Stock market rally: I’d buy dirt-cheap UK shares today and hold them forever

first_img 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. Simply click below to discover how you can take advantage of this. Stock market rally: I’d buy dirt-cheap UK shares today and hold them forever “This Stock Could Be Like Buying Amazon in 1997” Peter Stephens | Friday, 4th December, 2020 Our 6 ‘Best Buys Now’ Shares 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.center_img 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. Enter Your Email Address Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! There’s no guarantee a stock market rally will follow 2020’s stock market crash. However, the past performance of UK shares suggests it’s very likely to take place over the coming years.As such, buying dirt-cheap UK shares now and holding them for the long term could be a sound move. It may enable an investor to make attractive capital returns as company profits and investor sentiment strengthen following a tough 2020.5G 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…Buying and holding dirt-cheap UK shares ahead of a stock market rallyA stock market rally could lift the valuations of today’s ultra-cheap UK shares. It seems likely to take place over the coming years, since every previous market downturn has been followed by a bull market that has produced new record highs. There may not necessarily be a fast-paced market rally in 2021. However, a buy-and-hold strategy could allow an investor to take part in a likely rise in the FTSE 100 and FTSE 250’s price levels.Of course, cheap stocks could benefit the most from an appreciating stock market. They may offer the widest margins of safety at the present time. They could also be worth significantly more in a period of stronger economic growth than investors are currently pricing in.Starting from a low base also means there’s significant scope for a major recovery. As such, focusing on undervalued shares today could be a profitable move over the long run as a likely stock market recovery unfolds.Buying more than just cheap stocksClearly, there’s still uncertainty ahead that may mean a stock market rally includes significant volatility. Past bear markets have often been followed by rallies, only for them to run out of steam as investors begin to fear a double-dip recession. Indeed, the potential for tax rises in 2021 may mean company profits come under a degree of pressure in the near term.As such, buying a diverse range of businesses can help to reduce overall risks. A diverse portfolio is less reliant on a small number of businesses for its returns. Furthermore, buying cheap stocks that have solid balance sheets and competitive advantages versus their rivals may allow an investor to benefit more fully from a long-term stock market recovery. They may be able to deliver rising profitability that allows them to justify a higher valuation in the coming years.A buy-and-hold strategyA likely long-term stock market rally means that a buy-and-hold strategy using dirt-cheap UK shares is a logical strategy. But some investors may seek to trade shares over a short time period. While this can lead to high profits in a short space of time in some cases, it carries significant risks.After all, short-term stock market movements are unpredictable. As such, buying and holding today’s cheap stocks could be a less risky, and more profitable, approach in the coming years. See all posts by Peter Stephenslast_img read more