The Stocks and Shares ISA deadline is fast approaching. So, if you haven’t already put your annual allowance into a Stocks and Shares ISA for 2019–09, now could be the time. This is particularly true, if you have a spare £20k earning a paltry interest rate in a savings account.
With the global economy shaken and financial markets reeling, there are many good quality companies now with competitive share prices. That means there’s an even greater potential for you to earn more from your stock investments than from bonds or savings accounts.
Take advantage of your £20k ISA allowance
ISAs offer a tax-free way to save your money with the option to invest in stocks of your choosing.
If you open a Stocks and Shares ISA before 5 April, you can take advantage of this year’s £20k allowance. You can then invest a further £20k for the 2020–21 allowance or start investing slowly from just £25 or £100 per month.
I like the following FTSE 100 stocks because they’re solid companies, with a good dividend yield and, over the long term, are likely to survive the headwinds posed by the Covid-19 pandemic.
Get defensive with hygiene, health, and nutrition
Reckitt Benckiser Group (LSE:RB) has been outperforming the FTSE 100 since late January.
The Reckitt Benckiser share price has risen over 10% in the past week. It’s the maker of Dettol and Lysol cleaning products, which have been popular consumer buys in the fight against the coronavirus. I don’t think this is the sole reason for its share price rise, though. It also makes popular consumer goods, such as Nurofen and Gaviscon, which are not likely to go out of favour soon. It’s a defensive stock, with a healthy balance sheet, 60% debt ratio, and a 3% dividend yield.
Its full-year results news release last month stated Reckitt Benckiser is planning a £2bn investment programme over the next three years. This is to leverage its scale in the key markets of hygiene, health, and nutrition.
Climate change and oil wars
With the price of oil as volatile as the financial markets, oil companies have been dealt a double blow to their share prices. BP (LSE:BP) is no exception. The BP share price is down 45% in a month and many of its industry peers have seen similar share price slides.
Although chiefly known as an oil and gas company, BP has integrated itself globally through its operations in refineries, chemical plants, renewable fuels, and power.
Although the current demand for oil is suppressed as air travel is grounded, global demand will reappear once normality resumes.
As it stands, BP has a dividend yield of 10.5%. There’s a high chance it will be cut, but even if it’s halved, a 5% yield would give shareholders a substantial income opportunity.
A Stocks and Shares ISA for the long term
As the stock market is a volatile place right now, don’t invest if you’re looking to make a quick return. I’m talking about investing for the long term, meaning five years minimum, but probably much longer.
Are you afraid of investing in the stock market today? If so, you can still take advantage of the Stocks and Shares ISA allowance. Open an ISA and deposit the cash. You can then wait and buy shares when you feel the price is right and you’re ready to commit.
Kirsteen has no position in any of the shares mentioned. The Motley Fool UK has 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.