If you would like to get rich and retire early, the stock market crash can help by allowing you to buy FTSE 100 stocks at bargain prices.
If you want to build a retirement portfolio tax-free in a Stocks and Shares ISA, you need to take advantage of bear market buying opportunities like this. By investing when share prices have crashed, you can pick up top FTSE companies at reduced prices. Then hold on for the long term until Covid-19 is just a bad memory.
I wouldn’t take undue risks in the dash to get rich and retire early. We still have no idea how long the coronavirus crisis and stock market crash will last, and how much damage it will inflict.
Get rich and retire early, starting today
I would therefore steer clear of stocks that have been hammered in the crash, such as easyJet and British Airways owner International Consolidated Airlines Group, whose operations have been grounded and may only survive with government support. Any bailout may carry onerous terms, hitting share price growth and dividend prospects.
I would also be wary of companies that were struggling before the Covid-19 crash, such as The Restaurant Group. Its shares rose 70% on Thursday as bargain seekers rushed in, but I remain wary. Cineworld Group and Carnival also scare me.
Stocks hit hardest may rebound fastest at first, but to get rich and retire early, I would prefer to pick up solid businesses with strong balance sheets, steady cash flows, manageable debt levels and enduring competitive advantages.
Stock market crash dividend heroes
Insurer Prudential‘s fast-growing Asian operations make it a tempting buy for an ISA. So does global spirits giant Diageo‘s strong range of premium brand labels. Both have fallen in the stock market crash, both should recover so you can reap rich rewards.
As FTSE 100 companies cancel their dividends, I’m tempted by those who are still standing by theirs. These include tobacco giants British American Tobacco and Imperial Brands, supermarket chains Sainsbury’s and Tesco, and pharmaceutical giant GlaxoSmithKline.
Mining giants BHP Group and Rio Tinto are also holding firm for now. Household goods giant Unilever, looks a great buy-and-hold today. Pop this into your portfolio during the stock market crash and it could help you build up a big nest egg.
Don’t let the market crash go to waste
Oil majors BP and Royal Dutch Shell are standing by their dividends for now. And while there are no guarantees, today’s yields of 9.65% and 9.99% respectively are tempting. FTSE 100 fund manager Schroders has a lower yield at 4.3% but looks relatively solid.
The stock market crash returns or the market recovery may continue. But I think buying top FTSE 100 stocks at today’s reduced prices could set you on course to get rich and retire early.
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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline and Unilever. The Motley Fool UK has recommended AstraZeneca, Carnival, Diageo, Imperial Brands, Prudential, and Tesco. 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.