With £6,757 to invest, are these the best UK stocks to buy now?

I think that there are some great opportunities to invest in UK stocks at the moment. Here are three from different sectors that I think can do well.

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.

Businesswoman calculating finances in an office

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The average person in the UK has £6,757 in savings. Rather than keeping all of that in a savings account, I’d look to invest it in UK stocks.

Buying stocks with my money, rather than leaving it in a savings account, allows me to become a business owner. In doing so, I can build my wealth as the businesses I invest in make money.

I wouldn’t invest all of that, to protect myself from any emergencies in the near future. But I’d look to invest some of it, and I’d try to diversify my investments across various different sectors.

Utilities

To start with, I’d look to buy shares in companies that have highly predictable earnings. Utilities stocks are a good example of this.

In general, utilities companies offer good protection against inflation. Their earnings are regulated and this brings risk of unfavourable regulation in the future, but this does mean that they are able to pass on increases in costs to their customers.

The most obvious UK stock to buy from the utilities sector is National Grid. At current prices, the stock has a dividend yield above 5%, meaning that it could start generating cash for me right away.

I’ve been ignoring National Grid shares for some time. But at today’s prices, I think they could be a great addition to my portfolio when I’m in a position with excess cash to invest.

Materials

I’d also look to invest in some companies that are involved in getting basic materials out of the ground. One that stands out to me in this area is Endeavour Mining

The company owns and operates gold mines across Africa. This brings risk from political instability, but it also means that Endeavour is able to extract gold at lower prices than its competitors.

In a business where the product is a commodity, the cost of extraction is key. Since there’s no obvious difference between one company’s gold and another’s, the competition comes down to cost.

In my view, Endeavour Mining could be a great addition to my portfolio. I’m looking to buy shares in the near future.

Consumer products

Right now, the UK seems to be heading towards a recession. Combined with inflation, this makes a difficult macroeconomic environment.

There are some companies, though, that I think will do better than many expect. One of these is Howden Joinery Group

Higher prices for everyday goods is likely to put pressure on household budgets. As a result, I expect to see fewer people moving house over the next year or so.

Instead, I’m anticipating an increase in the number of people attempting to improve their existing houses. And that’s where Howden’s comes in.

Howden Joinery Group supplies kitchen products, appliances, and materials to trade customers. I’m anticipating an increase in demand over the next couple of years and I think that the company will benefit from this.

In my view, the broader market is missing this point. That’s why I’d buy the stock at today’s prices if I had the cash to invest.

UK stocks

I think that the stocks I’ve identified here could be a great way to protect a portion of my savings from the effects of inflation. A lot of UK stocks in various different sectors look attractive to me at today’s prices. 

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.

Stephen Wright has no position in any of the shares mentioned. The Motley Fool UK has recommended Howden Joinery 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.

More on Investing Articles

Passive income text with pin graph chart on business table
Investing Articles

Yields of up to 7%! I’d consider boosting my income with these FTSE dividend stocks

The London market has some decent-looking dividend stocks right now, and I’m tempted by these two for growing income streams.

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

I’d put £20K in an ISA now to target a £1,900 monthly second income in future!

Christopher Ruane shares why he thinks a long-term approach to investing and careful selection of shares could help him build…

Read more »

Mature couple at the beach
Investing Articles

6 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Black woman using loudspeaker to be heard
Investing Articles

I was right about the Barclays share price! Here’s what I think happens next

Jon Smith explains why he still feels the Barclays share price is undervalued and flags up why updates on its…

Read more »

Investing Articles

Where I’d start investing £8,000 in April 2024

Writer Ben McPoland highlights two areas of the stock market that he would target if he were to start investing…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Ahead of the ISA deadline, here are 3 FTSE 100 stocks I’d consider

Jon Smith notes down some FTSE 100 stocks in sectors ranging from property to retail that he thinks could offer…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

Why I think Rolls-Royce shares will pay a dividend in 2024

Stephen Wright thinks Rolls-Royce shares are about to pay a dividend again. But he isn’t convinced this is something investors…

Read more »

Investing Articles

1 of the best UK shares to consider buying in April

Higher gold prices and a falling share price have put this FTSE 250 stock on Stephen Wright's list of UK…

Read more »