Why I think shares like these can help beat a FTSE 100 crash

first_img Enter Your Email Address See all posts by Alan Oscroft 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. Could you have better avoided the FTSE 100 crash? There will be crashes in the future, for sure. I think there’s even a realistic chance that we could see a second phase with a double-dip stock market crash now. So it’s never too late to ask.I certainly don’t suggest we should abandon our long-term investing strategies just because we’ve had a tough few months. No, I remain convinced that a Foolish strategy already helps reduce the pain of a FTSE 100 crash.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…But I have been thinking about focusing a little more strongly on what are often known as ‘picks and shovels’ stocks. But what are they? The name comes from the gold rush days, when huge numbers of prospectors went off in search of their fortunes. Some made it big, but countless others returned penniless.But do you know who became rich with very little risk? Those who ran the stores and provided the materials for the hopeful miners. The clothing, the provisions, the explosives. And the picks and shovels.FTSE 100 crash safetyWhat about similar companies that might offer safety in a FTSE 100 crash? Traditionally, it’s taken to mean those providing goods and services that other companies use. For example, the retail energy business is highly competitive. But every supplier of gas and electricity in the country simply has to use the distribution networks. And those are run by National Grid. If an energy firm or two should suffer in a FTSE 100 crash, National Grid will still have the business from the winners to keep it going.There’s an example in the construction industry too. Infrastructure specialists are in a downturn, with large debts and tight cashflow characterising the sector. Undercutting on pricing to win contracts is a necessary part. But pare the potential margins too thin, and a project delay can put a company well into the red. The best example is Carillion, which failed in 2018 in the largest ever trading liquidation in the UK.Bricks and mortar, literallySo instead of investing in construction firms themselves, buying shares in materials suppliers could be a lot safer. CRH is an example of one that’s been getting off lightly in the current FTSE 100 crash. While plenty of shares have slumped 50% and more, the CRH share price is down less than 15%. Or in the FTSE 250, I like the look of brick maker Ibstock.I think we can expand the picks and shovels definition too. Including companies that don’t serve those at the sharp end, but instead aggregate their services for end users seems like a fair extension. I’m talking of, for example, travel agents like TUI Travel. The FTSE 100 crash has hit TUI quite hard, admittedly, but I think it’s a safer bet then investing in an airline directly. If an airline goes bust, TUI would just use the others.End user servicesComparison firms like Gocompare fit the bill too. While our big insurers have suffered badly in the FTSE 100 crash, people are still buying insurance. And they’re using comparison companies to do it.Ultimately, biasing your portfolio a bit more towards these picks and shovels is just, I think, potentially making a sound long-term investing strategy a little bit safer. I’m sure you can think of more examples too. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! 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. Why I think shares like these can help beat a FTSE 100 crash 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.center_img Image source: Getty Images Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Ibstock. 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. Alan Oscroft | Sunday, 31st May, 2020 “This Stock Could Be Like Buying Amazon in 1997” Simply click below to discover how you can take advantage of this. Our 6 ‘Best Buys Now’ Shareslast_img

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