disruptions behind it.
A continuation of this recent trend could begin a strong recovery in copper miner Antofagasta’s share price. Though remember that an array of threats to production, from strike action and power outages to drought, exist that could emerge and hit earnings hard at companies like this.
Banks like HSBC Holdings are among the most economically sensitive out there. This means they can fall heavily in price when upturns come along. But, on the flip side, they can soar during bull markets as economic conditions improve.
HSBC would be one of my preferred banking shares to buy. This is because I think it could deliver exceptional long-term returns because of its focus on Asia. Financial product demand should soar here as personal wealth levels and population numbers soar.
I also like HSBC’s terrific brand power and industry clout. Though I’m also aware that the business will have to work extremely hard to bat back the threat posed by challenger banks.
Building materials supplier CRH is a UK stock I already own. And I’m thinking of increasing my holding as I think I could double my money during the economic upturn. In this environment, demand for its materials might take off as construction rates improve.
I like this FTSE index business because of its wide geographic footprint spanning North America, Europe and Asia. Not only could trading boom as infrastructure spending picks up globally, but the UK company also stands to gain from rapid urbanisation in emerging markets.
A lack of suitable acquisitions could hit its growth plans. But I still think CRH will have the tools to rocket in value over the next decade.