Buying the best UK shares after the market crash could be a sound means of improving your prospects of making a million. After all, many stocks are currently trading at attractive prices due to an uncertain economic outlook.
Through following the advice of multi-billionaire invester Warren Buffett, you could unearth the best buying opportunities today. Over time, they may deliver improving performances that boost your portfolio’s prospects in the coming years.
Finding the best UK shares within your circle of competence
Finding the best UK shares to buy today can be challenging. It’s even more difficult to achieve this goal in industries or sectors you’re unfamiliar with. Therefore, it could be a good idea to focus your energy in areas where you’ve knowledge that can be used to assess the appeal of a specific stock, or group of companies.
For example, there may be a number of high-quality businesses trading in the banking sector at the present time. However, if you’ve little knowledge about how the sector operates, it may be much more difficult to select those companies that can deliver above-average returns in the long run.
Buffett has always sought to invest within his circle of competence. Certainly, this has caused him to miss out on some excellent opportunities that could have enhanced his considerable wealth even further. But by focusing on finding the best UK shares in sectors that you understand, you may be able to more accurately determine a stock’s risk/reward opportunity. This may be beneficial to your portfolio’s long-term outlook.
Buying the best FTSE 100 and FTSE 250 shares today
Buying the best UK shares at the present time may be a difficult task for any investor. The threat of a second market crash may cause some individuals to delay their purchases until the economic outlook is more attractive.
However, following Buffett’s advice and buying stocks when other investors are fearful could be a shrewd move. It may even enable you to access lower prices for high-quality businesses that ultimately prove to be temporary.
Although there’s a strong risk of a second downturn, the stock market’s future is always uncertain. As such, investors should never seek to make a quick return on their capital. Rather, they should follow Buffett’s lead and buy for the long term.
With the stock market having recorded a high single digit annual return since its inception, investing £500 per month could return a £1m portfolio within 35 years at an annualised growth rate of 8%. However, through buying the best UK shares now in sectors you understand, you could improve on that return.
That could see you generate a £1m+ portfolio at a faster pace as the world economy and the stock market recover from a disappointing 2020.