The best shares to buy now for an ISA
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I think the best shares to buy now for my ISA are those companies that may benefit from the economic recovery. However, as there’s no guarantee the UK economy will recover to pre-pandemic levels, I’m carefully picking my investments. I’m avoiding businesses with high levels of debt and no competitive advantages. I believe these firms may struggle in the years ahead.
ISA buys
Some of the stocks on my ‘best shares to buy now’ list include banking giant Lloyds. I think this lender could be a great way to play the economic recovery.
As one of the four leading banks in the UK, Lloyds’ fortunes are tied to the UK economy. Unfortunately, this means profits may fall in a downturn. But they may also recovery strongly in an upturn.
Luckily, I think the lender also has a strong balance sheet. With a capital ratio of over 15% (compared to the minimum of 8%), I think it’s well-prepared to meet any challenges the world wants to throw at it.
CMC Markets is another company on my list of the best shares to buy now. I think this business offers the best of both worlds. It’s seen profits rise over the past year, thanks to a boom in trading activity on its platforms. This is unlikely to last.
However, rising stock markets will give its core clients more cash to play with. This could help fill the gap that emerges when volatility falls. This business isn’t without its risks. Volatile markets can leave customers nursing large losses, which CMC may ultimately have to pay. This could have an enormous negative impact on the group’s profits.
Still, I’m comfortable with this level of risk. That’s why I’d buy the stock for an ISA today.
The best shares to buy
I like Lloyds and CMC, but I think the best shares to buy for an ISA today can be found in the healthcare sector.
Companies such as AstraZeneca and Hikma have fared well throughout the pandemic. I think their fortunes are only going to improve. As the world recovers from Covid, healthcare spending will likely rise to previous levels. These businesses may see renewed growth as a result. This growth would only add to their pandemic profits.
Of course, this growth isn’t guaranteed. Both companies face many trials, challenges such as regulatory and legal fights, which may impede their ability to produce and sell healthcare products. High prices of treatments may also push customers away from these firms. Especially if competitors can create generic products at a lower cost.
Still, despite these risks, I’m optimistic about the outlook for healthcare in the long term. That’s why I think these are some of the best shares to buy now and I’d add them to my ISA today.
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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Hikma Pharmaceuticals and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.