What Stocks to Buy When Market Crashes in the UK
The global stock market crash that got experienced in the past few days has become one of the most devastating among stock investors globally and in the UK.
As we have noted, the global outbreak of the Coronavirus popularly known as COVID-19 has resulted in a worldwide stock market panic rendering the market highly volatile over the past months and days.
The impact of the COVID-19 virus outbreak has been extreme, causing considerable market declines in the stock market performance. As indicated by the Dow Jones, on Thursday, March 12, the market closed down by over 2,000 points for the first time in history, showing a 7.8% decrease.
On the other hand, we have noted that the S&P 500 industry fell by 10% on Thursday, March 12, indicating the lowest stock market day for over 32 years.
We have also identified that due to the outbreak of the COVID-19 virus, the stock market has registered its highest decline since the 2008 crisis, resulting in a massive crash in oil prices.
Other markets in the European industry have also suffered the effects of the virus immensely. For instance, in London, the energy industry was exceedingly affected, resulting in the FTSE 100, falling by 7.8%.
We noticed that Italy's FTSE MIB plunged by close to 11%, following Rome's decision to quarantine thousands of individuals, due to the rise in COVID-19 deaths in the country.
Yet again, we have identified several Tech, energy, and bank companies that have been hugely affected by the market crash. For example, Chevron decreased by 15%; JP Morgan lost 13% while Apple declined by 7.8%.
Naturally, we always look out for the highly valued stock shares in the market to buy in anticipation that their value will rise further and, in return, end up making profits for us. However, when a market crash occurs, stock prices decline rapidly. The good news for us is that this might just be the right time for buying stocks in the UK.
The following are some of the best stocks we have researched and found to be highly profitable in the aftermath of a market crash and which we must invest in during a market crash:
We also found that the retailer's net profits have increased by the same ratio, amounting to an increment of about 500%. Additionally, it's noteworthy that the company's growth has remained steady, indicating yearly revenues and profits increment by a minimum of 30% for the past four years in a row.
We also recommend this retailer owing to its efforts to become a multi-brand in the online retail industry through acquiring Karen Millen and Coast. The brand is keen to attract the youth population and value-inspired clients, through its vast collection of trend-inspired clothing.
We anticipate Boohoo's revenues to rise by 40% in the year 2020 despite the turmoil brought about by the COVID-19 virus. It owed to the fact that the retail company has already reached £1bn in revenues over the past ten months.
The retail company also has a net worth of more than £200m, and we have noticed its ability to raise its net assets.
We realized that the property firm's competitive edge lies in an excellent business model it has developed that does not need vast amounts of investment capital.
We found that Rightmove property firm does not need to have vast amounts of assets or inventory; it only requires to run its internet-based search portal. It boasts of a return on capital employed (ROCE) of close to 800%, which proves to be great, right?
Rightmove's recent performance results indicated that its revenue and profits increased by around 10% within the first quarter of the year while expanding its agency and new housing projects.
Additionally, we discovered that Rightmove is the best property search portal in the UK, recording more than 800m unique visitors daily over the past quarter of the year. It is yet another reason I prefer to buy its stocks when the market crashes.
We have recommended buying this company's stocks because we found that it has a net worth of more than £100m. In contrast, its return on capital employed (ROCE) was 40% indicating the company's capability to increase its revenues, profits, and assets.
We also discovered that Fevertree's international market has been on the rise. For instance, in the year 2019, the company's United States and overseas sales increased by more than 30%, indicating the potential of its global growth and expansion.
To me, this is a good reason enough to buy its stocks since, such an expansion and growth of the market, maybe our opportunity to make profits when the stock market revives again.
Other Stocks to Buy in the UK when the Market Crashes
As I said earlier, a market crash causes everything to go unexpectedly, resulting in a situation whereby everyone is keen to sells due to fear and panic.
Even so, as Warren Buffett coined it: ¨Be greedy when other people are fearful¨.
As soon as speculation takes over, it's time for me to buy shares and invest!
For me, I would as well buy shares from delivery and postage companies when the market crashes. Ask me why, because even after a market crash, life moves on, and such services are essential in people's lives, and therefore, I will be guaranteed to get returns in the long-run.
During a market crash, those companies that would be capable of funding themselves and continue with their operations to ensure their share value regains stability are the best for me to buy shares and invest in them.
In the current market, there is plenty of affordable credit with minimal interest rates. The majority of businesses get tempted to leverage this to borrow in an attempt to shield themselves against taxes and raising capital for expansion projects.
Whereas borrowed money could help a company get on its feet, businesses that over-borrow may get themselves in serious trouble if their projects fail. Debt is what companies use to repay the credit provider in-case they decide to raise a claim on a company's assets. In such a case, I would lose my investment, and I am sure I wouldn't want this.
Several companies have collapsed because of the burden of having debt on their balance sheets.
Thus, we conclude that businesses that have the right amount of cash, as well as other tangible assets, would be sure to overcome the challenges of a market crash.
We will be looking out for such companies when the market crashes and buy shares without delay.
Such businesses are capable of utilizing their cash-reserves to back up their balance sheets in the event of a market crash, facilitating them to steadily and reliably pay stock dividends to their investors. But, we, as investors, should be aware that profits aren't always guaranteed. Therefore, I buy my stocks carefully and in a manner that I lower the risks.
I Invest For Longer Periods
I follow an investment philosophy that says ¨How long you take in the market is much crucial than timing the market¨. In the stock investment industry, nobody can predict precisely when the stock market would crash or recover, so I remain vigilant and focused on long-term investment opportunities.
I use a buy-and-wait investment strategy whereby I remain invested in all market periods, assisting me in avoiding making impact reactions when the market crashes, which may tempt me to sell my stocks at the wrong time.
Additionally, when I hold my stocks for more extended periods, it helps me minimize fees that I might have otherwise incurred while transacting.
Indeed, no stock investment strategy lacks its limitations, and I am not guaranteed to get more than I invested, however, its helpful to hold on when the market crashes as this may pay off in the long-run.
It also enables me to buy shares across a wide range of prices, and therefore, in case of a market crash, my invested cash would buy me more shares and a few after recovery. It shields me from market crashes.
Also, it is not a guarantee that when I buy shares regularly, it will leave me risky-free. I can encounter the opposite and end up making a loss. However, this could help me develop stock investment principles as I will buy shares whether they are highly-priced or not.
I take into consideration how a market crash may influence me to avoid making wrong decisions and selling my stocks at low prices rather than holding on until the market recovers.
I always encourage myself that market recoveries are also inevitable and are part of stock investment. Thus, for me holding my emotions on a check and waiting for the right time can protect my investment and give good returns.
As we have noted, the global outbreak of the Coronavirus popularly known as COVID-19 has resulted in a worldwide stock market panic rendering the market highly volatile over the past months and days.
Contents
- 1 So, What Damage has the Corona-virus Caused on the Stock Market?
- 2 What are the Best Stocks to Buy When Market Crashes in the UK?
- 3 Looking Out for Steady Revenue and Profit Generation Company?
- 4 Looking Out for High-Profit Making Company?
- 5 How I Lower Risks When I Buy Stocks During A Market Crash
So, What Damage has the Corona-virus Caused on the Stock Market?
Well, before we look at the stocks to buy when the market crashes, let's look at what effect the Coronavirus has had.The impact of the COVID-19 virus outbreak has been extreme, causing considerable market declines in the stock market performance. As indicated by the Dow Jones, on Thursday, March 12, the market closed down by over 2,000 points for the first time in history, showing a 7.8% decrease.
On the other hand, we have noted that the S&P 500 industry fell by 10% on Thursday, March 12, indicating the lowest stock market day for over 32 years.
We have also identified that due to the outbreak of the COVID-19 virus, the stock market has registered its highest decline since the 2008 crisis, resulting in a massive crash in oil prices.
Other markets in the European industry have also suffered the effects of the virus immensely. For instance, in London, the energy industry was exceedingly affected, resulting in the FTSE 100, falling by 7.8%.
We noticed that Italy's FTSE MIB plunged by close to 11%, following Rome's decision to quarantine thousands of individuals, due to the rise in COVID-19 deaths in the country.
Yet again, we have identified several Tech, energy, and bank companies that have been hugely affected by the market crash. For example, Chevron decreased by 15%; JP Morgan lost 13% while Apple declined by 7.8%.
What are the Best Stocks to Buy When Market Crashes in the UK?
In this part, we share with you ideas and tips on how to buy shares when the market crashes as a long term Forex trading investment strategy that can lead to financial freedom.Naturally, we always look out for the highly valued stock shares in the market to buy in anticipation that their value will rise further and, in return, end up making profits for us. However, when a market crash occurs, stock prices decline rapidly. The good news for us is that this might just be the right time for buying stocks in the UK.
The following are some of the best stocks we have researched and found to be highly profitable in the aftermath of a market crash and which we must invest in during a market crash:
Looking Out for Steady Revenue and Profit Generation Company?
Boohoo (LSE: BOO)
The first stocks we suggest to invest in are from an internet-based clothing store. The company has had a good growth record starting with £139m in the year 2015 up to £856m in 2019.We also found that the retailer's net profits have increased by the same ratio, amounting to an increment of about 500%. Additionally, it's noteworthy that the company's growth has remained steady, indicating yearly revenues and profits increment by a minimum of 30% for the past four years in a row.
We also recommend this retailer owing to its efforts to become a multi-brand in the online retail industry through acquiring Karen Millen and Coast. The brand is keen to attract the youth population and value-inspired clients, through its vast collection of trend-inspired clothing.
We anticipate Boohoo's revenues to rise by 40% in the year 2020 despite the turmoil brought about by the COVID-19 virus. It owed to the fact that the retail company has already reached £1bn in revenues over the past ten months.
The retail company also has a net worth of more than £200m, and we have noticed its ability to raise its net assets.
Looking Out for High-Profit Making Company?
Rightmove (LSE: RMV)
Another company we can buy shares from when the market crashes are the Rightmove, which is an internet-based property firm. The property firm has steadily increased its revenues and profits, whereas retaining an up normally high net profit. To be specific, the firm's net profit has consistently remained at 60% over the past five years. Sounds good to invest in, right?We realized that the property firm's competitive edge lies in an excellent business model it has developed that does not need vast amounts of investment capital.
We found that Rightmove property firm does not need to have vast amounts of assets or inventory; it only requires to run its internet-based search portal. It boasts of a return on capital employed (ROCE) of close to 800%, which proves to be great, right?
Rightmove's recent performance results indicated that its revenue and profits increased by around 10% within the first quarter of the year while expanding its agency and new housing projects.
Additionally, we discovered that Rightmove is the best property search portal in the UK, recording more than 800m unique visitors daily over the past quarter of the year. It is yet another reason I prefer to buy its stocks when the market crashes.
Looking Out for Fast-Growing Company?
Fevertree (LSE: FEVR)
Fevertree is a company manufacturing premium drinks in the UK. The company has managed almost to triple its net profits over the last two years, realizing over £61m in earnings in the year 2018. It represents a rise of close to 60 times as compared to the previous four years.We have recommended buying this company's stocks because we found that it has a net worth of more than £100m. In contrast, its return on capital employed (ROCE) was 40% indicating the company's capability to increase its revenues, profits, and assets.
We also discovered that Fevertree's international market has been on the rise. For instance, in the year 2019, the company's United States and overseas sales increased by more than 30%, indicating the potential of its global growth and expansion.
To me, this is a good reason enough to buy its stocks since, such an expansion and growth of the market, maybe our opportunity to make profits when the stock market revives again.
Other Stocks to Buy in the UK when the Market Crashes
As I said earlier, a market crash causes everything to go unexpectedly, resulting in a situation whereby everyone is keen to sells due to fear and panic.
Even so, as Warren Buffett coined it: ¨Be greedy when other people are fearful¨.
As soon as speculation takes over, it's time for me to buy shares and invest!
Do we Go for Resilient Companies?
I would buy my stocks from a company I am convinced is capable of overcoming the bear markets challenges. If I buy my stocks from a company like Unilever, I am sure that it will still be operative even after the market crash subsides. I bet, even now, you might be using Unilever items without your knowledge. Would you say stop purchasing items like soap when the economy collapses? I am sure not!For me, I would as well buy shares from delivery and postage companies when the market crashes. Ask me why, because even after a market crash, life moves on, and such services are essential in people's lives, and therefore, I will be guaranteed to get returns in the long-run.
Do we Go for Self-Reliant Companies?
Of course! We should not focus on buying stocks from companies that depend on borrowings now and then to finance their projects like these would massively struggle when the market crashes and could collapse and result in shares losing valued extremely.During a market crash, those companies that would be capable of funding themselves and continue with their operations to ensure their share value regains stability are the best for me to buy shares and invest in them.
Do we Go for Companies that Have Excellent Balance Sheets?
Yes, I ensure the companies I buy my stocks from during a market crash have a strong balance sheet record.In the current market, there is plenty of affordable credit with minimal interest rates. The majority of businesses get tempted to leverage this to borrow in an attempt to shield themselves against taxes and raising capital for expansion projects.
Whereas borrowed money could help a company get on its feet, businesses that over-borrow may get themselves in serious trouble if their projects fail. Debt is what companies use to repay the credit provider in-case they decide to raise a claim on a company's assets. In such a case, I would lose my investment, and I am sure I wouldn't want this.
Several companies have collapsed because of the burden of having debt on their balance sheets.
Thus, we conclude that businesses that have the right amount of cash, as well as other tangible assets, would be sure to overcome the challenges of a market crash.
We will be looking out for such companies when the market crashes and buy shares without delay.
How I Lower Risks When I Buy Stocks During A Market Crash
I Go For Established Companies
I always remain cautious and watchful when it comes to the companies I buy my stocks from, and I find well-established, widely recognized companies that have a great balance sheet that can push them through a recession.Such businesses are capable of utilizing their cash-reserves to back up their balance sheets in the event of a market crash, facilitating them to steadily and reliably pay stock dividends to their investors. But, we, as investors, should be aware that profits aren't always guaranteed. Therefore, I buy my stocks carefully and in a manner that I lower the risks.
I Invest For Longer Periods
I follow an investment philosophy that says ¨How long you take in the market is much crucial than timing the market¨. In the stock investment industry, nobody can predict precisely when the stock market would crash or recover, so I remain vigilant and focused on long-term investment opportunities.
I use a buy-and-wait investment strategy whereby I remain invested in all market periods, assisting me in avoiding making impact reactions when the market crashes, which may tempt me to sell my stocks at the wrong time.
Additionally, when I hold my stocks for more extended periods, it helps me minimize fees that I might have otherwise incurred while transacting.
Indeed, no stock investment strategy lacks its limitations, and I am not guaranteed to get more than I invested, however, its helpful to hold on when the market crashes as this may pay off in the long-run.
I Buy My Stocks Regularly
By buying my stocks bit by bit, it helps me minimize the risk of purchasing high-value shares once just before a market crash.It also enables me to buy shares across a wide range of prices, and therefore, in case of a market crash, my invested cash would buy me more shares and a few after recovery. It shields me from market crashes.
Also, it is not a guarantee that when I buy shares regularly, it will leave me risky-free. I can encounter the opposite and end up making a loss. However, this could help me develop stock investment principles as I will buy shares whether they are highly-priced or not.
I Avoid Emotions When Buying Stocks
In everything I do, I don't allow my emotions to determine the company I choose to invest in and the stocks I buy. It is crucial not to get influenced by a company name or reputation without researching its balance sheet position.I take into consideration how a market crash may influence me to avoid making wrong decisions and selling my stocks at low prices rather than holding on until the market recovers.
I always encourage myself that market recoveries are also inevitable and are part of stock investment. Thus, for me holding my emotions on a check and waiting for the right time can protect my investment and give good returns.
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