Stock market

Here are 2 of my top stocks to buy if we have a stock market crash this summer.

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The stock market has hit fresh new highs this month. While this may continue, some investors are starting to worry that a crash is still coming. Some cite rising geopolitical tensions around the world, with concerns that interest rates may not be cut this summer as many are planning. While it’s not my primary view, I’ve got two stocks on my watchlist that I think will be the best shares to buy during a crash.

Too high right now.

The first one may not be a big surprise to many people. Rolls Royce (LSE:RR) shares have gained 183% over the past year. With the share price currently above 400p, I cannot justify buying at this time. Value looks inflated and I struggle to see a massive move higher in the coming year.

Yet when I consider what prompted this move, it makes no sense. The business has done a complete 180-degree turn from the struggling pandemic company of 2021. It is making a good place in the power generation segment. Moreover, Civil Aerospace’s profit margins are really starting to recover. It was one of the areas most affected during the pandemic. Yet for 2023, the operating profit margin was 11.6%, up 2.5% from last year.

Of course, one risk is that much of the change has already happened. This may mean that financial performance stagnates rather than increases further.

Based on fundamentals, I like the stock. So, if we see the share price drop by a significant amount quickly, it’s one of those companies that I would definitely want to move quickly.

A stable income option

Another stock on my watch list. Supermarket Income REIT (LSE:SUPR). A real estate investment trust does exactly what it says on the tin. That is, it invests in a diversified portfolio of supermarket real estate assets in the UK. Income from leasing these assets means it can pay dividends to shareholders down the road.

Shares are down 14% year-on-year. REITs have faced difficulties due to high interest rates that have made it expensive to finance new purchases. Additionally, demand for new renters is low as a result of the cost of living crisis.

While these are risks going forward, I think the REIT can fit quite well in my income portfolio. After all, the current profitable yield is 8.03%.

Please note that tax treatment depends on the individual circumstances of each client and may change in the future. The content in this article is provided for informational purposes only. It is not intended to be, nor does it constitute, any tax advice.

For investors with no income storage, I think this is a great option to consider buying now. Given that I already have a lot of income stocks in my portfolio, I would only want to add it if it turns out to be a real bargain, such as during a market crash. A lower share price will serve to increase the dividend yield, making it even higher. At this point, I’d like to step in and shop.

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