Good news surrounding a possible Covid-19 vaccine has supercharged demand for UK shares in recent days. Trading activity has been so strong that FTSE 100 financial services giant Hargreaves Lansdown was among a number of firms whose websites buckled as traffic soared.
It’s possible that stock markets could crash again should further data from Pfizer’s vaccine contender disappoint. Equally, positive news on the testing front could spur a fresh rally in UK share prices. It really is too early to make a call either way.
2 UK shares on my radar
None of this matters to me. As a long-term share investor, I buy UK shares on the basis of where I think they’ll be 10-or-more years from now. I’m not concerned by whether or not they’ll rise or fall in value in the next few days, months, even years. Building a stocks portfolio based on how you think your equities will perform in the near term is a recipe for disaster.
I’ve continued to buy UK shares in 2020 as a result. Not even the prospect of a prolonged economic downturn has deterred me. I’ve bought shares with strong balance sheets to help them survive a long slump in the global economy.
I’ve also sought exposure to companies with exposure to industries that will grow in the next few years, whatever happens to the global economy. I bought Clipper Logistics, for example, because of its exposure to the ballooning e-commerce industry.
And there are plenty of other top-quality UK shares I’d buy for 2021, irrespective of a breakthrough with a Covid-19 vaccine. I’d buy wind farm operator Greencoat Renewables as the rush towards green energy accelerates. According to the International Energy Agency, renewables accounted for a whopping 90% of new energy capacity in 2020.
I’ve also got my eye on Keywords Studios stock for next year and beyond. The video games industry is the fastest growing segment of the home entertainment industry. And this UK share, which provides an array of services to games developers, is a great way to play this theme. Industry giant Take-Two Interactive Software’s proposed buyout of London-listed Codemasters Group this week illustrates the huge growth potential of the gaming market.
No savings at 40? No problem
There’s an abundance of top-quality UK shares like these that can help stock investors build a handsome nest egg for retirement. Indeed, the rates of return that long-term investors tend to enjoy means that even middle-aged people with no savings or investments at all can still retire in comfort.
History shows us that these long-term investors usually make an average yearly return of at least 8%. This means that a 40-year-old who begins to invest £450 a month in UK shares can expect to have made a minimum of £447,000 by the time the State Pension age is reached at 66. There are plenty of top growth stocks like Keywords Studios that could deliver even better returns than this over the next decade too.
Royston Wild owns shares of Clipper Logistics. The Motley Fool UK owns shares of and has recommended Take-Two Interactive. The Motley Fool UK has recommended Clipper Logistics, Hargreaves Lansdown, and Keywords Studios. 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.