When I was writing at the start of the week, the FTSE 100 index was falling. I was getting jitters that another stock market crash might be around the corner. Thankfully, though, it recovered over the following days. As a result, in June so far it’s up 5.2% from May. If this trend continues, this will be the second straight month of index gains, making it the best time to invest in UK shares I believe. Here’s why.
Best time to buy
Equity markets aren’t at dizzying heights right now. This means that as an investor I don’t have the sneaking suspicion that I’m investing at the peak and its only downhill from here. The markets aren’t plunging either, which can seem like a risky if not downright dangerous time to invest. Stock markets are somewhere between the two extremes right now. This to me says that I can be reasonably certain that there’s room for the FTSE 100 index to rise further.
In other words, it means that as an investor, I can be confident that the money I put into the stock markets right now will grow. There’s more good news. There are plenty of FTSE 100 stocks that make good purchases at this time. Cyclical stocks, for example, took quite the beating during the stock market crash, but are full of potential now.
Best UK shares to buy
Real estate stocks like Persimmon are among these. PSN has bounced back from the lows it touched during the crash. Analysts’ stock price forecasts are encouraging, as is its past performance. Real estate is by no means out of the woods, but over time stocks like PSN can reap rewards for investors. Other FTSE 100 UK real estate shares are worth considering as well.
I’m also keen on stocks in growing Industries, for instance, those of technology-driven companies. If there was any doubt about the potential of these UK shares, the lockdown has removed it. Stocks like Rightmove, Just Eat Takeaway, and Ocado are some examples of FTSE 100 shares like these. Even if their multiples look high, I’d consider them. That’s because their growth potential is quite strong and investors put a high value on them .
More traditional technology companies like Relx and the Sage group are also good investments in FTSE 100 stocks. Their share prices have risen since the crash, but still have some potential to increase. I say this because the prices are still lower than they were during the pre-crash months. These are good defensive stocks. Their revenues are relatively dependable, making them good to have in a portfolio especially during recessions.
The stocks mentioned above are just a handful of examples of the best UK shares to buy right now, however. There are plenty of others that can hold us in good stead if we are ready to hold them for at least a three to five year period.
Manika Premsingh owns shares of Rightmove. The Motley Fool UK has recommended Just Eat Takeaway.com N.V., RELX, Rightmove, and Sage 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.