The Motley Fool

Stock market crash: how I’d use cheap UK shares to make a million

This year’s stock market crash caught many investors by surprise. However, it was also an excellent opportunity for long-term investors to buy cheap UK shares. 

Studies show that the best way to build a fortune in the stock market is to buy shares when they’re trading at low levels. And one of the best ways is to invest in a stock market crash.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

This might be challenging at the time, but investors who are brave enough to jump in at the bottom may be well-rewarded over the long run. 

Stock market crash investing

Buying investments in a stock market crash can be a risky business. It can also be extremely profitable if done right. Following a couple of stock-picking rules may help investors avoid losses when picking stocks. 

For example, here at the Motley Fool, we firmly believe that high-quality businesses are the best stocks to earn over the long run. That’s especially true after a stock market crash. Companies such as consumer goods giant Reckitt Benckiser, which has sizeable profit margins and owns some world-leading brands.

Shares in this giant may be more expensive than other businesses. However, it could be worth paying the premium to buy into the quality growth story. 

It may also be sensible to focus on globally diversified corporations, such as financial services giant Prudential. This company generates a large percentage of revenue from Asia and the US, which means it’s much less reliant on one particular economy. This international diversification could help the business outperform UK-focused firms over the next few years. 

Another sensible technique that might be worth following to find the best stock market crash bargains is to avoid any stocks with a lot of borrowing. Companies with a pile of debt are usually the most significant casualties in an economic downturn. The best way to navigate this issue may be to avoid these companies altogether. 

The road to a million 

Following these rules could help you make the most of the stock market crash. It may also help you build a million-pound fortune over the long run.

For example, over the past decade, both Reckitt and Prudential have produced an average annual total return of 12% for investors. At this rate of return, an investment of £2,500 a month in each company would be worth £1.1m today. 

These figures are only guidelines, but they show just how easy it could be to make a million in the stock market buying high-quality stocks at a depressed price.

You don’t have to use Prudential or Reckitt either. After the stock market crash, there’s a host of cheap blue-chip companies on the market. 

These companies may produce substantial total returns for investors in the years ahead as the economic recovery gets underway. By focusing on these high-quality blue-chips with low levels of debt, investors may be able to build a significant financial nest egg. 

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US $12.3 TRILLION out of thin air…

And if you click here, we’ll show you something that could be key to unlocking 5G’s full potential...

It’s just ONE innovation from a little-known US company that has quietly spent years preparing for this exact moment…

But you need to get in before the crowd catches onto this ‘sleeping giant’.

Click here to learn more.

Rupert Hargreaves owns shares in Prudential. The Motley Fool UK has recommended Prudential. 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.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.