Stock market crash: I’d invest £10k in this FTSE 100 share in an ISA to make a million

Thinking of buying into the FTSE 100? Royston Wild explains why the lead index provides many great stocks to buy after the market crash.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Stock market crashes are hideous things. It’s no fun to watch the value of your investments collapse. All that time and energy spent on researching and then buying UK shares, only to see all of it go up in smoke. It can derail the plans many of us might have had to invest after identifying which stocks to buy as well.

We here at The Motley Fool don’t panic when we see our shares slump in value though. History shows us that stock market crashes are nothing new. And that over the long term their impact on total returns tends to be rather superficial.

If you’ve taken steps to build a well-balanced investment portfolio comprising top-quality shares then, over the longer term (say five years or more), your UK shares should still deliver titanic returns.

Business man on stock market crash financial trade indicator background.

Our view is that the stock market crash provides a brilliant buying opportunity for investors. It allows you and I to buy UK shares at rock-bottom prices and then watch them rise in value as the economic recovery takes hold.

There are plenty of FTSE 100 stocks that look too good to miss following the market meltdown, companies that could deliver spectacular long-term returns.

8% dividend yields!

I reckon Legal & General Group (LSE: LGEN) is one of the best shares to buy following the stock market crash. Its 32% price decline since the start of the year leaves it trading on a forward price-to-earnings (P/E) ratio of 8 times. The FTSE 100 stock carries a mighty 8% dividend yield to boot.

Legal & General’s been heavily sold during the broader stock market crash. Fears of a global recession denting demand for its financial products did the damage. Investors are concerned about the amount of leverage on its balance sheet too.

I’d argue these concerns could be overcooked though. Latest financials showed that the Footsie giant’s solvency position remains extremely healthy. Its Solvency II ratio ranged between 162% and 167% for the first half of 2020.

A top stock to buy after the market crash

It’s true Legal & General’s product sales might suffer in the near term amid the global economic downturn. However, over a longer time horizon, the FTSE 100 firm’s profits outlook remains quite secure. It will be a major beneficiary of key demographic trends in the years ahead, like ageing populations in its developed markets, and rising wealth levels in its Asian territories.

And Legal & General is investing heavily in these areas to drive long-term profits. It’s expanding its geographical footprint to benefit from the globalisation of asset markets, for example, and is ploughing large sums into its technologies to capitalise on increased digitalisation.

Buying Legal & General shares at current prices leaves plenty of scope for big investment returns in the years ahead. But, in truth, it’s just one of many FTSE 100 stocks that’s worth a close look following the market crash.

I reckon now’s a great time for ISA investors to go bargain hunting on the Footsie.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild 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.

More on Investing Articles

Closeup of "interest rates" text in a newspaper
Investing Articles

Why I think right now could be the best time to buy UK stocks in over 20 years

UK bond yields hitting multi-decade highs are causing UK stocks to fall. Stephen Wright thinks there are opportunities, but investors…

Read more »

Pink 3D image of the numbers '2025' growing in size
Investing Articles

Could 2025 be the year of the great Lloyds share price recovery?

Analyst sentiment towards the Lloyds Bank share price is improving as we head into 2025, despite the short-term risks it…

Read more »

Investing Articles

1 growth stock that could soar 105%, according to Wall Street experts

This Fool has his eye on an innovative growth stock that has plunged by 80% since early 2021. But what…

Read more »

Investing Articles

No savings at 40? How £10 a day could grow into £8,273 of passive income a year!

This writer reckons it's entirely realistic for an investor to save a tenner a day to aim for an attractive…

Read more »

Young Asian man drinking coffee at home and looking at his phone
Investing Articles

2 super-value FTSE 100 shares to consider right now!

These FTSE 100 shares offer a blend of low price-to-earnings (P/E) multiples and 6%+dividend yields. Here's why I think they're…

Read more »

Investing Articles

Prediction: these FTSE 100 stocks could be among 2025’s big winners

Picking the coming year's FTSE 100 winners isn't an easy task, but we're all thinking about it at this time…

Read more »

Investing Articles

This UK dividend share is currently yielding 8.1%!

Our writer’s been looking at a FTSE 250 dividend share that -- due to its impressive 8%+ yield -- is…

Read more »

Investing Articles

If an investor put £10,000 in Aviva shares, how much income would they get?

Aviva shares have had a solid run, and the FTSE 100 insurer has paid investors bags of dividends too. How…

Read more »