The most recent stock market crash was in March 2020. But with further Covid-19 related restrictions on the horizon, could we see another decline in UK shares this autumn?
Quite possibly. In March, Covid-19 related shutdowns threatened to knock global economies off course. A stock market panic ensued as investors became uncertain about the wider economic effects of the virus.
Now we have the threat of extended lockdown-type restrictions going into winter. For long term investors, a crisis can be a good opportunity to invest in quality UK shares for retirement. Some may even be able to get rich and retire early by doing so.
Quality UK shares
If the stock market weakens further this autumn, I’d buy shares in Boohoo (LSE: BOO). This online clothes retailer is popular with the youth market for producing on-trend fast fashion at low prices. It’s based fully online, which helps this Manchester-based company to produce a decent profit margin.
Boohoo has grown its business consistently over the years and continues to gain market share in the markets that it operates in. It recently faced some controversy around its supply chain, which caused share-price weakness over the summer. But for investors, the impact was short-lived.
Boohoo’s share price is up almost a whopping 900% over the past five years. As a well-run and growing company, any further stock market crash could be a good opportunity to buy these quality UK shares at lower prices.
Is it too early to invest in travel shares?
Another candidate among battered UK shares that I would like to buy in a stock market crash is Jet2 (LSE:JET2), formally known as Dart Group. It might seem risky looking at a travel company in the current climate. Fewer holidays are taking place and disruption around Covid-19 related restrictions is ongoing. However, as a long-term investor, it’s sometimes possible to find cheap UK shares in a crisis.
Jet2 operates package holidays to several European destinations. It changed its name from Dart Group to reflect its focus on growing its leisure travel business.
Although in the near term, the Jet2 share price could experience further turbulence, UK investors should look past the upcoming months. There will come a time when travel restrictions are eased and confidence returns. Jet2 looks well placed to capitalise on future growing demand.
Put the kettle on
One share that I would like to add to my long-term portfolio is Strix (LSE: KETL), the world’s number one manufacturer of kettle safety controls. Strix is more of a defensive investment option, in my opinion. It has been around for many decades and has created a stable and competent business.
Almost 90% of its revenue is in kettle controls, where it holds a dominant position. In addition to its well-established business areas, Strix offers an ability to grow. It’s on track to deliver 14 new products this year. It’s also on track for new manufacturing operations in China to become operational by August 2021.
All of these factors give me confidence that Strix will become a larger business over the coming years. It’s cash flow-generative, has a strong return on capital of nearly 60%, and has a dividend yield of over 3%. Overall, I would love to buy these UK shares if we see another stock market crash.
Harshil Patel owns shares in boohoo group. The Motley Fool UK has recommended boohoo 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.