An uncertain economic outlook means that many of the best UK shares face challenging near-term outlooks.
While this may cause some investors to switch their focus to other assets such as gold and Bitcoin, cheap stocks could produce higher returns over the long run as they recover.
As such, now may be the right time to build a portfolio of high-quality businesses. Over time, they could become more dominant in their respective sectors and boost your chances of making a million.
Buying the best UK shares today
Of course, defining which companies can be described as the ‘best UK shares’ is highly subjective. However, it’s likely to include those businesses that have the financial strength to overcome a weak period for the economy.
Higher unemployment, weaker consumer confidence and risks such as Brexit and coronavirus are set to cause a period of difficultly for many companies. As such, owning businesses that can survive a tough economic period could be a sound move.
Similarly, companies with a competitive advantage over their peers may produce impressive returns in the long run. They may be able to extend their market positions versus weaker competitors to gain market share.
This may lead to improving profitability as the economic outlook improves. The best UK shares may also be better able to adapt to changing operating conditions brought about by the recent coronavirus pandemic.
Making a million
Of course, the best UK shares are trading at low prices in many cases. Weak investor sentiment towards the wider stock market means that some companies with sound finances and wide economic moats are unpopular among investors.
This means new investors may have the chance to buy them at low prices so that they have scope to deliver high returns in the long run.
Even if your portfolio generates the same return as the wider stock market, making a million with British stocks is a realistic goal for any investor.
For example, assuming an 8% annual return that’s similar to the stock market’s past gains would turn a £500 monthly investment into a £1m portfolio over the course of 35 years.
However, with many cheap shares available at the present time, many investors may be able to outperform the market average return in the long run.
Investing after a market crash
While the idea of buying the best UK shares may seem unappealing to some investors after the market crash, now could be an opportune moment to focus your capital on the FTSE 100 and FTSE 250.
Many high-quality businesses trade at low prices in both indexes. This could allow them to outperform other assets, such as gold and Bitcoin, over the long run.
In doing so, they may increase your chances of making a million.
Savvy investors like you won’t want to miss out on this timely opportunity…
Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!).
Not only does this company enjoy a dominant market-leading position…
But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks!
And here’s the really exciting part…
While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes.
That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021.
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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