Forget gold. I’d buy cheap UK shares in a second stock market crash

first_img The likelihood of a second stock market crash continues to be relatively high. Risks, such as a second wave of coronavirus, as well as political uncertainty surrounding Brexit, could weigh on investor sentiment over the coming months.Should a downturn occur, many investors may decide that less risky assets, such as gold, are more attractive than UK shares.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…However, over the long run, the returns on offer from bargain stocks in the FTSE 100 and FTSE 250 could significantly outperform the gold price. As such, buying them, rather than gold, could prove to be a shrewd move.A second stock market crashOnly time will tell whether indexes such as the FTSE 100 and FTSE 250 experience a second market crash. Risks to the economic outlook remain in place, and could negatively impact on the financial performances of a wide range of businesses. In turn, investors may become increasingly bearish, which could send UK shares lower.In such a scenario, buying gold and other less risky assets may seem to be a sound move. The precious metal has a long history as a defensive asset that’s generally performed well in periods of economic weakness.However, bargain UK shares could offer a better long-term return outlook than gold after a second market crash as a result of the precious metal’s high price. It’s breached its record high this year, which suggests there may be more limited scope for capital growth than there has been in recent years. And, with investor sentiment likely to improve over the long run as fiscal and monetary policy stimulus take effect, buyers of FTSE 100 and FTSE 250 shares could benefit from a sustained recovery.Preparing for a slumpOf course, there’s doubt as to whether a second market crash will occur. As such, investors who are able to unearth high-quality businesses trading at low prices may wish to invest today. Their prices may factor in the potential for a further decline in the stock market. This could mean they currently include a wide margin of safety.If there’s a downturn in UK share prices, investors may wish to remind themselves of the track record of indexes such as the FTSE 100 and FTSE 250. Yes, they have experienced major recessions and bear markets over recent decades. But they have always recovered and posted annualised total returns in the high-single-digits.By investing while share prices are cheap, such as after a market crash, you may be able to obtain an even higher return over the long run that’s significantly ahead of other assets such as gold. Volatility may be high among UK shares. But their past performance suggests that they’re more than likely to offer the best returns available for investors who can look beyond short-term uncertainty. See all posts by Peter Stephens Simply click below to discover how you can take advantage of this. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Image source: Getty Images. Forget gold. I’d buy cheap UK shares in a second stock market crash Our 6 ‘Best Buys Now’ Shares I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. “This Stock Could Be Like Buying Amazon in 1997” Enter Your Email Address I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Peter Stephens | Tuesday, 4th August, 2020 last_img read more