With the Stocks and Shares ISA deadline fast approaching (the last day for contributions is 5 April), I have been searching for the best shares to buy now for my portfolio.
Here are five shares that I would buy, intending to hold for the foreseeable future.
Best shares to buy now
I think one of the best investments on the market is Games Workshop. This tabletop gaming company has achieved solid results for its investors over the past few years. Its devoted customer base and high margins have enabled the business to generate substantial profits and profit growth. I think that makes it the perfect Stocks and Shares ISA candidate because investments held inside one of these tax-efficient wrappers do not attract tax on income or capital growth.
That said, the group’s growth is not guaranteed indefinitely. By increasing prices too much or not catering to hobbyists demands, Games Workshop’s sales could begin to fall. Still, I would buy the stock today despite these risks.
Two income investments that I believe are some of the best shares to buy now for a Stocks and Shares ISA are Phoenix group and M&G. These blue-chip stocks support some of the highest dividend yields in the FTSE 100 at around 6.5% and 8%, respectively. However, these figures are based on forecasts, and neither company is guaranteed to hit either target.
That said, I would buy the companies today for their income potential. Both organisations are highly cash generative and have substantial profit margins. This should bode well for future dividend growth.
These businesses might not be suitable for all investors, however. Financial companies like M&G and Phoenix can be challenging to understand, and we never really know what’s on their balance sheets. There’s always going to be the risk they’re involved in something neither investors, nor management understand, as many investors found out to their detriment in 2008.
Stocks and Shares ISA buy
As well as the companies outlined above, I would also buy a handful of recovery stocks for an ISA to profit from the economic reopening over the next few months and years. In my opinion, the best firms to play this theme are blue-chips IAG and BP. I would buy both of these organisations because I believe they have very different qualities.
IAG should benefit from a recovery in global air travel, although it could take several years for the industry to recover 2019 levels of activity. Meanwhile, rising economic activity generally translates into higher demand for electricity and energy. That could help BP’s recovery over the next few years.
However, these investments might not be suitable for everyone. IAG is struggling with high levels of debt, and there’s no guarantee the company will ever be able to return to its former glory. And BP faces a challenging few years as the world moves away from hydrocarbon energy sources such as coal and oil towards renewable energy.
I think the opportunities facing these businesses more than outweigh the challenges. That’s why I would buy them for my ISA today.