The terrible situation in Ukraine is creating economic uncertainty. And that’s driving stock prices lower. But billionaire investor Warren Buffett reckons the long-term investor who is focused on compounding should keep going. And that’s particularly true if we’re not buying stocks with borrowed money and if we have no immediate need for the money we’ve invested.
So I’m hunting for UK shares to buy now.
A good long-term record
Buffett often points to the long-term performance of America’s S&P 500 index. And he reckons the index has delivered returns annualised at around 10% since the 1960s. Indeed, the stock market in general has a good record and has beaten the returns delivered by most other major classes of asset.
However, Buffett has often warned us that corrections are inevitable in the stock market. And we should learn to hold stocks without becoming “panic-stricken” even if they decline by as much as 50%.
But setbacks and corrections can also deliver opportunities to buy stocks when they represent better value. So with that in mind, here are 10 shares at the top of my watch list. And I’d like to buy them sometime during the current market correction. However, I’ll only do so if the underlying businesses satisfy my criteria after thorough research. And if the valuation makes sense of a long-term investment.
My choices tend to favour businesses with defensive and less cyclical operations. And that’s because they tend to have more chance of maintaining consistent incoming cash flow whatever the prevailing macroeconomic climate.
Stocks I like now
Unilever is a fast-moving consumer goods company with a market capitalisation near £88bn. It’s a huge business operating in the areas of beauty, personal care, home care, foods and refreshment.
Diageo also operates in fast-moving consumer goods with its branded and popular alcoholic drinks business. The company’s market capitalisation is around £80bn. It’s another monster!
In the healthcare space, I like the look of GlaxoSmithKline. The Company researches and develops products in the areas of pharmaceuticals, vaccines and consumer healthcare. And the market capitalisation is around £79bn.
Also, in healthcare, I’m targeting the medical technology company, Smith & Nephew. Its market capitalisation is just below £11bn.
I’m keen on Tate & Lyle too because the business operates in the wider food sector, which I see as defensive. The firm provides ingredients and solutions for the food, beverage and industrial markets. And the market capitalisation is just above £3bn.
And paper-based packaging provider Smurfit Kappa supplies the fast-moving consumer goods sector. The company has a market capitalisation of just over £8bn.
In the area of information technology and analytics, I’m keen on Relx with its market-cap near £41bn and Experian with a capitalisation just below £27bn.
And my final two choices are smoking products maker British American Tobacco with its market-cap of just over £69bn and soft drinks maker Britvic at just over £2bn.
These stocks aren’t guaranteed to perform well just because I like them now. And it’s worth repeating I wouldn’t buy any shares without first undertaking thorough research into the underlying business. Nevertheless, I see my watch list as a good starting point for further research. And I believe the balance of risks versus potential rewards favours hunting for stock opportunities now.