The 2020 stock market crash provides a great opportunity for share investors to get rich. Using market crashes as an opportunity to buy rather than run for cover can mean the difference between making a fortune and only making middling returns. Those that dare to buy UK shares following a crash can ride the inevitable stock market boom that accompanies an improving economy.
It’s impossible to pinpoint when exactly UK share prices will rise again as Covid-19 weighs on investor appetite. But history shows us that the most successful investors (like ISA millionaires) boost their long-term returns by buying low following a stock market crash and eventually selling at a much higher price.
Long-term investors tend to make an average annual return of between 8% and 10%, studies show. Buying cheap UK shares in the wake of a stock market crash can boost your chances of hitting the higher echelons of that range. Or possibly even surpass it.
3 of the best bargain UK shares I myself plan to keep loading my Stocks & Shares ISA with top-quality UK shares. And these particular companies are near the top of my watchlist. I think they’re too cheap to miss following the market crash.
- You might not want to touch travel stocks like easyJet (LON:EZJ) with a bargepole right now. This one is trading at a third of its pre-crash value as the Covid-19 crisis has smashed air travel. The recovery for the airlines could be bumpy but I think this FTSE 100 flyer could soar in value as the industry slowly returns to normal. The long-term outlook for the low-cost segment remains robust, and the upcoming recession could help lift demand for easyJet’s cheap tickets. A rise in the number of rival airlines going bust should give profits an extra boost too.
- Greencoat UK Wind offers plenty of all-round value for buyers of UK shares. As well as trading on a low price-to-earnings (P/E) ratio of 13 times, it boasts a chunky 5% dividend yield. This fund invests in wind farms across Europe and is a great way to ride the green energy boom, one of the potentially-explosive investment themes for the 2020s.
- I’d also consider buying Centamin for my ISA today. The gold digger hiked the interim dividend by 50% last week thanks to the soaring gold price. A bright outlook for bullion prices bodes well for future payout rises too. Bank of America (NYSE:BAC) now expects gold to hit $3,000 per ounce in the next 18 months. At current prices, Centamin trades on a sub-1 forward price-to-earnings growth (PEG) ratio of 0.1, a steal by anyone’s standards. And it boasts a big 4% dividend yield as well.
The post Stock market crash: 3 cheap UK shares I’d buy right now in an ISA to make a million appeared first on The Motley Fool UK.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Greencoat UK Wind. 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
