I’ve still got plenty of time left before the annual Stocks and Shares ISA deadline next spring. Each year I’m allowed to invest up to £20,000 into the ISA. Any stocks that I sell within the ISA have a tax wrapper, meaning that I don’t have to pay capital gains tax on my realized profits. This makes it a great tool for me to use. As we head into September, there are plenty of opportunities that I see worthy of investing my spare cash into.
Oil companies for my Stocks and Shares ISA
The first idea I’m thinking of putting into action has to do with oil. The oil price sits around $70 per barrel, and I think that the price could head higher from here. Firstly, even with some concern around the delta variant, I think oil demand will pick up as we head towards the end of the year. This should coincide with continued freedom of movement, boosting demand from aviation and haulage sectors.
Added to this is recent criticism around OPEC (the governing body of oil) and the fact that it isn’t increasing supply as quickly as it should. If supply remains low relative to demand, this should push the price of oil higher.
As a result, I’m considering buying oil related stocks for my Stocks and Shares ISA. Examples here include Royal Dutch Shell and BP. Given the nature of operations, a higher oil price should filter through as a positive benefit for these oil super giants.
One risk to my view is that the oil price might rally, but the shares might not rise. For example, tropical storm Ida has forced both companies to evacuate staff at locations around the Gulf of Mexico. The halt in production (and potential damage) could see the oil price increase, but it’s technically bad news for the companies specifically.
Buying now for long-term potential gains
The fact that my Stocks and Shares ISA doesn’t have any time limits on it allows me to take a long-term view on some stocks. For example, I recently wrote about the potential that I think exists within renewable energy stocks.
I think this is an area that hasn’t yet peaked by any means. So buying related stocks in September should give me opportunity to make share price gains in coming years if this theme really takes off.
Two examples here include Greencoat UK Wind and SSE. Both companies are well placed to be at the forefront of renewable energy, mostly via wind farms. Another reason I like these two companies in particular is that both offer dividend yields in excess of 5% currently.
One risk with renewable energy stocks is that it might take a while before gains are seen. It’s also a relatively new space that could see further evolution that the stocks I own aren’t prepared for. However, being patient and having the right investing mindset for the long run should help me not to panic.
Overall, I’m considering buying shares in all four stocks mentioned for my Stocks and Shares ISA at the moment.