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Best Stocks and Shares to buy now in August 2022

If you’re getting involved with investing in the stock market, it can be easy to be overwhelmed by the sheer amount of choice that you have when buying stocks. There are so many possibilities with different advantages and disadvantages that it can be hard to choose.

When searching for the best shares to buy now, UK investors can take advantage of expert investment advice I have researched, which can help you to make properly informed decisions when they want to buy stocks and shares.

If you want to be able to invest with confidence, read on to find out some of the best stocks to consider in your portfolio right now.

Also consider: Compare UK trading platforms to buy shares

Remember: this list is not a personal recommendation and does not constitute financial advice. Do not buy these investments solely based on what you read in this article.

Top 10 shares to buy now in August 2022

After a turbulent Q2, you may be wondering what investments to consider for Q3. So, here are 10 stocks and shares that experts are watching for August 2022.

Please note: these picks are not personal recommendations or financial advice. Do not buy these investments solely based on what you read in this article.

Amazon logo

1. Amazon

One of the biggest companies in the world and dominating the online shopping industry, Amazon is a giant that many think will continue to grow.

Originally pioneering online delivery services, Amazon’s expansion into the multimedia market with streaming service Prime Video is a good indicator of its intentions to disrupt other sectors outside online shopping.

Amazon is no stranger to hard times. In the years 2011, 2014, 2016, and 2018 the company saw at least a 25% loss in share value, indicating that low prices are usually meant for buying.

Now that its share price currently rests just above prices of 2018, opening at $134.90 on the morning of 29 July 2022, this may be the best deal for Amazon shares in four years.

Source: Kiplinger

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Chipotle Logo

2. Chipotle Mexican Grill

Chipotle is a fast-food chain, having started in the US in 1993 and expanding to the UK in 2010. 

Chipotle’s share price has weathered many storms. After drops of 47% in 2012, 65% between 2015 and 2018, and a 55% drop in 2022, Chipotle is still up around 189% over the last 5 years – indicating that drops in value aren’t necessarily long-lasting. 

This has culminated in a share price of $1,543.88 as of market open on 29 July 2022.

On top of this, sales and earnings figures remain positive. This may lead to further growth and could leave investors with a taste for more.

Source: Forbes

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Dell logo

3. Dell Technologies

Information technology giant Dell is a well-renowned company that benefits from years of professional operation. It specialises in cloud technology, software, hardware, and data centre infrastructure.

Dell boasts a robust workforce of 32,000 employees in sales and a further 35,000 employed as support officials. Complementing this, its “infrastructure solutions” and “client solutions” operations achieved record first quarter revenue.

Welcoming a 15.6% increase in revenue year-over-year, Dell could be hardwired for continued success.

Dell shares traded for $44.51 when the New York Stock Exchange opened on 29 July 2022.

Source: Investopedia

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GoDaddy logo

4. GoDaddy

GoDaddy provides businesses with web domains and hosting services, helping to connect companies with customers.

Operating with a subscription system, GoDaddy has over 21 million customers with 84 million domain names, overseen by more than 9,000 employees.

After hitting $48.71 in a brief market crash caused by the Covid-19 shutdown in March 2020, its lowest price in four years, GoDaddy has grown to $70 since then. This could hint that the value of hosting services may have risen since the pandemic.

As of March 2022, its revenue was up 11.3% year-on-year, showing that GoDaddy may prove to be a good site of investment.

Shares traded for $72.83 at market open on 29 July 2022.

Source: Investopedia

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Lloyds Banking Group logo

5. Lloyds Banking Group

One of the UK’s “big four” banks, Lloyds is a well-known high street banking and mortgage provider.

As interest rates have risen and with potential for this to continue, Lloyds could benefit from a higher rate of return as mortgage borrowers may find themselves paying more in interest on their home loans.

Adding to Lloyds’ case for success is the group’s commitment to pursuing digital banking services, which some have rightly argued could drive new customers towards them while reducing costs.

Lloyds may present itself as a reliable choice when investors consider its strong financial backing, having a CET1 ratio – a stockpile of cash kept for emergency measures and crisis prevention – of 14.7%, well above their target of 12.5% as well as the legal requirement.

With cash in the bank and market conditions looking favourable for mortgage lenders, Lloyds could be one to bank on for solid returns.

Shares opened at 45 pence as of the morning of 29 July 2022.

Source: interactive investor

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Natwest logo

6. NatWest

Headquartered in London, NatWest is a well-established bank and a household name across the UK and Ireland.

Being the smallest of the UK’s “big four” banks, NatWest strikes a good balance between potential growth and reputability, serving around 20 million customers and businesses.

NatWest could also benefit from the increase in interest rates – especially if they continue to rise, as many analysts have suggested they might.

At market open on 29 July 2022, NatWest shares traded for £2.50. Interestingly, analysts at Jefferies argue that current earnings haven’t priced in the effect of higher interest rates, meaning the current price could be an undervaluation.

Source: eToro

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Petrofac logo

7. Petrofac

Petrofac is a company that designs, builds, manages, and maintains energy infrastructure networks around the world.

The calendar year started well for Petrofac, seeing two contracts valued over $200 million secured in two successive months between April and May. Consistent business such as this could do much to support the company’s revenue while keeping investors confident.

Something that may add fuel to Petrofac’s fire is their recently announced “new energy team”, introduced to focus on the renewable energy sector. With this development, the ability to explore cleaner energy solutions could provide Petrofac with exciting new opportunities.

Shares cost £1.10 when markets opened on 29 July 2022.

Source: eToro

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Roku logo

8. Roku

Video-streaming service Roku has seen success with the rise of streaming sites.

Indeed, this success is reflected in the company’s share price, rising from $120.95 in January 2020 to $389.03 in January 2021. In fact, 2017 to 2021 saw a 40% compound growth rate in revenue, growing from $512 million to $2.76 billion.

Recently, Roku announced an agreement with American superstore Walmart to provide an innovative shopping experience via video. Bringing the customer one step closer to buying their favourite products through their television, this partnership could see Roku’s value increase as the business becomes a useful marketing tool.

Laura Martin, analyst at Needham, echoes this when arguing that “streaming wars will be won by ad-driven business models” while Roku is in her words, “100% ad-driven streaming”.

Roku shares opened on the Nasdaq at $66.10 on 29 July 2022.

Source: Kiplinger.com

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Scottish Mortgage logo

9. Scottish Mortgage

Operating as an investment trust, Scottish Mortgage has been seeking investment opportunities for over 100 years.

Initially exploiting a credit crisis to help fund rubber planters in Asia to produce tyres for Model T Fords, Scottish Mortgage has remained with a global perspective in its efforts to seek out emerging foreign markets.

Its share price has almost halved since its all-time high of £15.28 in November 2021 to just £8.52 as of 29 July 2022. At these prices, this could make shares a good deal for those seeking to add Scottish Mortgage to their portfolio.

Controlling around £19.5 billion in assets as of 30 September 2021, Scottish Mortgage may be one to trust in.

Source: interactive investor

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VISA logo

10. VISA

As a leader and pioneer of the digital payments industry, it’s almost impossible to escape the Visa logo at any till or card reader. With their strong reputation in digital payments, Visa has secured itself global recognition.

Making its revenue mainly from fees on transactions and payments, Visa is shielded from the worst effects of volatile interest rates. This is because processing payments and data requires no external products that are at the mercy of inflation, thus avoiding increases to their operating costs. This could make Visa a beneficial addition to your portfolio in the face of fluctuating rates.

Analysts from FactSet predict Visa’s earnings to grow 17% year-over-year and revenue to increase by 15% to a total of $7.076 billion.

As of 29 July 2022, Visa shares opened at $212 on the New York Stock Exchange.

Source: Investor’s Business Daily

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4 quick steps to buying shares now

1. Choose a stockbroker or investment platform

Find a stockbroker or trading platform that has the right services or good fees and commission rates for what you want to buy, like eToro which charges 0% commission on buying stocks.

Then simply apply to open an account online. You will need to input your personal information and you may also need to upload your ID, such as your driver’s license, to the site to prove your identity.

2. Deposit funds

Next, deposit funds into your account. Remember to only deposit as much as you can afford (and potentially lose), and to never invest money you need for paying bills or living your daily life.

3. Do your research

Once you’re set up on a platform, do your research. Read around expert opinions of the best UK stocks (and US) share prices and keep an eye on the stock market news to make informed investment decisions.

4. Buy your shares

Finally, you can start buying shares. Remember to keep a close eye on your portfolio so that you can make changes to your holdings as necessary.

What do I need to buy shares now?

If you want to get started with investing, there are several ways that you can go about it and this typically depends on what you want to buy.

For example, with many stocks and shares, you can typically buy and sell them online through a variety of different apps and platforms. However, with some assets, you may need to work with a professional, such as an online stockbroker.

Here are some of the things that you’ll need to get started:

Cash

As obvious as it sounds, one of the most important things you’ll need to get started is an initial start-up pool of capital. The amount of money that you start with can be important as it may affect not only what type of investments may be suitable for you but also your tolerance to risk.

Please note that if you’re considering taking out a loan to boost your starting capital, this can be considerably risky and you may benefit from seeking professional advice (such as from a credit broker) before you do so.

It’s also important to note that some investments and investment platforms also have a minimum deposit that you have to make.

Tolerance to risk

The second thing you need to have before you start investing is a solid understanding of how much risk you are willing to take with your money. This can be important as it helps to determine whether a buying opportunity is right for you.

One of the main things that can help you here is to ask what your “investing horizon” is. Essentially, this is how long you’re willing to invest for.

If you’re willing to invest for a long period (such as five or ten years) then you can afford to take greater risks as you can overcome periods of short-term market instability. For example, if a portfolio contains stocks and shares from retail stores, even though they have suffered due to supply chain worries, in the long term they may still see strong growth.

Accurate information

Google finance stock market information

The final thing that you’ll need before you start investing is accurate stock market information, to ensure that you don’t lose money when trading. This is why many funds employ a research team, as if you want to maximise your chance of making a return on your initial investment, it’s important to be aware of current market conditions.

For example, it isn’t always best to simply invest in the biggest companies, as they may not fit with your investing strategy. If you’re building a portfolio with passive income in mind, they may not be the best stocks paying dividends.

Of course, it’s important to note that while many retail investor accounts lose money when trading, being informed can help you to minimise this risk.

Is now a good time to invest?

When it comes to getting started with investing, as the old saying goes, there’s no time like the present.

If you fill in your search bar on Google and check the stock market news, it’s easy to be disheartened by headlines involving economic uncertainty and global disruptions. For example, you may have seen that the recent speculation over interest rates rises may affect the performance of companies in the financial services market.

You may be concerned that even if a UK company demonstrates strong revenue growth due to the worldwide economic recovery, it can be hard to shake the concern over whether its share price will return to pre-pandemic levels. However, it pays to take a long-term approach to these things.

If you’re concerned about short-term disruptions, such as the coronavirus outbreak, affecting your investments then the good news is that it’s the long term that matters most. While there are fluctuations, markets historically tend to rise over time.

As long as you have a reasonable time horizon, your portfolio should be able to recover from any losses and see a profit.

How long should I invest for?

When it comes to investing, “time in the market, not timing the market” is one of the golden rules. When you do your own research into investing in UK stock, you may notice that many investments are described as long-term commitments.

The longer you invest, the greater your potential for making a profit. So, if you want to mitigate your exposure to risk, you may want to leave your money invested for at least five years.

How can diversifying my assets help me?

If you want to minimise your exposure to risk, one of the best ways to do this is by diversifying your portfolio. Essentially, this is the art of not putting all of your eggs in one basket.

By spreading out your assets over a range of different sectors, asset classes, and often physical locations, you can reduce your portfolio’s exposure to risk. This means that if there’s a market crash in a particular economic area, the impact on your portfolio will be limited. Furthermore, gains in other sectors may even make up for a loss.

For example, during the initial lockdown in 2020, there was significantly less traffic on the roads and many jobs had to be put on hold. This meant that there was a much lower demand for fuel and so oil prices fell sharply.

If you had heavily invested in an oil company, you would have lost a lot of money. However, if only a part of your portfolio was held in such companies, your loss would have been limited.

What are some risks I need to be aware of?

Whenever you invest, it’s important to be aware that no matter how well-informed you are, there is always the risk of losing money. Even if a specific stock seems like a good investment, stock market fluctuations can mean that you never fully know how an investment will perform.

For example, future disruptions in the supply chain could impact the stock price movements, but you would have no way of predicting this. This is why it can be important to have a reasonably long investing horizon so that you can ride out any difficult periods.

Since investing carries a large amount of risk, it’s important never to commit more money than you would be willing to lose. Of course, if you want to minimise this chance then it can often be beneficial to seek independent advice when dealing with financial matters

What do I need to know about tax?

While it’s important to be wary about the risks that come with investing, it’s also important to be aware of the consequences of success. Investing can be a great way to grow your wealth and build a strong portfolio to provide you with an income.

However, if you invested in a successful company registered in the UK, when you come to reap the rewards of your decision, your net income could rise significantly. If this is the case, then there may be tax implications to consider. This can eat into your wealth so it’s important to stay aware of any potential pitfalls.

What is Capital Gains Tax?

One of the most significant issues that you may run into is Capital Gains Tax (CGT). Essentially this is a tax that you have to pay when you dispose of (such as selling or gifting) your assets. Typically, if you make a profit on them, you have to pay a portion of your newfound gains in tax.

Each year you have an allowance called the “Annual Exemption”, which is basically how much profit you can make through capital gains in a given year before you have to pay tax. In the 2021/22 tax year (6 April to 5 April) this stands at £12,300, so you can still make a fairly large amount of money before running into any tax issues.

After this point, the amount that you have to pay is determined by your marginal rate of Income Tax:

Basic-rate taxpayer

If you’re a basic-rate taxpayer, you typically have to pay CGT at 10% on any profit you make above your allowance.

Higher- and additional-rate taxpayers

If you’re a higher- or additional-rate taxpayer then you typically have to pay CGT at 20% on any profit that you make above your allowance.

Example

A useful example of this can be found on the government website if you’re still unsure how it works:

Your taxable income (your income minus your Personal Allowance and any Income Tax reliefs) is £20,000 and your taxable gains are £12,600. Your gains are not from residential property.

First, deduct the tax-free allowance from your taxable gain, which in this case is £12,600 minus £12,300. This leaves £300 to pay tax on.

Add this to your taxable income. Because the combined amount of £20,300 is less than £37,500 (the basic rate band for the 2020 to 2021 tax year), you pay CGT at 10%.

This means you’ll pay £30 in tax.

Are there ways to invest without having to worry about CGT?

Since tax can eat into your profits, it’s understandable why you might want to minimise how much you have to pay. Thankfully, there are ways that you can overcome this.

There are some assets where gains are not taxed, such as UK government gilts. However, another useful tool to mitigate tax is investing in a Stocks and Shares ISA. The main benefit of these is that they are a tax-efficient way to invest as money contained within them is entirely free from Income Tax and CGT.

This means that any growth on investments in a Stocks and Shares ISAs is free from CGT. This can be a valuable way to cut down your tax bill.

How do we decide which shares are the best ones?

While you may agree with many of our share choices, you may also wonder how we came to these conclusions as it can be important to take careful and considered investment advice. As you may well know, you should never blindly trust something you read on the internet.

If you’re curious why we chose these, here are the four essential ways that we decide which are the best shares to consider:

Market news

As you might imagine, one of the most crucial things to do when choosing investments is to keep a close eye on important international investing news.

While you can never fully predict future results, at least not without the aid of a crystal ball, researching and analysing these events can help us to identify likely market movements that could boost the value of the stock price.

While you can never be right 100% of the time, thorough research can help us to work out which stocks could perform well moving forwards.

Fundamental analysis

Once we’ve done our research on important financial events and highlighted a potential stock, the next step is to do some deeper analysis. This involves looking at a company’s recent history – such as their annual revenue, average gross profit, business activity, and whether the company pays dividends.

This can help us to get an idea of their intrinsic value and, if this is higher than its current price, this may be a sign that their stock price is undervalued by the market. These can often be sensible choices if you’re looking for future growth.

Technical Analysis

Technical analysis can also be used to find valuable investment opportunities and essentially involves looking at a stock’s recent movements (such as in the previous quarter) to determine where its price may go next. This can help us to highlight patterns such as bull runs and price reversals.

One of the main advantages of doing this method of identifying stock picks is that these patterns typically have well-defined price targets. This means that when we recommend a share to buy, we have a particular target in mind.

Analyst ratings

Lastly, while our team is made up of professionals, it never hurts to get a second opinion. This is why we often cross-check our findings with those from external analysts. If our predictions line up with theirs, we can be more confident in recommending our picks to you.

How can seeking personal advice help me?

When it comes to investing, there can be a lot of things to have to bear in mind. You need to choose the best investments for you, as well as diversifying your portfolio and managing any potential tax bills that you incur.

This can be difficult to manage and if it’s all too much, it could impact your investing performance and reduce your profits. If you want to avoid this, working with a financial advisor could be a useful option for you for personal advice on any investment decision.

One of the main benefits of working with an advisor is that they can help you to make a properly informed decision when growing your wealth, which can give you greater confidence.

They can also act as a sounding board if you’re ever unsure whether a particular investment would fit your risk tolerance. Furthermore, if you ever wanted to reassess your investing strategy regarding risk, they are in a good position to help you make an impartial decision.

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Summary

If this all seems like a lot to take in, here is a brief summary of the main things you need to know when investing in shares:

Get accurate market information

If you want to be able to invest with confidence, it’s important to be able to make an informed decision. Studying world events, market movements, and financial activity can all be useful ways of finding out which shares you should consider buying. Furthermore, make sure you use reliable sources when looking for information.

Invest for the long term

If you want to maximise your chance of making a profit and minimise your chance of seeing a loss, it’s important to invest for at least five years. Having a longer investing horizon can help you to overcome periods of market disruption.

Diversify your assets

Buying a diverse array of assets in a variety of sectors can help to make your portfolio more resistant to economic shocks. This can give you greater peace of mind to know that your wealth is continuing to grow, no matter what.

Be aware of tax liabilities

If you make large profits with you’re investing, it’s important to be aware of how much tax you may have to pay. One of the most important ones to be aware of is CGT, as this can significantly eat into your returns.

Work with an advisor

If you want to be able to invest with confidence, working with an advisor can benefit you. They can help you to manage many of the difficult aspects of the process, giving you less to worry about so you can focus on choosing which shares and stocks that can grow your wealth.

Please note:

This article is for informational purposes only and does not constitute financial advice. All contents are based on my understanding of HMRC legislation, which is subject to change.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Any prices indicated in this article will be subject to change, and the current price of any stocks will vary. We suggest you check the current price of stocks and conduct your own research.

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