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.
This can sometimes make investing seem like a daunting prospect but the good news is that it isn’t as tricky as it looks once you’ve done some research.
When searching for the best shares to buy now, UK investors can take advantage of expert investment advice 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.
While 2021 is almost over and the holiday season is fast-approaching, it’s always worth keeping your investments in the back of your mind. Here are some stocks and shares you may want to keep an eye on during December 2021.
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.
1. Advanced Micro Devices (AMD)
Advanced Micro Devices (AMD) look to be rounding out the year strongly, with Google Finance data showing that they hit an all-time high stock price of $157.80 on 24 November.
The semiconductor company had a strong showing through the pandemic and are expected to play a key role in the adoption of artificial intelligence (AI) thanks to their advanced GPUs and server processors.
They are crucial in the continued function of AI supercomputers and are expected to play a key role in the new Meta platform (previously Facebook) and the development of the “Metaverse”.
Meta is expected to invest $10 billion to boost Metaverse capabilities in 2022, which could be huge for AMD over the next few years.
Source: Motley Fool
The e-commerce giant Etsy, that focuses on promoting self-employed artists and creators, suffered in the summer as parts of the world began to reopen and high street shopping became popular once more.
However, Etsy share prices have continually risen since, reaching their highest ever point in November 2021. Their three-year sales growth rate is +61.1%, and their three-year earnings growth rate is at +92.4%, with a 2021 year-to-date performance of +29.7% as of 18 November.
Source: Yahoo! Finance
3. Intel Corp
Intel are one of the pioneers of the computer component industry. They design and manufacture a range of key computer components, but are mostly known for their processors, chipsets, and memory units.
While they have had a turbulent year, their share prices are currently comparatively low, having suffered a 12.5% reduction in share price over the last six months alone.
However, Intel’s ability to design for both traditional and emerging computer technologies, including the cloud, 5G networks, and artificial intelligence (AI), sets them up for the possibility of a strong recovery.
They are also entering a partnership with Google Cloud which may boost their long-term success.
4. Intertek Group
Intertek are a testing and quality assurance firm who are at the heart of navigating the ongoing supply chain issues in the UK.
Due to their involvement in the correction of these issues, Intertek have reported revenue growth above expectations for the July to October 2021 period. It was also the FTSE’s leading company for dividend progression between 2003 and 2019.
While the pandemic has halted their momentum momentarily, it is thought that the quality assurance market will grow at a faster rate post-Covid. And, with stock prices climbing steadily through October and November, it looks as though their recovery is already well underway.
Source: Interactive Investor
5. Ion Geophysical Corp
Ion Geophysical is an exploration and production firm in the oil industry. However, as they are a data firm, they have comparatively low fixed costs. This means that they do not have the same expensive outgoings as other oil stocks.
The average target price is $4.57, but stocks in Ion Geophysical are selling for between $1.60 and $1.90 as of 25 November. As a result, expert analysts believe that it may have the opportunity to deliver good returns.
It is worth noting that Ion Geophysical is a penny stock, and as such may be a high-risk investment.
6. Lucid Group Inc
Lucid Group are an electric vehicle manufacturer who are benefiting from increased demand.
Share prices in the company have risen steadily for the last few months, reaching an all-time high of $55.18. Lucid Group recently reported positive Q3 earnings and confirmed plans to build 20,000 new vehicles next year.
If the electric vehicle boom continues, this may be one to watch for the future.
7. Pets at Home Group
Lockdown resulted in a surge of pet ownership throughout the pandemic, and the pet care giant Pets at Home have reaped the rewards.
The company’s half-year results show an 18% growth in revenues, with underlying profits up 77.2%.
With the need for pet supplies high after lockdown, and ongoing services such as pet care continuing to thrive, Pets at Home may be worth keeping an eye on.
Currently, their share price is slightly lower than their September peak of 518p. Even so, the risk of further Covid-19 measures in the UK may result in another, smaller boom in pet-related needs.
Source: Interactive Investor
8. Starbucks Corporation
Possibly the most popular coffeehouse in the world, Starbucks posted record levels of revenue in their fourth fiscal quarter report in October and has just declared a quarterly cash dividend of $0.49 per share.
Though stock prices have remained mostly between $110 and $120 a share since April, Starbucks recently partnered with Amazon, one of the largest companies in the world.
Through this partnership, Starbucks have just opened their first cashier-less branch in Manhattan and are looking to explore and grow this venture into the future.
9. TAL Education Group
TAL Education are a Chinese tutoring company registered on the New York Stock Exchange. TAL saw a dramatic reduction in share price earlier this year, from highs of $89.86 in February, to just $3.84 in mid-November.
Even so, TAL may already be on the road to recovery, as the stock reached a price above $5 in November for the first time since September. This comes after strong showings from the Chinese stock market and reports that China plan to issue licences to after-school tutoring companies.
10. Xpeng Inc
Rounding off this month’s list is another electric vehicle manufacturer, this time based in China and registered on the NYSE.
Xpeng mostly make sedans and SUVs, the likes of which have caught the attention of the tech-savvy Chinese middle class.
The company also develops their own driver assistance system and car-intelligent operating system, both of which are used in their new G9 model, set to launch in 2022.
Xpeng have seen their stock rise by more than 65% since May, reaching a price of around $54 as of 24 November.
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.
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 stocks and shares and keep an eye on 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.
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:
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.
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 pay the best 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 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, 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:
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.
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.
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:
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.
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 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.
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.
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.
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 stocks that can grow your wealth.
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.