Could we be on the cusp of a prolonged new bull market? Encouraging news flow surrounding a Covid-19 vaccine has helped UK share prices bounce back strongly in November. A successful rollout of a pandemic-ending ‘silver bullet’ in the months ahead I think would lead to further spectacular rises in 2021 too.
UK share prices rebounded strongly in the aftermath of the 2008/2009 banking crisis. Many thousands of investors got stinking rich in the process. A huge number of Stocks and Shares ISA investors even made millions as stock markets bounced back.
I’ve already been buying stocks for my ISA to ride the economic rebound. And there are plenty of others I’m thinking of buying to ride the new bull market and make loads of money. Give me a few minutes to talk you through some of my favourites:
#1: Media-based UK shares to bounce back
UK shares involved in the media are often some of the fastest to recover when economic conditions improve. Advertising revenues tend to pick up rapidly as the light at the end of the tunnel appears, which is positive news for 2021. Indeed, ad sales are starting to improve right now, even as global Covid-19 infection rates still climb.
This bodes well for multinational ad agency WPP for example, which has the resources, the prestige, and the global footprint to capitalise fully on the economic upturn. The FTSE 100 firm is one of my favourite picks also because of its low earnings multiple and its big dividend yields for 2021. These sit at 10 times and 5.5% for next year respectively.
System1 Group is another top UK share that should rebound strongly. It provides market research and other information to companies concerning what makes consumers tick. Analytics and exhibitions specialist and FTSE 100 company RELX could also see business explode in 2021 as companies prepare themselves for the upturn.
I’d also buy some of London’s battered broadcasters and publishers to capitalise on the improvement in advertising spending. ITV, which was recently relegated from the FTSE 100, is a great way to ride this trend, as is fellow FTSE 250 stock STV Group. I also reckon digital publishing group XLMedia and magazine producer Future are other terrific buys for the new bull market.
#2: Life insurers to rebound
A bounce in consumer spending power in 2021 would help life insurance revenues climb higher too. This bodes well for some of the FTSE 100’s biggest companies like Aviva, Legal & General Group and RSA Insurance Group. I like all these UK shares today because of the gigantic dividend yields they’re packing. These range from 4.7% to 7.2% for next year.
Additionally, these FTSE 100 heroes all trade on low earnings multiples (and in the case of Aviva and Legal & General, below 10 times). However, the cut-price life insurer I’d buy today is Prudential. This is because its huge exposure to emerging Asian markets should deliver spectacular earnings growth in 2021 and long beyond.
