If I had £1,500 to invest, here are the top UK stocks I’d buy now

With the current state of the UK economy, Jonathan Smith runs through his top UK stocks to buy from sectors including property and banking.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

One English pound placed on a graph to represent an economic down turn

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There have been plenty of interesting events moving the stock market so far this year. Good opportunities to buy the top UK stocks have arisen at times. Depending on the news (Covid-19, inflation, lockdown easing), different stocks have reacted differently. But let’s say that I’ve got £1,500 ready to invest right now. Based on where we’re at in June, where would be the best place for me to invest?

Looking at a top-down approach

Before I pick the specific top UK stocks, I need to look at a broader level. To find good value, I think I should be looking at areas that are starting to rebound already from the pandemic. The sectors that come to mind are finance, banking, travel, and property. 

I don’t have to look just at these areas, but other stocks that weren’t hit hard by the pandemic already seem to be fairly priced. In this regard, there is potentially less upside to be had in these areas.

However, the risk of targeting stocks that have suffered from the pandemic is that they might not see consumer demand return right now. For example, a company like Rolls-Royce might not be the top UK stock to buy. If the UK continues to have most countries not on the green travel list, demand for airplane engine maintenance is likely to stay low for a while.

I do accept this risk, but I’m a long-term investor. Therefore my £1,500 will stay invested for years to come. So even if demand takes longer than I think to return to some sectors, as long as I’m confident that it will eventually return, I’m ok with holding it.

Specific top UK stocks

Within the sectors I mentioned above, there are some individual top UK stocks I like. 

For example, let’s consider financial services. NatWest are a UK-based bank with a strong history. Due to the pandemic, it struggled during 2020, posting a loss of £351m. However, provisions needing to be set aside for bad debt provisions have significantly reduced. As a result, the outlook looks a lot more positive. This is one reason why the share price is up 74% over the past year. A good portion of the move happened in 2021.

Another example of a top UK stock is Rightmove. It’s the go-to online marketplace for buying and selling property. As I wrote recently, the UK property market is rallying, with prices up 9.5% over one year according to a recent survey. I think the company is best placed to take advantage of such continued demand that’s pushing prices higher. The stamp duty holiday finishing could be a bump in the road, but I don’t see it as a material stumbling block.

With my £1,500, I’d look to split it into a few top UK stocks. Putting £300-£500 into each one allows me to diversify my cash but at the same time have enough skin in the game should one stock outperform.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has recommended Rightmove. 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.

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