Why I’m investing £500 a month in a spread of the best shares to buy now

I hope to fund my retirement by investing £500 a month in the best shares to buy on the UK market, plus a sprinkling of tracker funds.

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The recent share price rally underlines the benefits of hunting around to find the best shares to buy during a stock market crash. If you can pick up top UK companies at reduced prices when markets are down, you will benefit when they recover.

When the FTSE 100 plunged below 5,000 in March last year, we at the Fool urged investors to buy the best stocks for their portfolios. That’s what we do, every time markets crash.

Why? Because we think that the best time to buy top UK shares is when they are trading at discounted prices. A stock market crash is like a sale in the shops, an opportunity to pick up top assets at a reduced price. 

The FTSE 100 is fighting back

Today, the FTSE 100 is bobbing around the 7,000 mark. It is up 40% since last year’s lows. Once again, looking for the best shares to buy in a crash looks a winning strategy.

It isn’t easy to do, though. You need a strong nerve, to buy when others are selling. Especially during last year’s unprecedented Covid-19 meltdown. Nobody knew how that would end. If the US Federal Reserve hadn’t rushed to the rescue, the FTSE 100 could have fallen a lot further, and taken a lot longer to recover.

Also, it is incredibly hard to time the bottom of the market. Most investors were ducking for cover last March and didn’t emerge until the recovery had bedded in. It happens every time.

I’m searching for the best shares to buy 

This is why I prefer to invest a regular monthly sum of £500 instead. That way, I don’t need to worry about market timing. Sometimes I will invest when share prices are expensive, at other times when they are cheap. Over the years, it should average out. But it doesn’t involve the stress of watching the market and wondering what to do next.

The simplest option is to invest in a spread of stocks with a low-cost FTSE 100 tracker. Personally, I would back this up by taking out a FTSE 250 tracker as well. The UK index of medium-sized companies has had a blistering millennium. Since 31 December 1999, it has delivered a total return of 524%, and still boasts some of the best shares to buy today. So don’t just stick to the blue chips.

When looking for the best shares to buy, I would start with some of the more solid blue chips, such as spirits giant Diageo, pharmaceutical firm GlaxoSmithKline, and global miner Rio Tinto, and maybe a financial stock such as Lloyds Banking Group. Companies like these should deliver plentiful dividends and growth over the long term.

When I had the odd lump sum to spare, I would use that to buy some of the UK’s best shares, then hold for the long term.

RISK WARNING: should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice. The Motley Fool believes in building wealth through long-term investing and so we do not promote or encourage high-risk activities including day trading, CFDs, spread betting, cryptocurrencies, and forex. Where we promote an affiliate partner’s brokerage products, these are focused on the trading of readily releasable securities.

Harvey Jones 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.

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