Since hitting a nine-year low in March, the FTSE 100 has risen 24% in tandem with other global indices. The strong recovery of the index has prompted fears over a second major sell-off, but many shares are still trading far below average historic valuations. What’s more, there are plenty of quality stocks that I’d be happy to buy and hold at today’s prices. As such, choosing the best UK shares on the market today could massively boost your chances of making a million.
The best UK shares on the market Focusing on growth stocks is the best way to realise serious long-term gains, in my view. Companies whose shares have strong upside potential could deliver immense capital growth and significantly swell the size of your investment portfolio over time. Key characteristics to look out for in a good growth stock include strong historical earnings growth, a good return on equity and promising forward earnings growth.
Companies such as Homeserve (LON:HSV), Just Eat (LON:JE) and Games Workshop immediately spring to my mind. Each has a track record of earnings growth over recent years and doesn’t look to be slowing down any time soon. On top of this, all three have had a relatively profitable period in the midst of the global pandemic. Albeit not a guarantee of future success, it’s certainly testament to the resilience of the underlying businesses.
You won’t need me to tell you that the last few months have been a rough time for income investors. Dividends have been slashed left, right and centre. In fact, around half of the companies listed in the FTSE 100 have either cut or suspended payouts. Nevertheless, I’d still invest in the best UK shares that boast bulky yields to build serious wealth over time. Why? Well, it’s important to remember that dividends won’t stay suspended forever and as the economy continues to recover, they could be back sooner than many expect.
In my eyes, some of the best UK dividend shares include the oil titans Royal Dutch Shell (LON:RDSa) and BP (LON:BP). Despite being hammered by the coronavirus pandemic and the oil price war, I think the shares have huge recovery potential. Considering long-term opportunities in renewable energy, I reckon both are here to stay. Alternatively, pharmaceutical company GlaxoSmithKline, whose yield currently stands at 4.9%, could be a safer long-term play.
Make a million from the stock market crash Once you’ve invested in a handful of the best UK shares available on the market, the next part is easy. Hold for the long term. Doing so will allow you to ride out any temporary market downswings and ultimately, greatly increase your chances of making a million through compounding returns.
To illustrate, let’s say you invested £500 a month into a diversified selection of top UK shares. Assuming an annual return of 9%, you’d have a portfolio worth £1,031,550m after 32 years.
Ultimately, buying the best UK shares and holding them for the long term is a tried and tested method of building serious capital. It could even lead to you achieving a seven-figure portfolio. So what are you waiting for?
The post I think these are the best UK shares that could help you make a million from the stock market crash appeared first on The Motley Fool UK.
Matthew Dumigan owns shares in Royal Dutch Shell. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK has recommended Homeserve and Just Eat Takeaway.com N.V. 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.
Motley Fool UK 2020
First published on The Motley Fool
