The 2020 stock market crash might have been months ago, but investor confidence remains at rock bottom. Bargain hunters are in short supply as fears over another meltdown for UK shares dominate thinking. Neither the FTSE 100 nor the FTSE 250 have made any progress since late May.
Sitting on the fence and avoiding UK shares is the easiest option as major issues, like Covid-19 and tense US-China relations, remain far from resolved. But it’s a mistake that could end up costing you a fortune. You’re not going to make any returns on your cash by watching the world go by. Locking your money up in a low-yielding product like a Cash ISA instead offers pathetic returns that could scupper your chances of retiring rich.
Most importantly, history shows us that buying shares after a stock market crash is critical if you want to make BIG shareholder returns. Remember that market crashes are nothing new, and that those who take a long-term view of the market and continue to invest in UK shares tend to make their fortunes. They buy shares following crashes and then watch them surge in value as improving economic conditions pull their profits skywards again.
A FTSE 100 firecracker The most successful investors think about what condition their shares will be in 10, 20 years from now, perhaps longer. It’s a philosophy that’s made people like Warren Buffett extremely wealthy. And if it’s good enough for him, then it’s good enough for me.
The stock market crash has created a galaxy of great UK shares that I’d happily buy in my Stocks and Shares ISA and hold for a decade. And Coca-Cola (NYSE:KO) HBC AG (LSE: CCH) is somewhere near the top of the list.
There’s been worse UK share price falls in 2020 than the 16% one the FTSE 100 stock has endured. I reckon this provides a decent dip-buying opportunity for savvy investors though. Coke sells like no other soft drink and will continue doing so for decades to come.
Sales of the megabrand should be helped by ongoing product innovation enabling the business to latch onto fast-growing consumer trends. The soft drinks giant just launched its Coke Energy line to boost its position in the energy drinks market. And it seems like another masterstroke. Allied Market Research forecasts that demand for energy drinks will surge at a compound annual growth rate of 7.2% through to 2026, by which time it’ll be worth a colossal $86bn.
Coca-Cola is expected to see earnings clatter by a fifth in 2020. It reflects the impact of Covid-19 lockdowns on its ‘out of home’ products. But the Footsie share’s expected to roar back with a 26% earnings increase next year. And this leaves it trading on a sub-1 forward price-to-earnings growth (PEG) reading of 0.6.
More UK shares to help you get rich This sort of value is too good to miss, in my opinion. And Coca-Cola is just one of many terrific UK shares trading below value after the market crash. So do some research with the help of experts like The Motley Fool and start investing!
The post Stock market crash: I’d hold cheap UK shares like this for 10 years 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 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.
Motley Fool UK 2020