Markets might be rallying right now. The FTSE 250 for instance is up 12% for the month so far as April draws to a close. And at current levels Britain’s second-tier share index is at its loftiest for more than six weeks, approaching 17,000 points.
But now’s not the time to go hell for leather with your investment cash. There’s immense danger that buying activity has become far too frothy. Market makers are cheering a gradual unwinding of quarantine measures across North America and Europe. Any sign of a subsequent rise in infection rates could see share owners stampede for the exits again, however.
In this environment it pays to remain invested in gold. If financial markets go to hell in a handcart again the safe-haven metal will surely sweep to fresh multi-year peaks. I wouldn’t buy into the physical metal or a financial instrument like an exchange-traded product to get exposure, though. I’d be happier to buy shares in Centamin (LSE: CEY) using my ISA.
This is because the African gold digger is massively cheap when you consider its profits outlook. It trades on an undemanding price-to-earnings (or P/E) multiple of below 15 times for 2020. Centamin boasts a meaty 4.5% dividend yield, too, making it a haven for income chasers amid a sea of payout cuts.
Another FTSE 250 hero
I’d also happily snap up shares in B&M European Value Retail (LSE: BME) in an ISA for May. This particular FTSE 250 share has shuttered clusters of its smaller stores in response to the countrywide lockdown. A likely easing of restrictions on the high street, in shopping centres, and in retail parks would allow the retailer to start earning from these sites again.
Don’t be mistaken by thinking that B&M is only a decent short-term buy, though. Its undemanding forward P/E ratio around 16 times leaving plenty of scope for more share price gains. In an environment of mass job losses, low consumer confidence, and stagnating wage growth in the months and years following the coronavirus outbreak, retailers that trade at lower price points like this are likely to come into their own. This is what we saw in the aftermath of the 2008–09 banking crisis.
A stress-free dividend stock
ContourGlobal (LSE: GLO) is another FTSE 250 star I reckon’s too good to miss for May. Why? Well at current prices it carries a whopping 8% dividend yield for 2020 (a corresponding P/E ratio of 17 times isn’t quite as compelling, though…).
Investors can buy oodles of peace of mind when they buy shares in ContourGlobal. It doesn’t matter whether newsflow surrounding the coronavirus and its economic implications deteriorate further down the line. The essential nature of the power plant operator’s services mean that profits should keep chugging higher regardless. A reassuring trading update in mid-March illustrated just how bulletproof its operations are in these tough times.