2 Stocks & Shares ISA mistakes I’ll be avoiding, and 1 stock I’m buying soon!

As the Stocks & Shares ISA deadline nears, our writer breaks down a couple of rookie errors she’ll be looking to avoid.

| More on:

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 Stocks & Shares ISA deadline is just days away. I reckon it’s a great investment vehicle, especially with the attractive tax implications.

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.

Let me break down two common mistakes I’ve learnt not to make. Plus, I’ll go over one stock I’m planning on buying for my ISA as soon as I can.

Get the cash in!

The end of the tax year seems to sneak up on us every year. I know it feels like that for me.

A big issue I reckon is actually using the £20,000 allowance, and getting the money deposited in a timely manner.

My Foolish colleague Alan Oscroft recently wrote a great piece about how Hargreaves Lansdown investors rushed to fund their ISAs at the last minute, among other issues.

I’ll admit I’ve done this in the past. However, what if there are banking issues, such as my online app not working on deadline day? I could miss out.

I’d look to ensure I’m depositing regularly, and using my full allowance, if I have the cash to do so. Being safe rather than sorry is a life lesson I was taught early on. I apply this to investing in certain instances too.

Deposit now, invest later

Many investors are under the misconception that the deadline means shares must be purchased before the end of the tax year too. This is simply not the case.

Buying shares can happen at any time. The deadline is mainly about using your allowance for the tax year.

Rushed buying decisions can lead to poor investments, in my opinion. I’m a big advocate of taking my time, doing my due diligence, and ensuring I’m buying the best stocks to bolster my wealth.

One stock I’m eyeing up

From a returns and growth perspective, Lloyds Banking Group (LSE: LLOY) shares look very appealing to me.

The business has come under pressure in recent times given the volatility we’ve seen in the market. Plus, the shares haven’t moved much since the financial crash of 2008 either, never mind recent turbulence.

However, the shares look attractive on a price-to-earnings ratio of just six, and also offer a dividend yield of 6.1%. Furthermore, the business is looking to further reward investors with a series of share buyback schemes. However, I’m conscious that dividends are never guaranteed.

Naturally, there are risks involved. Continued economic volatility is a concern. Furthermore, a recent investigation by the Financial Conduct Authority (FCA) into motor finance mis-selling could lead to a large fine. This could impact returns.

I’m buoyed by Lloyds’ vital position in the banking ecosystem in the UK. A big part of this is the firm’s position as the UK’s largest mortgage lender. The housing imbalance in the UK could provide longer-term growth opportunities, which could boost performance and growth.

For me, the bullish aspects outweigh the bearish factors mentioned. This is the reason I’m drawn to the shares.

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.

Sumayya Mansoor has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group Plc. 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

artificial intelligence investing algorithms
Investing Articles

Everyone’s talking about AI! Here’s 1 FTSE stock to consider buying for exposure

A hot topic right now is artificial intelligence (AI). This Fool explains how this FTSE stock could offer investors an…

Read more »

British Pennies on a Pound Note
Investing Articles

1 penny stock I’d buy today while it is 99p

Ben McPoland highlights Windward (AIM:WNWD), a fast-growing penny stock that could benefit from the artificial intelligence revolution.

Read more »

Concept of two young professional men looking at a screen in a technological data centre
Investing Articles

This forgotten FTSE 100 gem could be the best bargain on the stock market

The FTSE 100 is full to the brim of high-quality businesses. But this Fool has his eye on this 'forgotten'…

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

Here’s a FTSE 250 stock I’d put 100% of my money into

If this Fool could buy just one stock from the FTSE 250, Games Workshop would be his choice. Here, he…

Read more »

Fans of Warren Buffett taking his photo
Investing Articles

2 reasons Warren Buffett might love this stock, and 1 reason he might avoid it like the plague

Warren Buffett's one of the best stock pickers of all time. But would he approve of Barclays shares? This Fool…

Read more »

Union Jack flag triangular bunting hanging in a street
Investing Articles

Down 28% in a week! What’s going on with the share price of this FTSE 250 British icon?

There’s one stock in the FTSE 250 that took a bit of a battering last week. But I’m not surprised,…

Read more »

Two white male workmen working on site at an oil rig
Investing Articles

At around £28.50, Shell’s share price looks cheap to me

Shell’s share price still looks undervalued against its fossil-fuel-focused rivals to me, despite it pushing back its carbon reduction targets.

Read more »

BUY AND HOLD spelled in letters on top of a pile of books. Alongside is a piggy bank in glasses. Buy and hold is a popular long term stock and shares strategy.
Investing Articles

433 shares in this FTSE 100 dividend superstar could make me £18,803 in annual passive income!

This overlooked FTSE 100 gem has one of the best yields in the index, looks undervalued, and makes me big…

Read more »