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.
Buying and holding dirt-cheap UK shares ahead of a stock market rally
A 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