Every April there is a flood of people who suddenly scramble to put money into a Stocks and Shares ISA before the annual deadline for contributions passes.
That deadline does not mean that the ISA needs to be invested – it just concerns the annual deadline for funds being contributed. But, inevitably, a lot of people turn their mind at that time to how to invest their ISA funds too.
Rather than wait, though, I am investing my Stocks and Shares ISA this summer.
Here’s why.
Valuations
Will there be a stock market crash in coming months or years?
Maybe — or maybe not.
I do think gathering storm clouds in the global economy could spell trouble for the markets. But trying to time a crash is a fool’s errand. Market timing is ultimately no more than speculation.
What I can do, however, is look at the current valuation of shares and ask whether I think they are a bargain relative to the long-term prospects of those firms.
Bargain hunting
At the moment, I think there are lots of attractive valuations in the UK stock market.
Take one of the shares I have added to my Stocks and Shares ISA in recent months as an example: Vodafone. With a dividend yield of 11% and price-to-earnings ratio of around 7, the shares look cheap to me.
Could Vodafone fall further and get even cheaper? Of course it could. All shares can always fall further, even if they have already fallen a lot (Vodafone has tumbled 60% in five years).
But remember – I am looking for value. If I think a share offers me great value today, I would add it to my ISA now rather than waiting and hoping to buy it even cheaper later on.
Time to think
Summer is often a quiet time in the stock market as many people are on holiday.
I think that summer holidays can be a useful break that give one time and space to reflect on investment opportunities. Thinking about emerging trends and changing customer demands can help to shape one’s views on what sorts of companies might prosper in the coming years – and beyond.
Making investment mistakes can be costly. Rushing to buy shares at a busy time of year can sometimes make such mistakes more likely.
By contrast, putting aside spare time in the dog days of August to research properly and carefully consider what sorts of businesses offer long-term value at their current prices could hopefully help me make better considered choices when it comes to adding new companies to my Stocks and Shares ISA, or selling existing holdings.
That is why I think right now is a smart time to invest spare cash in my ISA. I have time to research possible purchases – and see some very attractive valuations in the current market.
The post Is now the right time to invest a Stocks and Shares ISA? appeared first on The Motley Fool UK.
However, don’t buy any shares just yet
Because my colleague Mark Rogers – The Motley Fool UK’s Director of Investing – has released this special report.
It’s called ‘5 Stocks for Trying to Build Wealth After 50’.
And it’s yours, free.
Of course, the decade ahead looks hazardous. What with inflation recently hitting 40-year highs, a ‘cost of living crisis’ and threat of a new Cold War, knowing where to invest has never been trickier.
And yet, despite the UK stock market recently hitting a new all-time high, Mark and his team think many shares still trade at a substantial discount, offering savvy investors plenty of potential opportunities to strike.
That’s why now could be an ideal time to secure this valuable investment research.
Mark’s ‘Foolish’ analysts have scoured the markets low and high.
This special report reveals 5 of his favourite long-term ‘Buys’.
Please, don’t make any big decisions before seeing them.
Secure your FREE copy
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#ffffff”, ‘color’, ‘#FFFFFF’);
})()
More reading
- Zero savings? I’d use these 3 key Warren Buffett techniques to build wealth
- My £5 a day second income plan
- Here’s how I’d aim to start earning £100 in weekly passive income
- I’m taking advantage of this rare opportunity to buy FTSE 100 stocks
- Dirt cheap UK dividend shares to buy before it’s too late?
C Ruane has positions in Vodafone Group Public. The Motley Fool UK has recommended Vodafone Group Public. 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.
