Buying cheap stocks today may not be an appealing idea to many investors. After all, the prospects for the global economy continue to be very uncertain. And some companies may struggle to adapt to changing consumer tastes in a post-coronavirus world.
However, low valuations within some sectors mean that now could be the right time to buy a diverse range of shares. They could outperform other mainstream assets and help you to generate impressive returns.
Cheap stocks that account for future risks
Some cheap stocks are priced at low levels for good reason. But others appear to be suffering from weak investor sentiment towards their wider industry and stock market. For example, some companies have solid balance sheets, strong cash flow and strategies that could produce improving financial performances in the coming years. Yet they have valuations that, in some cases, were last seen during the global financial crisis.