The Stocks and Shares ISA deadline has now passed. So I’ve got just under a year to invest up to £20,000 in the best UK shares. I want to buy some now, to kick off the ISA year. But I don’t need to worry about buying shares with the full sum right away. Any of the shares I buy within the next year count for my 2021/22 ISA. This means that if I sell the stocks in the future, all gains are free from capital gains tax.
Finding the best UK domestic shares to buy now
Let’s say I want to average-in my purchases for my ISA over the next 11 months, spending an average of £1,800 a month on the best shares to buy at the time. Kicking off for April, what should I be looking at?
Personally, I’d look to buy domestic shares to benefit from what I think could be a really strong economic bounce-back in H2. I’m looking to play out this theme with UK housebuilders such as Taylor Wimpey and Persimmon.
I think that housing should see a continued boost (it’s already done well in the past six months) as lockdown continues to ease and people feel comfortable moving. Both of the above companies have impressive forward order books for this year anyway. This highlights to me that the outlook is already looking promising. As such, I’d say this sector has got some of the best shares to buy now.
The risk of buying homebuilders is the potential impact of the stamp duty holiday ending. It’s been running since last July and is due to end in a couple of months. The ending will see higher costs for buyers, and may see a slight wobble in demand.
Getting value from miners
Another area in which I’d be seeking the best shares to buy now would be the mining industry. After a stellar run in 2020, gold and silver have retraced lower in recent months. For example, the gold price jumped above $2,000 an ounce last summer, only to find it trading around $1,780 now.
I think that the slump is nearly over, primarily because I think inflation globally is going to start to increase rapidly. This is due to all the financial stimulus that has been pumped into the world economy. High inflation should attract investors back to gold, as a store of value.
I’d look to play this through buying mining shares now such as Rio Tinto and Polymetal International. My personal preference of the business and how much exposure I want to have to gold itself will impact which one I buy.
The risk with mining companies is that they don’t always track the price of precious metals via the share price. There’s also additional company-specific risk. So even if gold rallies, if the company suffers operational problems, it might hinder any share price gain.
But on balance I think that some of the best shares to buy now are within the domestic UK space and mining.
