There’s clearly a lot for UK share investors to consider for 2021. The emergence of a second strain of Covid-19 is somewhere near the top of the list. It’s prompting a spike in infection rates and governments are scrambling to limit travel to keep a lid on things.
On top of this, the threat of Brexit disruption from January 1 casts a pall over the outlook for the UK economy in the long term and beyond. Then you’ve got signs that major economic powerhouses from North America to Asia, Europe to Australia are prepared to engage in fresh rounds of trade wars in 2021. Remember that these two issues were damaging global economic growth — and by extension, UK share prices — long before the Covid-19 crisis came into view.
These problems aren’t causing me to run for the hills though. I believe that UK share markets will continue to generate terrific returns for long-term investors like me. There are several reasons why I think global stock markets will rocket again like they did following the 2008 banking crisis. And those who invest in stocks at today’s low prices can seriously supercharge the profits they make over the next decade.
2 UK shares to buy in 2021
The FTSE 100 rose 105% in value between 2009 and 2018. The FTSE 250, meanwhile, more than trebled over the same period. There are many top-quality UK shares I think could enjoy similarly mighty ascents during the 2020s. Here are two that I’d happily buy for my own Stocks and Shares ISA.
#1: Vistry Group
Things could get a tad tricky for housebuilders like Vistry Group (LSE: VTY) in 2021. The stamp duty holiday that has underpinned stunning house price growth in recent months is currently scheduled to be pulled in March. The prospect of rising unemployment next year also weighs on the demand outlook.
However, these issues wouldn’t put me off. Three significant factors should keep homebuyer interest well on the boil during the 2020s — low interest rates; massive government support through Help to Buy; and a colossal shortage of new homes.
These issues helped Vistry’s share price soar more than 250% in the 10 years to 2020. And it’ll soar again during this new decade too, I believe. This UK share trades on a rock-bottom price-to-earnings (P/E) ratio of 8 times for 2021. The housebuilder sports a monster 4.2% dividend yield too. This is one top buy for the new decade.
#2: Clipper Logistics
I believe Clipper Logistics is another great way to get rich with bricks and mortar in the 2020s. I’ve even put my money where my mouth is and bought this UK share in my own ISA. This company provides logistics spaces and services to major blue-chip companies like ASOS, L’Oréal and Morrisons. It’s in the right place to fully exploit the e-commerce explosion.
This UK share also provides terrific value on paper. It carries a forward price-to-earnings growth (PEG) ratio of 0.6 for this fiscal year (to April 2021). The Clipper Logistics share price has soared 625% during the past 10 years. And I think it’s just getting started.
Royston Wild owns shares in Clipper Logistics. The Motley Fool UK has recommended ASOS and Clipper Logistics. 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.