I like to keep a list of shares to buy in a stock market crash. Investing when the market is falling can be challenging, and I believe one of the best ways to get around these issues is to prepare in advance. That means I am ready to act if prices fall substantially. By using this approach, I will be ready for all eventualities.
As such, here are a selection of companies I would buy for my portfolio in a stock market crash based on their income and growth credentials.
Shares to buy for growth
There are two companies I would buy for my portfolio as growth investments in a stock market crash. Both are located in the financial sector and are different ways to own unique growth themes.
The first is PayPoint. This company helps bridge the gap between the world of cash and cashless transitions. It provides payment terminals for shop owners and the software to help customers pay online bills with cash. It has also recently been rolling out a service to replace the need for ATMs. PayPoint allows consumers to withdraw cash from convenience stores without buying other items.
As the world becomes increasingly focused on cashless transactions, I think the demand for the group’s services will grow. That is why the stock is on my investment wishlist.
I would also buy IG Group. The financial services enterprise has grown rapidly over the past 10 years through a combination of organic growth and acquisitions. The corporation takes a tiny percentage of every trade customers make on its platforms, which can be highly lucrative in volatile markets.
In a stock market crash, I think the company will outperform other equities for these reasons. Additional cash generation will also provide more firepower for acquisitions to drive growth in the years ahead.
Challenges these companies could face include additional regulatory constraints and competition from international peers. These headwinds may restrict growth and impact profit margins.
Stock market crash buys
I would also use any stock market crash to snap up some shares in technology companies. Tech stocks have been some of the most sought-after investments over the past two years. This rush to buy has sent equity valuations to record levels. If there is a stock market crash, these valuations should return to more appropriate levels.
Two stocks on my wishlist are Team17 and Computacenter. I have chosen these because they have a long track record of developing gaming software and helping clients with IT needs. Their track records should help them stand out in the increasingly competitive tech sector.
Competition is the biggest challenge they will face, especially as these are relatively small businesses compared to their giant US-based peers.
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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended PayPoint. 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.