Stock market recovery: how I’d invest in UK shares like Warren Buffett to double my money

Investing money in UK shares via a similar strategy to that used by Warren Buffett could lead to high returns in a stock market recovery, in my view.

Peter Stephens ❯

Having held various senior management positions in the manufacturing sector, Peter founded his own manufacturing company in 1996. This was subsequently sold in 2007. Meanwhile, his passion for investing (which began during the privatisations of the 1980s) remains strong and he couples this with writing for The Motley Fool as a Contractor. His investment style is value-oriented; focusing on company fundamentals, as well as assessing the strength and presence of a competitive advantage. While above-average growth prospects remain very attractive, a greater focus on dividends has crept in since Peter became a part-time retiree in 2007.

Published 2 December, 2020 7:08 am GMT

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Buying UK shares ahead of a stock market recovery could be a shrewd move. It may lead to impressive returns as the economic outlook strengthens and investor sentiment improves following the 2020 stock market crash.

Furthermore, purchasing companies that have wide economic moats and are experiencing difficult operating conditions may lead to higher returns in the coming years. Such a strategy has been successfully pursued by Warren Buffett over many decades. As such, they could lead to 100%+ returns over the long run.

Buying struggling UK shares for the stock market recovery

Burberry is among those UK shares currently experiencing tough operating conditions. The FTSE 100 luxury fashion company has been forced to close a large number of its stores due to lockdown measures during the coronavirus pandemic. As such, its sales performance has suffered greatly in the current financial year.

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However, Burberry has a wide economic moat as a result of its strong brand and high levels of customer loyalty. It’s also investing in digital opportunities and in its sustainability offering. Therefore, it could be among those FTSE 100 companies able to benefit from a likely stock market recovery in the coming years. Such traits have historically been part of companies held in Warren Buffett’s portfolio.

Investing money in FTSE 100 growth opportunities

Another FTSE 100 stock that has long-term potential relative to other UK shares in a stock market recovery is Segro. The warehousing specialist has enjoyed strong growth in recent months as a result of increasing demand for online shopping. This trend looks set to remain in place after the coronavirus pandemic has subsided. Especially as many consumers have now become used to ordering a variety of goods online.

With a lack of suitable locations across the UK that can house goods for sale online, Segro appears to have a wide economic moat. This may make it an attractive stock for investors who are seeking to follow Warren Buffett’s investment strategy. Furthermore, with it having a solid balance sheet and access to funds, it may be in a good position to expand its presence in what may prove to be a growing sector.

A dominant business set for growth

Rightmove may also offer outperformance of other UK shares in the coming years in a likely stock market recovery. The housing sector seems to be moving increasingly online, which could expand the growth opportunities available to the business.

As with many of Warren Buffett’s holdings, Rightmove has a dominant market position. It’s the industry leader, and the obvious place for most people searching for a property to try first. The business is also making investments in increasing its breadth of services while seeking to innovate. As such, it could realistically outperform other UK shares in the coming years.