Stock market crash part II: 3 FTSE 100 shares I’d buy in a Stocks and Shares ISA as the economy sinks

Looking to go shopping on the FTSE 100? Royston Wild reveals three top UK shares he thinks are great buys despite the economic downturn.

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.

Sure, another stock market crash could be just around the corner. But it hasn’t stopped me from buying UK shares in recent weeks. In fact, I’ve a watchlist of top FTSE 100 shares I’ll be looking to buy should share prices collapse through the floor again.

Stock market crashes provide the means for you and I to build five-star stocks portfolios at little cost. Of course, FTSE 100 investors need to be careful before splashing the cash in times like these.  Market crashes often come when trading conditions for many companies have, or are about to, deteriorate significantly.

Get protected!

But stock pickers can take precautions to protect themselves in times like these. They can do a little digging to find FTSE 100 shares with strong balance sheets, for example. These are essential when the threat of a painful and prolonged economic downturn emerges.

Image of person checking their shares portfolio on mobile phone and computer

They can pick FTSE 100 stocks with what billionaire investor Warren Buffett calls economic moats, or what the most of know simply as competitive advantages. That can come in the form of cutting-edge products, significant brand power, broad geographic footprints, or low cost bases for example.

Buying companies with defensive operations like utilities, telecoms providers, food producers and general insurance suppliers is another good idea. Profits here tend to remain stable whatever the broader economic landscape is like.

And finally, stock investors can pick up UK shares that trade on low valuations, like bargain-basement price-to-earnings (P/E) ratios of around 10 times and below. These sort of ratings tend to bake in the possibility of earnings projections taking a whack. And so they offer investors a wide margin of safety and can protect them from severe share price drops.

3 FTSE 100 heroes on my radar

With all this in mind, let me reveal three FTSE 100 shares I’d buy for my Stocks and Shares ISA today:

  • BAE Systems is a great stress-free FTSE 100 share for many reasons. It offers a wide range of market-leading technologies to armed forces across the globe. It trades on a low forward P/E ratio of just 12 times. And finally, investors can take confidence from the fact that global defence budgets remain robust during economic upturns and downturns.
  • Reckitt Benckiser, meanwhile, can rely on the exceptional brand power of its products to keep driving profits higher. But goods like Dettol disinfectant, Nurofen painkillers and Finish dishwasher tablets provide an extra protective blanket for FTSE 100 investors. They are essential product categories that therefore don’t fall out of favour when broader consumer spending power sinks.
  • DS Smith is a UK share I already own in my ISA. And its low forward P/E ratio of 12 times is tempting me to buy even more. It is a major supplier of essential packaging to fast-moving consumer goods companies like Reckitt Benckiser. But this isn’t the only reason I reckon this FTSE 100 share should thrive. Its growing focus on e-commerce will allow it to capitalise spectacularly on the exciting online shopping phenomenon too.

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 owns shares of DS Smith. The Motley Fool UK has recommended DS Smith. 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

The flag of the United States of America flying in front of the Capitol building
Investing Articles

2 UK shares that could rise if Trump wins the Presidential election

These UK shares are among the FTSE 100's most popular stocks. And they could rise in value if Donald Trump…

Read more »

Closeup ruffled American flag representing US stocks and shares
Investing Articles

2 UK stocks that could rise if Harris wins the Presidential election

Royston Wild believes these UK stocks could receive a bump if Kalama Harris wins the Presidency, giving their share prices…

Read more »

Investing Articles

After a 96% plunge, is buying more Aston Martin shares throwing good money after bad?

Just two weeks after buying Aston Martin shares Harvey Jones found himself nursing a painful loss. Yet after recent news…

Read more »

Investing Articles

After crashing 45% in October, should I buy this FTSE 250 share for my Stocks and Shares ISA?

Roland Head explains why he’s tempted to add this risky FTSE 250 turnaround share to his Stocks and Shares ISA…

Read more »

Investing Articles

Could I use a stock market crash to turn £20k into half a mil in just over a decade?

A stock market crash might sound terrifying to some but it can also present a once-in-a-lifetime opportunity to accumulate generational…

Read more »

Investing Articles

Recently released: October’s small-cap stock recommendation [PREMIUM PICKS]

We believe the UK small-cap market offers a myriad of opportunities across a wide range of different businesses and industries.

Read more »

Investing Articles

Here’s how a Stocks and Shares ISA and Lifetime ISA could supercharge my wealth!

Individual Savings Accounts (ISAs) can help UK share investors take their earnings to the next level. And their importance is…

Read more »

A person holding onto a fan of twenty pound notes
Investing Articles

A high-yield dividend ETF and an investment trust to consider this November!

Investors wanting to boost their passive income could benefit from investigating these high-yield funds and trusts, says Royston Wild.

Read more »