I can understand why many investors remain reluctant to buy UK shares after the recent stock market crash.
The coronavirus crisis is far from over. In fact infection rates are rising rapidly again, leading to fresh lockdowns in many countries and travel restrictions being reimposed. The World Health Organisation has even said that Covid-19 could take two years to beat. It’s quite possible that UK share prices could remain depressed for some time. Even another stock market crash can’t be ruled out.
While I understand investor fears, they’re not discouraging me from investing. I continue to believe that buying UK shares will make me a lot of money. And I have the weight of history to back me up. The huge number of Britons who made a million or more by investing in something like a Stocks and Shares ISA during the 2010s is perfect evidence of this. A great many of these people bought UK shares during the depths of the 2008–09 banking crisis and watched them rebound in value as the global economy recovered, corporate profits bounced back, and confidence came flooding back into financial markets.
Learning from past stock market crashes
Sure, there are plenty of challenges facing the global economy in the short-to-medium term. Aside from Covid-19, UK share investors also have to consider the impact of escalating trade wars, Brexit, rising civil unrest in the US, and massive political uncertainty in Washington.
But remember that investors faced a daunting mix of macroeconomic and geopolitical problems following the 2008–09 stock market crash, too. The banking system appeared on the verge of collapse; Europe faced a sovereign debt crisis that threatened to tear down the eurozone; and hopes of strong economic growth were choked off in the West by massive austerity programmes. Yet those who were brave enough to invest in UK shares just over a decade ago made a fortune in the subsequent years as stock markets surged.
Buying UK shares to make a million
Stock market crashes are shocking and uncomfortable events. But if you’ve built a balanced and diversified portfolio of quality UK shares you can be confident that the value of your investments will come roaring back. Studies show that long-term investors tend to make an average annual return of between 8% and 10%. The key is to remain patient and not be tempted to panic sell when everyone else is losing their heads.
In fact, if you want to make truly gigantic shareholder returns you should swim against the tide and buy UK shares in the wake of market crashes. I’ve bought UK shares in 2020 in the hope of following their route to big riches. And I think you should too. With the help of The Motley Fool’s epic library of exclusive reports you can significantly boost your chances of making a million with UK shares, too. So do some research and get investing today.
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.