Investor demand for UK shares isn’t sinking during the traditionally quiet summer months. But prices aren’t exactly ripping higher either as concerns over the Covid-19 crisis, allied with fears of extreme central bank policy tightening, weigh on stock picker’s minds.
I haven’t stopped buying UK shares for my Stocks and Shares ISA however. This is because I buy shares which I think will deliver meaty returns over a minimum 10-year time horizon.
I’m not too worried if the economic recovery suffers a setback or two before powering ahead. I can afford to patient and content in the knowledge that the recovery will come at some point. History shows us that the world economy always recovers strongly from moments of crisis.
Thinking like Warren Buffett
As investment guru Warren Buffett once commented: “In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”
There have been various crises during the 21st century too, from terrorist attacks in the US and subsequent wars in the Middle East; a meltdown of the global banking system; and a sovereign debt crisis in Europe. Yet the FTSE 100 still sailed through these catastrophes to hit record peaks of 7,877 points in May 2018.
2 of the best UK stocks to buy
I expect UK share prices to rise strongly during the post-coronavirus economic recovery too. And I’d buy these top stocks in my ISA to try and make decent money in the process.
1) Trifast manufactures screws, bolts and others fastenings for a variety of industries. From cars and computers to windows and fridge freezers, the company’s products can be found holdings things together all over the planet.
It therefore stands to gain plenty as consumer spending recovers strongly during the upcoming economic recovery. It’s worth noting though that Trifast provides lots of product for the global car industry. Therefore, it could take a significant hit if the semiconductor shortage that’s harming auto manufacturing persists.
2) Aviva is another UK stock I’d buy for the rebound. In years gone by, spending on life insurance has improved strongly during the early stages of economic recoveries. And this particular business has the brand power to make the most of this opportunity.
I also like the steps the FTSE 100 firm has made to focus on its core UK, Irish and Canadian business. The subsequent sale of other foreign operations has boosted the balance sheet and strengthened its ability to keep paying above-average dividends (the current Aviva share price of 390p creates a huge 5.8% yield for 2021).
It’s also allowed Aviva to better focus and build on its leading position in those core markets. I’d buy the FTSE 100 stock despite the huge competitive pressures that could dent future earnings growth.