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Got £2k to invest? Here’s how I’d build a Brexit and pandemic-proof stocks portfolio

2020 has seen many new investors getting involved in the stock market. The rise of online retail stock trading platforms has helped fuel this. It’s now incredibly easy to open an account, buy shares and build a stocks portfolio with a relatively small amount of money.

Investing in multiple stocks across different sectors can give you a much better chance of being profitable in the long run, even with the risky events we’re currently going through. If you’re worried about Brexit and the continued impact of the pandemic, then I’ve some for investing in your stocks portfolio that could be very helpful.

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Brexit building blocks

Firstly, how can we build or tweak our stocks portfolios to protect against a no-deal Brexit? There isn’t a magic solution that will stop the FTSE 100 or FTSE 250 from falling if we do see a no-deal scenario. At the same time, we can try and limit the damage. The firms likely to see the largest share price falls are the ones with heavy domestic exposure. Think about retailer WH Smith, or builders merchant Travis Perkins

Reducing your exposure to such firms helps you to protect your portfolio from the worst-case scenario. It also allows you to be flexible in order to pick up some bargains should we see share prices falling. Lloyds Banking Group is a good example here. The outlook in the short term doesn’t look particularly rosy. With the bank also having a mostly domestic client base, the Brexit outcome could affect the share price significantly. Therefore, I’m waiting on the sidelines with my powder dry to possibly buy the stock on another dip. I wrote about this in more detail here.

Pandemic-proofing

The other risk investors are trying to navigate when building a stocks portfolio at the moment is the pandemic. Again, this is a tough one to deal with as it has negatively impacted a lot of sectors. If anyone was unsure of the impact it could have on a company and its share price, the stock market crash showed it clearly. Cruise operator Carnival, cinema owner Cineworld and airline easyJet are warning examples for investors.

To pandemic-proof here, I’d be buying defensive stocks that have weathered the storm well. These include online supermarket Ocado. We’ve had half-year reports from most firms and so you can see which ones are performing well, even with the pandemic. For investors happy to take on more risk, the pandemic can be an opportunity to buy some of the stocks mentioned above at a steep long-term discount. Although this doesn’t protect a portfolio from another wave of the virus, it does protect you from missing the boat if these stocks rally hard in the years to come.

A £2k stock portfolio

The above pointers work well if you have £2,000 to invest in a stock portfolio. By picking half a dozen stocks to build a portfolio with, you’ve got enough to generate some good returns. Not only that, but you should be able to preserve the value of your funds by being selective on your investments when considering Brexit and the pandemic.

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jonathansmith1 owns shares in Lloyds Banking Group. The Motley Fool UK has recommended Carnival and 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.

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