Do you want to make million? It’s a simple question. And it’s one that’s not that far fetched either. The growing number of ISA millionaires who are getting very wealthy on the back of UK shares proves this without dispute.
History shows that you don’t have to spend a fortune trying to break into the millionaire’s club. Someone who invests £500 per month in UK shares and reinvests their dividends can have broken the £1m barrier within 30 years, data shows. That’s based on the proven average annual rate of return of 8% to 10% that long-term investors tend to make.
The 2020 stock market crash has illustrated the short-term risks that share investors face. However, those rates of return I mentioned above show that individuals who buy UK shares and hold them for 10 years or more tend to make excellent returns. Over this kind of time horizon, share investors tend to see the value of their investments sweep higher from their post-crash lows as economic conditions improve and corporate profits rise.
2 sold-off UK shares I’d buy today Those brave enough to buy following a stock market crash can boost their chances of making a million too. The 2020 crash has seen scores of quality UK shares sold off along with some genuine dogs. This means you and I can buy them at dirt-cheap prices and sell eventually at a huge mark-up once the economy recovers and market confidence returns.
I’ve gone bargain hunting following the recent stock market crash. And I reckon you should too. Give me a few minutes to discuss two more brilliant UK shares that are on my watchlist today:
- Prudential (LON:PRU) shares have lost a fifth of their value since the start of 2020. This leaves the firm trading on a rock-bottom price-to-earnings (P/E) ratio of 10 times and provides an attractive level for long-term investors to buy in at. I myself bought the FTSE 100 insurance colossus because of its stratospheric sales growth in Asia. And I’m tempted to buy more at current prices. I’m tipping revenues here to explode following some near-term slowdown as rising wealth levels in its far-flung territories drive demand for financial products.
- I’d use a 7% share price decline at GB Group in 2020 as an opportunity to buy too. A forward P/E ratio of 55 times clearly doesn’t look that cheap on paper. But I think this UK share’s worth it given the rate at which e-commerce activity in Britain is rocketing. This company allows retailers to verify the location and identity of their customers to aid delivery and prevent fraud. Its services are thus critical in a fast-growing market, a likely precursor for rocketing profits over the long term.
The post Stock market crash: 2 of the best UK shares I’d buy in an ISA to make a million appeared first on The Motley Fool UK.
Royston Wild owns shares of Prudential. The Motley Fool UK has recommended Prudential. 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