The best UK shares to buy now for the next stock market rally

Some of the stocks in my portfolio could be among the best UK shares to buy now. They are all bouncing back up today. And I think it’s remarkable how the stock market has the capacity to digest and look beyond even the most dire geopolitical events.

However, the stock market behaves according to the combined actions of all the individual investors participating in it. And that’s a lot of brainpower being applied to the analysis of current events and company specifics. But it’s also potentially a lot of emotion driving fast-trigger reactions as well.

Indeed, the market tends to produce its most severe movements when something happens that it wasn’t really expecting. A good example of that phenomenon is the sudden arrival of the pandemic two years ago.

Bull follows bear

But look what happened immediately after the coronavirus crash of 2020. We saw a rapid and robust bull market that took many share prices way higher than they’d been before the plunge. And I think that’s a great example of the way the market looks ahead. Businesses were recovering from the effects of the pandemic. But stocks were in front of the curve and anticipating growth and prosperity beyond the crisis.

It’s that forward-looking attitude that gives me confidence that the stock market is a good place to invest for the long term. And just like billionaire investor Warren Buffett, I’m keen to take advantage of setbacks that lower stock prices.

But that often means I need to buy stocks to hold for the long term when grim news is in the air. But American investor Robert D Arnott made a good point when he said: “In investing, what is comfortable is rarely profitable.”

And, to me, his observation means few stock investments produce extravagant returns unless we take some risks.

Of course, all shares carry risks. It’s just the nature of the beast. Every stock is backed by a real business in the real world. And in the real world, crazy things can happen — It helps me to remember the old aphorism that truth can be stranger than fiction.

Long-term opportunities

However, as well as the risks, stocks also come with opportunities. And Buffett pointed out those opportunities drove an annualised return of around 10% for America’s S&P 500 index over decades. Indeed, the long-term potential of the stock market can be phenomenal. Although past performance is no guarantee of a positive outcome for investors in the future.

Nevertheless, I’m looking for the best UK shares to buy now for the next stock market rally. And I’m convinced that the next bunch of leading stocks will contain a high scoring against traditional value indicators. So I’m focusing on companies such as British American Tobacco and diversified mining company South 32, among many others.

It’s not certain these stocks will make a good investment for me just because I like them. But I do believe the market will process current geopolitical concerns and the underlying businesses will trade well in the coming years.

The post The best UK shares to buy now for the next stock market rally appeared first on The Motley Fool UK.

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Kevin Godbold owns shares in British American Tobacco. The Motley Fool UK has recommended British American Tobacco. 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.