Stock market crash? 2 UK shares I’d buy to protect myself

With the risks of a stock market crash growing, these two UK shares could offer some protection in near-term stormy waters.

| 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.

The recent spike in government borrowing costs has ignited concerns of a possible stock market crash. However, here at The Motley Fool, we don’t try and predict short-term market movements. Instead, we focus on company fundamentals and review stocks based on their long-term qualities.

That said, recently, a considerable amount of money has flowed into some UK shares, pushing them to what appear to be unsustainable valuations. 

Therefore, I think it may be sensible to avoid these businesses and focus on firms with more sensible valuations and sustainable long term growth outlooks instead. Here are two of my favourite companies in the current market. In the event of a stock market crash, investors may even be able to pick up shares in these firms at discounted valuations. 

Should you invest £1,000 in Apple right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Apple made the list?

See the 6 stocks

UK shares to buy 

In my opinion, there are only a few companies as well-positioned to profit in all market environments as publicly-traded hedge fund group Man (LSE: EMG). 

Hedge funds generally make more money for their investors in times of uncertainty. When markets are jumping up and down, there are more opportunities for these firms to take advantage of. This is what happened to Man last year. As a result, assets under management hit a record high of $123.6bn

I think another stock market crash could lead to a repeat of this trend. That’s why I’d buy the stock for my portfolio of UK shares today. 

That said, managing money can be a risky business. If Man’s performance starts to fall, investors will pull money just as quickly as they added it. The group faces other challenges as well. Heavy competition in the fund management industry is pushing down management fees and, as a result, Man’s income. 

Stock market crash investment 

Another company I’d buy for my basket of UK shares is gaming group 888 (LSE: 888). This business has been one of the biggest winners of the pandemic. With consumers stuck at home, many turned to online gambling to pass the time.

888’s net income could jump by more than 100%, thanks to this trend. And while a decline is forecast for 2021, I think investors should look past this short-term challenge. With over £100m of net cash on the balance sheet, the group is well-financed and has plenty of capital to acquire peers to drive growth. 

But while I think this is one of the best UK shares to buy for a stock market crash, it does have its challenges. Gambling is a highly regulated industry, and the government could introduce new regulations which would hurt profitability at any point. There’s also the risk of fines and penalties if the group doesn’t adhere to existing rules.

All of these challenges could severely impact shareholder returns if the group runs into trouble. 

But what does the head of The Motley Fool’s investing team think?

Should you invest £1,000 in Apple right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Apple made the list?

See the 6 stocks

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.

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.

More on Investing Articles

Jumbo jet preparing to take off on a runway at sunset
Investing Articles

Where could IAG shares go in the next 12 months? Here’s what the experts say!

After a stunning 129% rally, IAG shares have started to nosedive in recent weeks. Analysts are divided over the future…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

The Eurasia Mining (EUA) share price is up 181% this year! What’s going on?

The Eurasia Mining (LSE:EUA) share price has had a simply stunning 2025 so far. What's going on -- and is…

Read more »

One English pound placed on a graph to represent an economic down turn
Investing Articles

Is this the FTSE 100’s best dividend share?

Christopher Ruane weighs some pros and cons of a high-yield FTSE 100 share he believes investors should consider for their…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

Down 27% in 3 days! Should I buy the dip in this FTSE 250 defence stock?

This FTSE stock has collapsed in recent days, leaving this Fool wondering if he's looking at a buying opportunity for…

Read more »

Investing Articles

Is ITV a screaming FTSE 250 bargain hiding in plain sight?

Down by over two-thirds in around a decade, this well-known FTSE 250 share now trades on what may look like…

Read more »

Investing Articles

Is this FTSE 100 AI growth stock beginning to run out of steam?

Despite it being a runaway success, Andrew Mackie is becoming increasingly concerned for the momentum of this AI growth stock.

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

Up 12% today, here’s a great FTSE 250 growth share to consider!

Softcat's share price is soaring following a blockbuster first-half trading announcement. Here's why the FTSE 250 share is worth a…

Read more »

Growth Shares

Prediction: in 1 year, the easyJet share price could be as high as…

Jon Smith points out why the easyJet share price could head higher over the coming year based on the current…

Read more »