In 2023, I want to start taking more advantage of tax-free savings via a Stocks and Shares ISA.
As I plan to move a larger portion of my money into stocks in 2023, I have been considering how to maximise my ISA.
If I were to max out my ISA, I would be able to invest £20,000 over the tax year. I don’t want to put all my eggs in one basket, so I would split my money between safe and growth shares.
Investing in growth
If I’m going to invest more of my money in shares, I want to see a return. That’s where growth stocks come in.
To hit the £20,000 ISA limit, I would be investing my money monthly. Therefore, I would want to pick out some key companies that I believe are primed for growth.
These would be shares that I want to buy, no matter the price, in anticipation of future growth.
One such company is Advanced Micro Devices. I’ve already invested in the company this year, and I still believe the share price has room to grow. The stock is currently US$76, with a 12-month target of US$115.
Its revenue has consistently grown year-on-year, and I see no reason for that to stop any time soon.
Another company I would be looking at investing in throughout the year is Lloyds. The banking group currently has a price-to-earnings (P/E) ratio of under 7.
That suggests the share price has a lot of room for growth. It’s potentially riskier than AMD due to the economic conditions affecting the mortgage market, but I’m in it for the long haul.
Aston Martin is a company that I have been keeping my eye on. The British car manufacturer’s shares are currently priced at £1.36. That’s down around 91% in a year.
Aston Martin has a lot of debt, but with its recent revenue growth, I think it’s a contender.
Managing risk
I want safe shares to make up the backbone of my Stocks and Shares ISA. Typically, I like to have around a 60/40 split between shares I deem safe versus risky. That means throughout 2023, I would want to invest £12,000 of the £20,000 in safe companies.
In the current economic climate, I want my safe companies to be reasonably recession-resistant. That’s why I look at companies with stellar track records or products that are unaffected by an economic downturn.
Unilever is one company that shouldn’t be affected by a recession. Its four main product groups are food, refreshment, home care, and personal care. All of which people need come rain or shine.
In fact, while many companies’ share prices have suffered this year, Unilever is up 5.49% since January. That outpaces the FTSE 100, which is up 2.36% since January.
Apple is another company that I think would be a safe place to park my money in 2023. Its profit was up nearly 12% in 2022, on top of a 45% increase in 2021. It’s a company that never seems to stop growing.
It’s one of the world’s most consistent companies, and I’d sleep just fine with it taking up a chunk of my ISA.
