How I’d invest £10k in cheap shares right now

first_img “This Stock Could Be Like Buying Amazon in 1997” Image source: Getty Images Our 6 ‘Best Buys Now’ Shares Now is a great time to invest a lump sum in the stock market. After the recent stock market crash, there are many cheap shares for investors to choose from.However, it is becoming clear that the economic disruption from the coronavirus crisis may last for some time. Therefore, investors need to be careful when picking undervalued stocks.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Many cheap shares could see a significant deterioration in their trading performance over the next few months. That could lead to losses for investors in these businesses.On the other hand, some cheap shares have bright prospects and strong balance sheets. These companies could produce attractive capital and income returns for investors over the long run.Finding cheap sharesIf you are looking for cheap shares, the best place to start could be the FTSE 100.These blue-chip businesses are much more likely to survive the coronavirus crisis because policymakers have acted quickly to provide financing. Small businesses have not been so lucky.Many smaller companies are struggling to raise additional financing to weather the storm. Some even entered the crisis with a lot of debt, which could limit their ability to survive if profits drop precipitously.Even though it has recently surged back above 6,000, the FTSE 100 is still full of cheap shares. Many companies are only just starting to get to grips with the new normal, which could present an attractive opportunity for long-term investors.Competitive advantageThere are plenty of other attractive cheap shares outside the FTSE 100 as well. The best companies are those that have a definite competitive advantage over peers. This could be anything from a unique product to big economies of scale or sticky client base.The best way to find these companies to look for businesses with large profit margins or a high return on equity (ROE). These metrics can signal that a business is earning a lot more profit than the rest of the sector. It usually has a competitive advantage that’s helping it meet this objective.DiversificationAs mentioned above, it could be some time before the world economy returns to normal. As such, if you are looking to invest a lump sum in cheap shares today, the best way to limit risk is to buy a diversified basket of these stocks.Even if you stick with the market’s top blue-chips, considering the current situation, there’s no telling if these stocks will still be around in a year.By diversifying, you can protect yourself from the worst-case scenario as even if one or two businesses in the portfolio fail, you will still have money left to stage a comeback.Overall, while the outlook for the global economy might be uncertain, now could be an excellent time for long-term investors to snap up high-quality cheap shares at a discount.The potential for long-term profits could far outweigh the near-term risk of following such a strategy. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Rupert Hargreaves | Saturday, 2nd May, 2020 | More on: ^FTSE Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.center_img Enter Your Email Address How I’d invest £10k in cheap shares right now Simply click below to discover how you can take advantage of this. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Rupert Hargreaves 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. See all posts by Rupert Hargreaveslast_img

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