The past few weeks have illustrated that the stock market often seems to have a mind of its own. Economic uncertainty means that one day’s rebound could be met the next day with crashing share prices.
With the volatility in the stock market showing no sign of easing, it can be difficult to determine the best UK shares to buy today. However, as long as investors are prepared to buy and hold for the long term, I think the market crash presents an opportunity to buy quality FTSE 350 shares. In my view, many UK stocks look dirt-cheap at the moment relative to their average historic valuations.
Best UK shares
For example, the Lloyds share price has fallen by 56% this year, to its lowest level since 2012. Thus far, the bank’s balance sheet has proven more than capable of handling the crisis. In fact, cancelling the dividend has meant Lloyds’ key capital ratios have actually improved quarter-on-quarter. As a respected and well-capitalised bank, I think Lloyds will whether the storm comfortably. As such, buying shares in the bank today could prove a smart investment in the long run.
By contrast, global healthcare giant GlaxoSmithKline has thrived recently. The company reported healthy first-quarter sales and profit growth, which rose by 19% and 14% respectively. Full-year guidance remains unchanged as the defensive nature of GSK means earnings should be stable. Moreover, I think healthcare and pharmaceutical firms have a bright future. With ageing populations and advancing medical technology, healthcare stocks such as GSK and AstraZeneca are wise long-term investments in my view.
Finally, with the phased reopening of construction sites and estate agents confirmed, UK housebuilders such as Taylor Wimpey and Bellway look like solid investments in my eyes. What’s more, new home sales throughout the lockdown period remained resilient, with prices reported to be similar to pre-pandemic levels. With the long-term outlook in the property market remaining favourable for housebuilders, these two could be strong long-term buys.
Hold for the long term
The current conditions in the stock market are unsteady and the macroeconomic outlook is gloomy. With that in mind, it’s vital for investors to hold for the long term. That’s at least around five years, but ideally much longer.
Because markets are unpredictable, investing for the long term allows you to ride out the temporary downswings without having to panic. Additionally, efforts to try and make a quick sale from crashing share prices are often futile because at the end of the day, time in the market beats timing the market.
Remember this simple concept when buying a selection of top UK shares and you’ll be well on the path to building wealth. So, if you have spare cash to invest, don’t waste the opportunity the market crash brings to buy cheap shares and hold them for the long term.
Matthew Dumigan owns shares in Taylor Wimpey. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK has recommended Lloyds Banking Group. 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.