How I’d invest £1,000 in my Stocks and Shares ISA before the April deadline

Jon Smith explains which stocks he’d buy now before the Stocks and Shares ISA deadline, based on dividend and growth options.

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My Stocks and Shares ISA is a provision that allows me to keep my investments in one place, with a tax-effective wrapper. Each year, I can invest up to £20,000 into the ISA. As we stand, there’s less than two months before the current Stocks and Shares ISA deadline on the first week of April. With an spare £1,000 right now that I want to put to work, here’s how I’m looking to invest.

Points to consider before investing

One point that will influence where I decide to invest will be what my existing Stocks and Shares ISA looks like. For example, if it’s full of dividend stocks, I might want to consider buying some growth stocks instead. Or if I’m heavily concentrated in holding stocks from a particular sector, I should probably think about including some other areas.

In addition to this, I want to think about what goal I have for the £1,000. Is this money that I ideally want to try and use to protect against a stock market crash? In that case I’m best off considering some defensive stocks. Or is this money that I want to put to work to try and beat inflation, currently running at 5.5%? If so, then I want to consider some more aggressive options, including some higher-risk growth stocks.

Fortunately, whatever the answers to those questions are, my Stocks and Shares ISA can be of use. The benefit of not paying capital gains tax or dividend tax on any proceeds allows me to take advantage of any profits or income I can generate.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

My personal favourites for a Stocks and Shares ISA

Currently, there are a few stocks that have caught my eye since we started the year. In the big pharma space, AstraZeneca continue to impress me. Full-year results out last week showed total revenue increased by 41% year-on-year. It also has a strong pipeline of new medicines for this coming year. This includes recent successful Phase 3 trial results of a treatment for prostate cancer. Although it’s going to have higher costs due to a transformation taking place, I think it’s a solid long-term buy for my ISA.

For dividend options, it’s hard not to like the 8.83% dividend yield for Rio Tinto. It has a 10-year dividend growth rate of 19%, showing that the current dividend payouts aren’t just a flash in the pan. This is a higher-risk option, due to the correlation in earnings to the commodity prices that it mines. 

Finally, I’d also consider adding Greencoat UK Wind to my Stocks and Shares ISA ahead of the deadline. It ticks the box of being a renewable energy stock, an area that I think will grow for many years to come. It also has a commitment to increase the dividend in line with RPI inflation, so this should help provide a buffer if inflation keeps moving higher. As a risk, the share price is currently trading at a premium compared to the actual net asset value of the business, which could mean it’s overvalued for now. That means I may consider buying on any pre-deadline dips.

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 assessed. Consider taking independent financial advice.

Jon Smith and The Motley Fool UK have no position in any of the shares mentioned. 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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