It’s fair to say that August has got off to a bumpy start for global stock markets. But this plays right into the hands of long-term focused Fools like myself. So, I’ve been doing what I’ve always done at times like this — making a list of FTSE shares I’d consider buying if things head further south.
Allianz Technology Trust
Allianz Technology Trust (LSE: ATT) endured a horrible last month. As I type, the share price is down by 17%.
This is, of course, no surprise. The recent mass sell-off in US tech titans was always going to smash sentiment in an investment trust that only invests in this often-volatile part of the market.
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But this is why looking at performance over years rather than months is so vital.
Despite recent poor form, the trust has delivered a share price gain of 93% in the last five years. Compare that to the FTSE 250 index in which it features (+6% over the same period) and we see just how profitable stock-picking can be.
Yes, there’s a risk that today’s (Tuesday’s) relief rally will run out of steam. But I reckon it’s a brave soul to suggest this investment trust can’t/won’t eventually recover and then some. After all, we’re only at the very beginning of an AI story that could provide a boost for decades to come.
Auto Trader
A second firm I’ve been eyeing up is vehicle marketplace provider Auto Trader (LSE: AUTO).
This company has many of the ‘quality’ hallmarks I look for when hunting for the best growth stocks to buy. These include a dominant position in its niche and a strong balance sheet that should withstand another period of economic upheaval. Thanks to it operating exclusively online, the FTSE 100 business also generates some of the biggest margins in the entire UK stock market!
There’s just one problem — Auto Trader’s stock hasn’t dropped by much in recent days.
According to my data provider, the shares still trade at a forecast price-to-earnings (P/E) ratio of 24. As great as this business is, that’s still dear. And one thing I’ve learned is that expensive stocks tend to get hit harder than most when a dip becomes a market crash.
So, I’m keeping this one on my wishlist for now.
IG Group
A third candidate to buy if it turns out we are going to hell in a hand cart is IG Group (LSE: IGG). In contrast to the other companies mentioned here, the online trading platform provider really makes its money when markets are volatile and traders try to take advantage of emotions jumping from greed to fear and back again.
Another contrast to note is that this stock is a lot cheaper than the Allianz trust or Auto Trader. The P/E sits a just below nine!
As good as this sounds, it’s worth highlighting that neither of the above will definitely protect the share price from falling in the event of a market crash. Some investors will invariably sell what they can to raise cash in times of trouble. This probably includes IG as its market capitalisation is over £3bn (which means its stock is very liquid).
On the other hand, there is a chunky, well-protected 5.3% dividend yield in the offing to compensate for any temporary paper loss.
