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The best shares to buy now for a post-lockdown world

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We have the vaccine rollout going well, and people rushing to travel agents to book holidays. And there’s a new Stocks and Shares ISA allowance coming in April. I’m planning my 2021-22 investing today, and trying to decide which are the best shares to buy now for me.

I’m looking at an investing horizon of at least 10 years. I mostly like dividend-paying shares, but I’m happy to take profits whichever way they come. And for a possible mix of income and growth, my eyes are on the housebuilding sector again.

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Long-term demand?

I own Persimmon, which crashed in the pandemic. It’s rebounded, but I’m still on a 20% loss since mid-February 2020 when the downturn started. Persimmon is down only 4% over the past 12 months, but that’s starting after the first weeks of the market crash, and I don’t think it’s particularly meaningful. Taylor Wimpey has done worse, down 27% since the crash started, and Barratt Developments shares have fallen 20%. Home buying has been largely curtailed, so no surprise there. But are these among the best shares to buy now, in the hope of further recovery?

There’s surely a risk that we might not see 2019 sales levels again for some years yet. And Brexit can’t be helping on that score. That could cause a knock-on effect for these companies’ finances, and make the medium-term outlook for dividends look bleaker.

On the plus side, we still face a chronic housing shortage in the UK. And when all the short-term ups and downs even out, there will always be demand for places to live. So should I top up while the sector is still depressed? I’m undecided.

The battered financial sector

I think I face an even tougher decision in another of my favourite sectors, finance. Are any of the best shares to buy now lurking in that sector?

Never mind the banks, I’m specifically thinking of insurance, a business I’ve liked for many years. It can be volatile, and I would not put any medium-term cash into it. But for the long term, I hold Aviva, and I enjoyed a number of years of decent dividends before the pandemic.

Despite a decent recovery from an early slump, Aviva is still down 10% since Covid. That’s pretty much bang in line with the FTSE 100, but with a lot more volatility. Do I want to buy more insurance shares now, in the hope of superior long-term dividend income against the risk of volatility? Or should I seek better diversification?

Best shares to buy now?

Speaking of diversification, I tend to concentrate mostly on FTSE 100 shares. Is that too closely focused? Should I spend more time searching the FTSE 250 too? The smaller index typically provides better growth share possibilities, but with greater risk and volatility.

I only have to look at how the two indices handled the Covid crisis. The FTSE 250 crashed harder than the FTSE 100. But it has come back stronger, now down just 2.5% since just before the crunch. Its bigger sibling has lost 12.5% in the same time. And if we look back over five years, we see the FTSE 100 up 7%, and the FTSE 250 up 25%.

Does any of this tell me which are the best shares to buy now? Well, it’s helping shape my thoughts as we slowly emerge from the Covid disaster.

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Alan Oscroft owns shares of Aviva and Persimmon. 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.