My top FTSE 100 buys for the £20k Stocks and Shares ISA allowance
Stock markets are uncertain again and the FTSE 100 index closed lower by 1.1% yesterday. On its own, a single day’s decline is not necessarily a big deal, but it does reflect ongoing nervousness among investors.
How I’m investing via my Stocks and Shares ISA now
So when I think of my Stocks and Shares ISA investments for the remainder of the year, or even the next tax year, I have one idea in mind. My focus will now be on dependable, long-term FTSE 100 investments. I have already invested in stocks that are either cyclical in nature or are recovery plays. These stocks should be capable of giving me great returns during good times, but they are equally likely to falter during bad times. And since we are still in an uncertain period, I would now like to shift my attention towards stocks that have a history of long-term returns.
As such, I have zoomed in on two FTSE 100 stocks that I believe could be good to hold in the long term. And they could also balance out the ongoing fluctuations in my current investment portfolio. Since they have given good returns over time, I reckon that the Stocks and Shares ISA is a good wrapper for them, because it gives me tax relief on capital gains.
2 FTSE 100 stocks I like
The first of my picks is the industrial equipment rental company Ashtead. A lot of its business comes from construction, which is a cyclical sector. In fact, the latest numbers on the UK economy show that the construction industry actually shrank in October from the month before.
But I still like the stock. This is because majority of its business is derived from the US, which has a huge infrastructure plan in place. A boom in the industry could keep demand for industrial equipment rental strong. Also, its long-term share price chart is encouraging. Over the past decade, it has been more on the rise than not. It has been growing and has given investors some rich returns. Its latest results are also encouraging and suggest that the future looks bright.
I also like speciality chemicals manufacturer Croda International. It works with a variety of sectors ranging from personal care to industrial chemicals and life sciences. This makes it somewhat slowdown-proof, I feel. And its results show that as well. It has been doing quite well, and there is no indicator I can see that says the future will be different.
It is quite pricey though, with a price-to-earnings (P/E) ratio of 58 times, far more than Ashtead (which is at 28 times). Also, it goes without saying, that the future could look very different from the past. This is especially so, if the virus situation gets worse, Ashtead in particular might take a hit. But even Croda International might not come out completely unscathed by, say, another round of lockdowns.
I would not give into these fears though. In fact I might just invest the entire £20k allowance for the next tax year in my Stocks and Shares ISA in these two stocks.
The post My top FTSE 100 buys for the £20k Stocks and Shares ISA allowance appeared first on The Motley Fool UK.
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Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Croda International. 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.