There’s actually a bit more than six months before our current annual Stocks and Shares ISA allowance runs out, though not quite seven.
But I reckon we diligent long-term investors should plan even our last-minute panics well in advance. And I wonder how many of us have come close to making half of our planned ISA investments this year yet?
I’m being a bit tongue-in-cheek here, obviously. But I do have some serious points to make.
The thing is, many of us leave our ISA plans until it’s getting perilously close to the end of the financial year. That means two things. One is that we don’t get as much cash invested as we could have done.
Earlier in the year, it’s easy to forget about it as it doesn’t seem so pressing. And we always have other draws on our finances — which is especially true this year as the cost of living is soaring.
Regular investing
But committed investors often do put away a bit of cash every month in their Stocks and Shares ISA, right from the start. And they stand a better chance of ending the year with a bigger investment pile than those who of us who prevaricate. Even when our incomes and outgoings are otherwise similar.
At this time of year, it can be tempting to think: “I’ll wait until Christmas is out of the way.” Then Christmas comes and goes, and before we know it April is just around the corner.
The other problem is, leaving it late makes investing decisions so much harder. We rush our research, and end up often not making the best choices. It also means we might have missed some great stock market bargains through the year.
Tempting buys
Right now, there are many attractive shares I’d like to buy in my ISA. I invest mainly in dividend shares, and I’m seeing some great yields around.
In fact, forecasts suggest that the total FTSE 100 dividend payout for 2022 could come very close to the all-time record of £85.2bn paid in 2018. And if I’m not in, I won’t get any.
Most of the big dividends pencilled in for this year are from stocks that are currently down in the dumps. Housebuilder Taylor Wimpey, for example, is predicted to yield 9% this year. In the depressed investment management business, M&G and abrdn are both on forecast yields of 10%.
Risks and rewards
There’s a risk that the property market is headed for a squeeze. But the UK’s long-term housing shortage makes me think the sector can provide profits for decades to come.
The investment business itself inevitably suffers during a financial and economic downturn. But the UK stock market has a habit of heading ever upwards in the long term.
I chose just a couple of sectors there, but I see plenty more attractive dividends. Each faces its individual risks and will need its own careful analysis. But the sooner we get stuck into that, the more potential benefit we could enjoy from our ISA allowance.