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 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 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.
Helping you to get rich
These are just some of the great stocks you can buy today at rock-bottom prices. By searching The Motley Fool’s library of special reports, you can find even more too-cheap-to-miss UK shares. They could help you make the most of the stock market crash and possibly even make a million.