Our view here at The Motley Fool is clear. Stock market crashes like the one of early 2020 provide a blistering investment opportunity to get rich from UK shares. They allow you and I to buy shares from the FTSE 100 (or indeed other indices) and watch them rocket in value as economic conditions steadily improve.
The timing of any economic recovery is hard to predict right now. The final bill related to Covid-19 remains impossible to estimate as infection rates spike again. Rising tensions between the US and critical trade partners across the globe have also muddied the economic outlook.
Still, time and again the global economy has fought back from significant social, geopolitical and macroeconomic challenges. And over the long term, the value of UK shares has steadily risen as profits have recovered from temporary setbacks.
2 FTSE 100 stocks that I’d buy in an ISA
There are several top FTSE 100 stocks I’m thinking of buying after the 2020 stock market crash. Give me a few minutes to talk about two of the brilliant blue-chips on my watchlist:
- At current prices, BAE Systems looks too good to be true. It trades on a forward price-to-earnings (P/E) ratio of 12 times and sports a mighty 4.6% dividend yield, too. It’s true that the economic consequences of Covid-19 will damage government spending in a number of key areas. But I don’t expect arms spending in the West to be damaged in the near term or beyond. Instead, it’s likely that demand for defence giant BAE Systems’ products will keep rising as global tensions rise and the fight against terrorism rolls on.
- I also expect profits at Polymetal International to keep on rising. In fact, I expect this UK share’s bottom line to rocket in the 2020s as ultra-loose monetary policy drives demand for hard currencies like gold. This FTSE 100 mining giant trades on a forward P/E ratio of 13 times while it boasts a chunky 4.4% dividend yield too. I think it’s also too cheap to miss.
UK shares can help you get filthy rich!
History shows us that you don’t have to spend a fortune to get rich from UK shares. Even investing just £5,000 in the FTSE 100 shares above without making any extra contributions could create a handsome nest egg for you to retire on.
Investors in UK shares who buy and then hold for the long term (say 10 years or more) tend to make an average annual return of between 8% and 10%. So that £5,000 invested in good British stocks could make you and I between £109,000 and £226,000 over the space of 40 years.
And investing in the wake of a stock market crash can maximise your chances of hitting the higher echelons of that range. You may even exceed it as improving economic conditions sweeps the value of your investments higher. And there are many great investment guides from experts like The Motley Fool to help you get rich from UK shares.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.