Choppy markets may present buying opportunities for high-quality stocks at discounted prices.

Some Fools might consider adding to their positions in companies they have strong conviction in; others might view volatility as an opportunity to start a position in a company they previously deemed too expensive.

Admiral Group

What it does: Admiral Group provides car, home, and travel insurance, plus loans and financial services in the UK and beyond.

By Mark Hartley. When markets get choppy, it can help to shift a portfolio toward stocks with a low beta – a measurement of comparable price volatility. Admiral Group (LSE: ADM) has one of the lowest 5-year beta scores on the FTSE 100. 

As a leading UK motor and home insurer, it benefits from a steady stream of premium income, making its earnings less susceptible to economic downturns compared to more cyclical sectors. It also operates in a tightly regulated industry, reducing its exposure to risk-taking activities.

Its forward price-to-earnings (P/E) ratio dropped to 14 recently, so it looks undervalued.

However, high interest rates have impacted profitability in the past, wiping 50% off the share price in 2021/2022. Recently, this trend has reversed but a return to high rates could hurt the price again.

Mitigating this risk is an attractive 4.9% yield, with a decent track record of dividend payments. 

Mark Hartley does not own shares in Admiral Group.

Games Workshop

What it does: Games Workshop manufactures products for tabletop gaming enthusiasts including miniatures, paints and books.

By Royston Wild. I’ve steadily drip fed money into Games Workshop (LSE:GAW) shares since I first invested in 2020.

I topped up my position again in late January, and I’ll buy more if market turbulence causes the tabletop gaming giant to slump February’s record highs.

Games Workshop shares have proven an excellent long-term investment, up 2,750% in the last 10 years. I’m confident the next decade will be another highly successful one too.

The Warhammer maker still has plenty of room for growth in its bread-and-butter operations as global expansion continues and broader interest in fantasy wargaming booms. Core revenues rose an impressive 14.3% in the six months to November.

It’s looking to supplement this with supercharged royalty revenues through major media deals (such as the film and TV tie-up currently in the works with Amazon). Such agreements also have the potential to substantially boost demand for Games Workshop’s traditional products.

I think it’s a top stock to consider even as the threat of US trade tariffs looms.

Royston Wild owns shares in Games Workshop Group.

Games Workshop

What it does: Designs and manufactures plastic miniatures for tabletop wargames in the Warhammer and Lord of the Rings universes.

By Zaven Boyrazian. Few FTSE stocks can hold a candle to the tremendous track record of Games Workshop. While there have been ups and downs, the business is among the best-performing investments of the last 20 years in the UK. And it’s not hard to see why.

Pairing an addictive hobby with a dedicated community is an excellent recipe for pricing power. And its one that management has cooked up perfectly, with operating profit margins sitting just above 40% with a staggering 65% return on equity.

This strong performance has continued throughout 2025 as new miniatures are quickly getting sold out by popular demand. And while the threat of at-home 3D printing is becoming more prominent, the firm’s pricing power remains intact.

With that said, it should come as no surprise that Games Workshop shares trade at a premium valuation. But in a choppy market, even the best businesses can get sold off. And that could be a terrific opportunity to snap up more shares at a discount.

Zaven Boyrazian owns shares in Games Workshop.

GSK

What it does: GSK is a global biopharma company that specialises in developing medicines and vaccines.

By Paul Summers. Gravitating to strong and stellar – if somewhat dull – defensive stocks makes a lot of sense in uncertain times. That’s why I’m currently running the rule on pharma giant GSK (LSE: GSK).

Sure, the shares have underperformed the FTSE 100 index over the last twelve months thanks to legal challenges relating to its heartburn drug, Zantac. Cost pressures have also played a role.  

However, things are looking up. Back in February, the company lifted its 2031 sales target to over £40bn. Q4 sales also beat estimates. 

As I type, the shares can be picked for a little under nine times forecast FY25 earnings. That’s cheap relative to the market and healthcare stocks in particular. There’s also a 4.4% yield, comfortably covered by expected profit. 

GSK won’t shoot the lights out but it should provide some stability to a portfolio going forward.

Paul Summers has no position in GSK.

With the US stock market crashing by double digits earlier this month, opportunistic contrarian investors have begun asking what are the best stocks are to buy now?

Historically, some of the best investments are high-quality companies trading at a deep discount on their underlying value. But finding such opportunities isn’t always easy, especially when everyone’s looking in the same place. That’s why I almost always start my search among the businesses that have been beaten up the most.

Finding value in unloved stocks

Companies that get sold off aggressively can end up getting mispriced. With that in mind, here are five of the worst-performing US stocks over the last 12 months.

Chances are, each of these businesses is getting caught in the panic-selling crossfire of the US tariff-induced market sell-off that started earlier this month. And while the subsequent announcement that tariffs are being paused for 90 days created a rebound, each of these businesses is still trading close to their 52-week lows.

However, just because a firm is getting sold off doesn’t instantly make it a bargain. Each is tackling notable challenges right now. As such, investors need to examine operational risks and potential rewards before jumping in. To demonstrate, let’s zoom in on Novo Nordisk.

The challenge of pharmaceuticals

As more people become more health conscious, Novo Nordisk is finding tremendous success with its GLP-1 weight loss drugs. In particular, Ozempic now has a 44% estimated market share, with demand growing at an accelerating pace. The impact of this is made perfectly clear in its latest set of earnings, which reported revenue and profits surging by over 30%.

With plenty of other drugs in the pipeline, this could just be the tip of the iceberg. However, like all pharmaceutical enterprises, Novo Nordisk isn’t immune to the challenges of clinical trials. And last December, shareholders were reminded of this when the results of its brand-new weight-loss drug, CagriSema, fell short of expectations.

While the drug appears to be effective, average weight loss came in at 22.7% over 68 weeks, versus the 25% Novo Nordisk was aiming for. That led to a steep double-digit sell-off, demonstrating that bad results from a clinical trial can cause pharmaceutical stocks to plummet. Nevertheless, given the enormous market opportunity of weight-loss drugs, such volatility may be a price worth paying, in my mind. That’s why I think Novo Nordisk’s recent slip could be a potential buying opportunity and deserves further research.

Looking at the other businesses on this list, there are a variety of challenges investors need to take into consideration.

Advanced Micro Devices is facing fierce competition from the likes of Nvidia, while ASML is caught in the middle of a brewing trade war between the US and Europe. As for Disney, subscriber attrition from its Disney+ streaming platform is causing concern.

Of course, each business also has promising long-term potential. So when looking for the best stocks to buy, investors must dig deeper to determine whether the risks are worth the reward.

International Consolidated Airlines (LSE:IAG) shares have delivered a tasty return over the last year. Someone who invested £10k in the FTSE 100 business 12 months ago would have seen the value of their investment rise to £13,817.

They’d also have received dividends totalling roughly £147 in that time.

But IAG shares have been in a sharp descent in recent weeks, reflecting worries over the economic environment and mounting competition.

Can the British Airways owner rise once again? And should investors consider buying IAG shares for their portfolios?

US threats

Airlines are among the most cyclical companies out there. So it’s no surprise to see them falling sharply in value as intensifying trade wars have darkened an already fragile outlook for the global economy.

In December, The International Air Transport Association (IATA) had predicted revenues and passenger numbers above $1trn and 5bn respectively for the first time in 2025. Now those forecasts are looking shaky, and particularly so as recessionary risks mount in the US, the industry’s most profitable market.

IAG, which has significant exposure to the US through its British Airways, Iberia, Level and Aer Lingus brands, would be especially vulnerable to a US downturn. Just under a third of the company’s air capacity is allocated to its Stateside routes.

There’s a good chance IAG’s already witnessing weakening transatlantic demand. Tigher immigration rules, and widescale criticism of the controversial Trump presidency, are leading to reduced bookings on US-bound flights across the industry:

Other challenges

Other significant obstacles for IAG and its share price are more traditional. Industry competition remains a substantial threat to revenues and airlines’ profit margins.

This danger took on added significance for the FTSE 100 firm in March too, as it agreed to concessions on lucrative routes to and from Boston, Miami and Chicago. IAG’s British Airways, Aer Lingus and Iberia plan to surrender London airport slots aims to soothe concerns of the UK competition watchdog.

Finally, company profits are vulnerable to travel infrastructure problems over which they have no control. Strikes by airport staff have long been a problem across IAG’s routes. Power outages at Heathrow — and subsequent flight cancellations said to have cost airlines up to £100m — have been a more recent hazard.

Risk vs reward

Yet investing in IAG shares also comes with some opportunities. The global commercial aviation market is tipped to grow substantially over the long term, driven by booming emerging markets. And heavyweight brands like British Airways give the Footsie company a great chance to exploit this.

Airbus also forecasts global air traffic will more than double over the next 20 years.

Yet on balance, I still believe IAG shares carry too much risk, even at current prices. The company now trades on a price-to-earnings (P/E) ratio of 4.2 times, which I think fairly reflects the huge challenges it faces.

There’s no shortage of cheap quality shares to buy following recent market volatility. So I think investors should consider adding other shares to their portfolios.

As Warren Buffett says, when others are fearful it is the time for an investor to be greedy. Fear has been stalking the markets in the past few days and many leading FTSE 100 shares have been on the sharp end of a wave of selling.

One well-known FTSE 100 share has seen its price collapse 39% over the past year alone.

It is a share I have held for a while already. But last week I took the opportunity of a tumbling price to buy some more – and this week, as the price headed even lower, I did the same again.

Keeping a rational head in turbulent markets

That sort of behaviour can be wealth-building, but it can also be risky. While stock market turbulence pushing down a share price can lead to a bargain-hunting opportunity, it might also be reflecting some simple economic realities. Maybe the driver for a stock market correction has also reduced the long-term value of a business, something that is then reflected in its share price.

During market turbulence, there might not be time to do detailed research. So I think a smart investor is always prepared in advance, ready to pounce when they see a buying opportunity that may be short-lived.

Defying the wider market

The specific share in question, by the way, is JD Sports (LSE: JD). As the wider FTSE 100 tumbled last Wednesday (9 April), it defied the gloom and moved up sharply following a trading update.

That came after some sharp falls in the weeks before – and that was when I made my purchases.

At face value, the trading update might not seem great. The sportswear retailer said it was too early to provide clear guidance on what US tariffs may mean for its business. It reported that last year’s performance came in line with expectations and that the current year’s outlook is for a decline in like-for-like revenues.

Why was the market excited, then? Following multiple profit warnings and downgraded expectations, JD simply delivering in line with revised expectations for last year. And that was a relief.

Looking ahead, while like-for-like sales may decline, the FTSE 100 firm still expects significant revenue growth (around 14%), thanks to prior acquisitions and an expanded store footprint.

Meanwhile, JD plans to reduce its future store estate expansion activity. That should mean lower capital expenditures, so hopefully a higher proportion of operating profits will feed into the post-tax profit.

Quality company at a knockdown price

Despite that, JD Sports has a market capitalisation of less than £4bn. The retailer ended its most recent financial year with net cash, before lease liabilities. It expects 2026 profit before tax and adjusting items to be in line with consensus estimates, of £920m.

That price-to-earnings ratio looks very low to me for a solidly profitable FTSE 100 company with strong growth prospects.

Yes, tariffs are a risk given JD’s large US footprint. A weak economy could hurt consumer confidence, damaging sales and profits. But as a long-term investor I am looking beyond the short-term economic outlook.

I reckon JD Sports is a FTSE 100 bargain hiding in plain sight and have been building up my shareholding because of that.

Aston Martin Lagonda (LSE:AML) shares recently plunged on fears over US tariffs on car imports. Two Fools talk about whether this could be a buying opportunity to consider.

Note: return data correct as of time of recording.

Transcript:

CHRIS: Hi Fools, Chris Nials here and I’m joined by Motley Fool analyst Zaven Boyrazian. Morning Zaven!

ZAVEN: Hello!

CHRIS: We’re going to be talking about Aston Martin today, and how fears over US tariffs on car imports have sent its share price tumbling. Zaven, what’s been happening?

ZAVEN:  Well Chris, we’ll get to the tariff talk in just a moment, but before we do it’s important to point out that Aston Martin Lagonda shares have actually been stuck in reverse (if you’ll excuse the pun) over the last year or so.

The FTSE 250 carmaker now deals at 70.2p per share, a whopping 59.5% lower than it was 12 months ago. So someone who bought £10,000 worth of shares back then would have seen the value of their investment tumble to £4,046. They wouldn’t even have received any dividends to help soften the blow, either.

But while Aston Martin’s share price sits significantly below the 661.9p it was at five years ago, there’s no doubt that it could yield sterling potential returns if it recovers. But that looks like quite a significant ‘if’ to me right now.

CHRIS: That sounds somewhat ominous!  So do you think that investors should consider buying Aston Martin shares today?

ZAVEN:  Well I think it’s easy on one hand to see the company’s incredible appeal. Its products are the epitome of style, speed. sophistication, and let’s face it, sex appeal.

Aston Martin’s had an association with the likes of James Bond since the mid-1960s, and the brand’s involvement in the dynamic world of Formula One haven’t done it any harm, either.

But while its label and products are highly desirable, the same certainly can’t be said for the company itself, at least in my view. So what’s the problem?

The issue is that Aston Martin is fighting fires on a number of fronts. Last year, pre-tax losses rose by 21% to £289.1m, partly due to a 9% drop in wholesale volumes. Sales declined on the back of supply chain disruptions and tough conditions in China, troubles that still persist.

As a result, net debt — which was already pretty concerning — shot up sharply. At the end of 2024, Aston had net debt of £1.2bn, up 43% year on year. And so the spectre of fresh rights issues and debt issuances still looms large.

CHRIS: And as if Aston Martin didn’t have enough problems, President Trump has of course drawn global carmakers further into his escalating trade battle, and AML are certainly not immune to these.

ZAVEN: Yes that’s right – so as everyone watching will no doubt have seen, the US has slapped heavy tariffs on all imported cars, putting a hefty premium on already-expensive marquee car manufacturers like Aston Martin.

On the plus side though, the delays to previously announced tariffs from the US may suggest that this thumping import tax isn’t a done deal. In addition, the UK chancellor Rachel Reeves has said the government is “in intense negotiations” with Washington to avoid any car tariffs.

But just the mere threat of trade tariffs is enough to chill my bones and I’m sure that’s the same for any investors watching who own shares in Aston Martin. Last year, sales to the Americas — dominated by demand from US customers — accounted for 40% of group revenues, making it by far the company’s single largest market.

With all of its manufacturing located in the UK, Aston Martin would be especially vulnerable to any ‘Trump Tariffs.’

CHRIS: Ok great – thanks so much for the insight Zaven, So what’s next for Aston Martin then?

ZAVEN: Well it’s hoped that a string of new car launches (including the recently revamped Vanquish and the upcoming Valhalla) could revive the company’s fortunes. But the highly competitive nature of the car market means that success is by no means guaranteed.

And on top of that, Aston Martin’s recovery is made even more difficult given those challenging economic conditions in key markets that we’ve already talked about. On balance, I believe that this is a FTSE 250 share that investors should strongly consider steering well clear of.

CHRIS: Thanks so much again Zaven, and thanks so much to everyone watching. Fool on!

The Lloyds (LSE:LLOY) share price has endured a volatile start to 2025. It’s been weighed down by the motor finance mis-selling scandal and renewed tariff threats from Donald Trump. These twin pressures have cast a shadow over the bank’s outlook, with regulatory uncertainty and geopolitical risk shaking investor confidence.

Despite a relatively stable macro backdrop in the UK, Lloyds now finds itself navigating a more complex environment. It’s an environment where litigation risk and international trade tensions threaten to eclipse the steady progress seen in its core retail and commercial banking operations.

Looking beyond the noise

Despite recent volatility, Lloyds shares may be poised for a re-rating over the next 24 months. Remember, the stock is up from where it was a couple of years ago, but it’s down over 10 years. The stock just hasn’t had the right conditions to grow.

The current forward price-to-earnings (P/E) ratio of 10.2 times appears elevated due to analysts factoring in provisions for a potential fine (£1.2bn has been set aside) related to the motor finance investigation. However, looking ahead, the forward P/E should decrease to 7.5 times in 2026 and further to 6.2 times in 2027, based on projections, indicating potential undervaluation as earnings normalise.

UK GDP growth forecasts support this optimistic outlook. The Office for Budget Responsibility projects real GDP growth of 1% in 2025, 1.9% in 2026, and 1.8% in 2027. Similarly, S&P Global anticipates GDP growth of 1.5% in 2025, 1.6% in 2026, and 1.5% in 2027. This steady economic expansion could bolster Lloyds’ core retail and commercial banking operations.

With a price-to-book ratio of 0.94 times and an enterprise value to EBIT (earnings before interest and taxation) multiple of 5.04 times, Lloyds shares appear cheap compared to their counterparts. As regulatory pressures subside and the UK economy returns to a more normalised growth trajectory, the stock may experience significant gains.

The interest rate conundrum

Lloyds faces a mixed picture in regards to the interest rate environment through 2027. The bank must balance potential challenges from declining rates while taking opportunities arising from its strategic hedging practices.

The Bank of England’s base rate, currently at 4.5%. This is projected to decrease over the coming years. Currently, most forecasts suggest a move to 3.5% by the end of the year, but there’s a lot of economic data that could influence that.

Oxford Economics anticipates a further decline to 2.5% by 2027. The group note structural factors like demographic shifts and subdued productivity growth. These projections suggest a prolonged period of lower interest rates, which could compress net interest margins for banks reliant on traditional lending.

However, Lloyds and its UK peers have proactively managed this risk through structural hedging strategies. By employing interest rate swaps to balance liabilities such as customer deposits and shareholder equity, Lloyds aims to stabilise revenues amid rate fluctuations. This approach, often referred to as ‘the caterpillar’, allows for consistent replacement of swaps, making interest income more predictable.

Personally, I’m being quite cautious during this period of volatility. However, I still believe Lloyds shares aren’t overpriced. Assuming no major hiccups, I’d expect to see the stock trading around 80p-85p. That’s based on a forward P/E of 7.5-8 times for 2027 — using the current forecast.

It has been an odd and unnerving week in the stock market. While some investors may be experiencing such turbulence for the first time, one who is not is billionaire Warren Buffett.

Buffett has experienced multiple dramatic stock market swings over decades – and used them to his advantage.

As the stock market has swung around this week, I have been bearing in mind some of Buffett’s advice about such moments – one piece in particular.

Imagine the market knocking at your door daily

Buffett got the idea from his teacher Ben Graham and it is one I think is simple, but powerful.

He talked about a person called Mr Market. Nowadays we might also say Ms Market, but here I’ll just refer to him/her as ‘The Market’.

Each day (or at least each day the stock exchange is open), it offers to buy shares from you at a certain price – or sell you the same share at a similar price.

As an investor, you can buy, sell, or do nothing. Year after year, decade after decade, you have the same option.

Here’s why this idea is so powerful

That may sound like a pretty obvious insight. In fact, I do not think so.

Consider the property market, for example. In a tough market, you may list a property for months or years without finding a buyer.

In the art market, you may want to buy a painting. But there is only one and, no matter what you offer, its owner is unwilling to sell.

By contrast, the stock market allows you to buy, sell or simply sit out the storm, as you choose.

So, just because shares tumble in price does not mean an investor needs to do anything when The Market offers a price for selling or buying.

Instead, if they think the investment case is unchanged, they can simply sit back, ignore the market noise and take a long-term view. It is no coincidence that Warren Buffett has described his ideal holding time as “forever”.

Bargain hunting, when it suits you

Equally, an investor can go shopping for bargains when The Market offers a share at a much lower price than before.

This week, I did exactly that and took the opportunity of a sharp fall in price to add to my holding in Filtronic (LSE: FTC).

Over the past year, the share price more than doubled. On a five-year timeline, it has grown over 1,000%. That is the sort of performance even Warren Buffett struggles to achieve!

It reflects the company’s sales and profits growth due to a number of deals for its specialist communication equipment, notably from SpaceX. Last year, revenue leapt 56% while a net loss the prior year gave way to a £3.1m profit.

With the potential for further orders from SpaceX – which has invested in Filtronic – I reckon the business outlook is rosy. But the share price had risen sharply to reflect that.

So, when The Market suddenly offered a much cheaper Filtronic share price this week, I bit its hand off.

The heavy reliance on a single customer is a clear risk and could mean revenues slump if SpaceX stops ordering. So I want to buy at a price I think reflects such risks. Briefly, I had the opportunity!

With a small pot of savings set aside, there are several avenues to explore passive income opportunities. One of the most effortless is investing in dividend-paying companies. It’s a hands-off approach that lets time do the heavy lifting.

While it’s not a foolproof formula, many legendary investors have successfully tapped into this method. The key lies in following a few smart strategies to help tip the odds in your favour.

Cutting costs

Taxes can take a bite out of your investment profits, so finding ways to reduce that impact is a smart starting point. For UK investors, one of the most effective tools is the Stocks and Shares ISA.

This account lets you invest up to £20,000 a year without paying tax on any gains — a powerful advantage when building long-term wealth. Best of all, opening one is straightforward, with most high street banks and a range of online platforms offering easy access.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

The strategy

A solid passive income portfolio often strikes a balance between growth stocks and dividend-paying shares. Growth stocks offer the chance for higher capital gains, while dividends deliver a more consistent income stream — each brings something valuable to the table.

And here’s where the magic happens: reinvesting those dividends can spark the power of compounding, steadily accelerating returns over time.

Smart investors tend to spread their investments across different sectors and global markets, helping to cushion against industry slumps or regional downturns. Many focus on growth stocks to begin with, often achieving between 7% and 8% returns. Even a modest £5,000 investment could snowball into around £30,000 over 20 years. 

Adding just £200 a month along the way, and the pot could swell to £166,000 in that time. Shifting that into a portfolio with an average 7% yield would return yearly income of roughly £12,000.

The sooner one starts the better — imagine what it could deliver after 30 years?

What to look for

When building a portfolio for passive income, it’s important to consider where a company may be in 10 or 20 years. Will there still be demand for its products or services? Does it have a long history or reliable management? Is it in an industry with a sustainable future?

Consider British American Tobacco (LSE: BATS), a company that’s built a reputation for consistently delivering reliable and generous dividends. Even during challenging economic periods, it maintains a strong commitment to rewarding shareholders.

It has a consistently high yield, which, over the past 12 months, has fluctuated between 7% and 10.4%. Plus, its share price is up 35% in the past year, which is unusually high growth for a dividend-focused stock.

But its earnings have been volatile lately, with a £15.8bn loss in 2023 offset by a £2.73bn gain in 2024. It also faces significant risks from regulatory and legal challenges to smoking, most recently a £6.2bn charge in Canada. These challenges mean the company has an uncertain future. 

For this reason, it’s an example of a company that isn’t ideal for a long-term investment strategy. For that goal, it may be wiser to consider more sustainable dividend-paying companies like Aviva, HSBC, or National Grid.

Aston Martin Lagonda (LSE:AML) shares have continued to make headlines over the past two years. Investors were sold a fairly smooth path to profitability, but that simply hasn’t been the case.

In 2024, the company reported a pretax loss of £289.1m, widening from £239.8m in 2023. This was reported alongside a decline in revenue by 3% to £1.58bn. It was a painful year for the iconic carmaker, as wholesale volumes also fell 9%, reflecting supply chain disruptions and weaker demand in key markets like China.

Despite these setbacks, Aston Martin managed to achieve a rare positive cash flow in the final quarter of 2024. New product launches and improved sales of high-margin models drove this achievement.

Failing to impress the market

The company’s share price has mirrored its financial struggles, plummeting by over 96% since its flotation in 2018. As of April 2025, shares are trading near their 52-week low of 56p, down significantly from their year-peak of 172.8p in April 2024.

Rising debt levels, which ballooned to £1.16bn at the end of 2024, have compounded Aston Martin’s challenges. To address these financial woes, the company has cut jobs and scaled back production plans. Additionally, it has received continued financial backing from Lawrence Stroll’s Yew Tree Consortium, which recently increased its stake to 33% through a £52.5m investment.

Another promise

In 2023, Aston Martin Lagonda set ambitious financial targets as part of its turnaround strategy. Executive Chair Lawrence Stroll planned to achieve £2bn in revenue and £500m in adjusted EBITDA (earnings before interest, taxation, dividends, and amortisation) by 2024/25.

Initially, these goals were tied to selling 10,000 vehicles annually. However, CFO Doug Lafferty later expressed confidence that the company could meet these objectives with just 8,000 units per year.

However, this just hasn’t happened. The business is still making promising though. New CEO Adrian Hallmark has outlined plans for a “materially improved” financial performance in 2025, with expectations of positive adjusted EBITDA and free cash flow in the second half of the year. The launch of the Valhalla, Aston Martin’s first mid-engine plug-in hybrid, is expected to play a crucial role in this turnaround.

Now, the group plans to achieve revenue of £2.5bn and adjusted EBIT of £400m by 2027/28. However, given its historic struggles, it’s unclear whether it can acheive these targets.

High risk, high reward

I had previously been an investor in Aston Martin, but it’s not for me anymore. Aston Martin’s journey remains fraught with risks. What’s more, the company ships around 2,000 vehicles to the Americas on average. Trump’s tariffs put these numbers in peril. Finally, while management is taking steps to stabilise operations and improve profitability, the company’s long history of financial troubles and increasing reliance on external funding are huge concerns. I do think it’ll survive the year, but it needs a turnaround to guarantee its future.

There are lots of different ways to try and earn passive income, some more passive and income-generating than others.

The approach I use is to buy shares in proven blue-chip companies that pay dividends. With the stock market experiencing a lot of turbulence over the past couple of weeks, buying such shares now could prove more lucrative than just a short while ago.

With a spare £9,000, someone could use this approach to target a monthly passive income of £490 on average.

Here’s how!

Share price and yield are connected

How much passive income a share earns depends on two factors – the size of the dividend per share and what someone pays for that share.

For example, if a share pays a 5p dividend annually and an investor buys it for £1, the yield is 5%. But if that price halves and the investor buys more shares, he will earn a 10% yield for those shares even though the dividend per share is the same.

So, when the stock market pushes share prices down – as happened for many shares at some point this week – it can offer the opportunity of earning a higher yield.

Look out for the risks, not just the rewards

That presumes the dividend is maintained, which is never guaranteed. A tumbling stock market can reflect City nervousness about how businesses are set to perform. If they do badly, they may cut or even cancel their dividend.

To try and manage that risk, an investor ought to diversify their portfolio. And £9,000 is ample to do that.

It is also important to focus on buying into quality companies at an attractive share price and only then consider the yield, rather than just investing in high-yield shares without properly understanding them.

One share to consider

For example, asset manager M&G offers a 10.9% yield. But that alone is not why I think investors should consider it.

While M&G aims to maintain or grow its dividend per share each year, it may not. It has been battling with investors pulling more money out of its core business than they put in. A nervous stock market could exacerbate that trend, hurting revenues and profits.

However, I think it has some helpful tools in its arsenal.

It operates in a large market with resilient customer demand and has a customer base in the millions. It has a strong brand and a business model that has proven excellent at generating surplus cash, the stuff of which dividends are made.

Taking the long-term approach

My example presumes a lower average yield than M&G’s 8.5%.

That 8.5% is still well over double the FTSE 100 average, but I think it is achievable in the current market, where some blue-chip shares have tumbled in price. Indeed, the M&G share price is almost a fifth cheaper than at its high point last month.

Reinvesting dividends (known as compounding) can boost passive income streams for the long-term investor. Compounding £9k at 8.5% annually for 25 years, for example, should produce £490 of dividends per month.

A shorter timeframe could still work, although the target income would be lower.

Either way, a useful first step would be identifying a suitable share-dealing account or Stocks and Shares ISA through which to invest the £9k.