Business

Buy a deal and be a patriot … why it’s time to invest in Britain

The best of the British: there are signs that stock prices may be more stable in the coming months

Investors in the UK stock market have been going through hard times in recent years, but there are signs that stock prices here may be more stable in the coming months.

While every stock market has suffered from the horrific events in Ukraine, London has stood relatively firm. For example, the US market this year fell by almost 6 percent compared to the fall of the British FTSE100 by 0.76 percent.

The reason? Stocks of the old economy – such as financial, energy and mining companies – withstand storms better than technology companies. And it is these businesses that dominate the UK market.

Russ Mold, investment director of the AJ Bell investment platform, says investors should think about the number of private investment companies looking at the UK market. “If buyers of private stocks believe there is value here,” he says, “then perhaps investors should take a tip.”

Jason Hollandes, managing director of the investment platform BestInvest, says he is “firmly in a position to buy a British camp”, arguing that the market has been in the cold for too long.

He says that “although not shouting”, British stocks look better than stock markets in other developed countries, especially in the United States. He is also pleased with the dividends paid by British companies.

He adds: “When times are uncertain, stock prices are volatile and inflation is rampant, regular dividends are attractive, providing an element of predictability. The UK remains the main market for dividends recovering from the reduction caused by Covid in 2020. ” Profit-seeking investors can expect dividends averaging 4 per cent of UK stocks.

While investing in an investment fund that tracks the FTSE All-Share Index, or FTSE100, is one way to get UK stock risk, there are some stocks that can be attractive. Richard Hunter, head of markets for the investment platform Interactive Investor, likes Diageo, a beverage company that owns brands such as Smirnoff and Guinness.

He says: “Much of the company’s growth comes from Asia, where the new middle class is attracted by premium drinks. In the United States, their largest market, it has benefited from the more demanding tastes of alcohol. ”

Hunter believes a 8% drop in stock prices this year could be an attractive entry point for investors. He also likes Whitbread, which owns the Premier Inn hotel brand and also operates in Germany.

Although he says Whitbread still has problems to deal with – inflation, supply chain problems and still reduced numbers of foreign tourists visiting the UK – he says demand for hotels from traders proved resilient, and any return to normal life should provide a “big boost to profits.” This year, shares of Whitbread fell 13 percent.

Get a £ 100 voucher for a new Isa

This is money that readers can use exclusive offer from AJ Bell Youinvest and get a £ 100 voucher to spend on leading names including John Lewis, M&S and Odeon.

Readers who open new shares and shares of Isa from AJ Bell Youinvest using our exclusive offer, and fund it for £ 10,000 or more, the platform will receive a prize voucher.

> Find out more about AJ Bell Youinvest Isa

Capital is under threat. The rules of tax and Isa apply. Conditions apply

Investing in a UK investment fund managed by an expert manager will help spread the risk. It could also give an investor more impact on the UK economy than a fund that tracks FTSE100.

This is because many of the leading FTSE companies are globally oriented. In contrast, most small listed companies are focused on the UK. Dmitry Lipsky, head of Interactive Investor’s fund research department, loves the R&M UK Recovery Foundation.

He says: “He is investing in renewable stocks – good companies that are currently making profits below the norm, which lowers the value of their shares.” Over the past three years, it has brought in 25 percent profit, and Lipsky says manager Hugh Sergeant has an impressive experience. He also likes Diverse Income, an investment trust that invests in UK companies with a bias towards medium and small UK companies.

He says: “This focus sets trust apart from the crowd, as most other UK equity funds and investment funds tend to have higher weights in large firms.” The trust provides an annual income of about 3.5 percent. Over the past three years, the yield has been 24 percent.

Hollande likes the Artemis UK Select Foundation, which also targets undervalued growing companies. A third of the fund is in financial companies, with Barclays ’share of its largest bank being 4.6 percent. Over the past three years, the fund’s profits have been 40 percent.

James Cartier, head of investment companies in the financial research business QuotedData, says it may now be time to bag a proven fund that has suffered from short-term performance problems.

He says investors should look at such small companies Montanaro UK, BlackRock Throgmorton and JPMorgan UK Smaller Companies. The Montana stock market trust has recorded losses of 8 percent over the past year, but has made a 33 percent profit over the past three years.

Top holdings include the Big Yellow self-storage group, the 4imprint promotional products firm and the DiscoverIE electrical components industry group.

Blackrock Investment Trust has risen 47 percent in three years but declined 2 percent this year, and JPMorgan UK Smaller Companies – also listed on the stock – rose nearly 51 percent in three years but fell 2 percent in one year. “These are all trusts with a good pedigree,” adds Cartier.

WARNING … DON’T MAKE IT ALL TO THE UK

No matter how you decide to invest in the UK plc, it’s important to make sure you don’t have all your eggs in the UK market.

The UK stock market currently accounts for less than 5 per cent of the world’s valued stock, “said Juliet Sculing Latter, research director at Chelsea Financial Services. the fact that most British investors probably own more than 5 per cent as a result of the country’s bias, they should not stray too far from that figure. Diversification is key. ‘

Investment experts also say that it makes sense for investors to “stress test” their portfolios – to model how they are likely to behave in different scenarios.

AJ Bell’s Mold says that while value can be found in the UK market, there is also great unpredictability. He adds: “One thing you can’t do is chase after what’s been good lately and throw away what’s been done badly.

Stress testing your portfolio will allow you to see what different outcomes can mean for your investment. ” Portfolio stress testing is not easy, but there are tools available from Money to the Masses (moneytothemasses.com) and Aurora DIY Investing (auroradiyinvesting.com).

Some of the links in this article may be affiliate. If you click on them, we can earn a small commission. It helps us fund This Is Money and keep them free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

Buy a deal and be a patriot … why it’s time to invest in Britain

Source link Buy a deal and be a patriot … why it’s time to invest in Britain

Back to top button