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UK shares: I’m thinking like Warren Buffett to play the new bull market

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Private investor buying UK shares at home
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Investors aren’t exactly champing at the bit to load up on UK shares, broadly speaking. The FTSE 100 has been on a gentle upward slope in recent months, but making significant gains has proved heavy weather. The emergence of Covid-19 variants in parts of the world, and growing fears over rampant inflation in particular, are putting a lid on market enthusiasm.

Could all that be about to change though? Economic data so far in 2021 has, on the whole, been quite impressive. And this is prompting economic experts to steadily increase their growth estimates. I wouldn’t be surprised to see a new bull market for UK shares kick off before too long.

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Growth forecasts rise

The World Bank was the latest body to ramp up its GDP estimates this week. It now expects the global economy to expand 5.4% in 2021, up sharply from the 4.1% rise it had forecasted at the beginning of the year.

This would represent the fastest rate of growth for 80 years, the World Bank said. The body improved its estimates because of rapid vaccination rollouts in certain regions.

However, the dial hasn’t changed much for many UK shares following the World Bank’s update. The organisation said that the recovery is likely to be “uneven” as emerging market countries lag the rebound that major economies, such as the US and China, will likely enjoy.

close-up photo of investor Warren Buffett

Thinking like Warren Buffett and buying UK shares

The fight against Covid-19 is far from won and there could be more twists and turns for the global economy. But that hasn’t stopped me from buying UK shares for the new bull market. In fact, I started buying just after the 2020 stock market crash in anticipation of the eventual recovery.

This enabled me to pick up some top-quality stocks at rock-bottom prices. The sort of stocks with strong balance sheets and/or recession (or pandemic) proof operations. Those that’ll have the strength to survive a prolonged downturn in the global economy. And those which will likely soar in value as economic conditions pick up, profits improve and market confidence comes flooding back.

My investing strategy involves buying stocks with a view to holding them for the long term, say a decade or more. This means I won’t be tearing my hair out if we have to wait a little longer for a strong economic recovery to take hold. I’m convinced that GDP growth will spike and that I’ll be positioned well to profit following my recent UK share buys.

As investment guru Warren Buffett famously commented: “In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”

This should provide stock investors like me with a lot to be excited about.

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Royston Wild has no position in any of the shares mentioned. 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.

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