What’s the best strategy for ISA investors today? Hunker down and wait for markets to settle before buying more shares? Or take a bolder approach and continue boosting the size of your portfolio?
It’s a no brainer in my opinion. Firstly, volatility on stock markets is nothing new. And it hasn’t stopped tonnes of ISA investors making a fortune in years gone by. Secondly, ongoing attacks on the State Pension mean that individuals can’t afford NOT to stop investing to safeguard their financial future. And thirdly, there are far too many great shares trading at rock-bottom prices to pass over.
With this in mind, I’d like to discuss some brilliant cut-price shares I think ISA investors need to consider carefully.
Bank of Georgia’s recent share price descent leaves it trading on a forward price-to-earnings ratio of 6 times and boasting a fatty 3.2% dividend yield. Sure, banks like this might be some of the most cyclical out there. But Bank of Georgia’s low earnings multiple doesn’t reflect the rising economic might of the Eurasian nation and this stock’s exceptional long-term profits outlook.
Let’s not forget the bank’s considerable cash reserves that should help it ride out the current crisis too. The National Bank of Georgia recently commented that its capital ratios are “sufficiently in excess” of the country’s minimum capital requirements.
Good as gold
Buying Centamin shares in an ISA remains a terrific idea in my opinion, too. Demand for precious metals remains strong and as a consequence gold is rising again. It’s now at multi-week peaks around $1,750 per ounce and moving back towards recent seven-year highs.
Don’t think that gold’s year-long bull run will run out of steam any time soon, either. The economic and political results of Covid-19 will likely keep safe-haven metals like this well bought through the new decade. The same can be said for central banks money printing, which is undermining the value of paper currencies, too.
All looks good for mining giant Centamin on the profits front, then. Yet it trades on an undemanding prospective P/E ratio of 13 times. Add a bulky 5%-plus dividend yield into the equation too and I reckon this is one more brilliant ISA buy.
Build big ISA profits
It’s still a good idea for ISA investors to buy shares in Britain’s homebuilders as well. The Covid-19 crisis may create significant economic waves that affect house sales in the short term. But these shares stand to benefit from the country’s bad build rates and the subsequent impact on home prices for years to come. The mass downing of tools under recent lockdown restrictions has worsened the imbalance too. Some estimate that it may take a full year for construction activity to return to its pre-crisis level.
It’s a phenomenon that makes Springfield Properties a terrific buy today. At current prices the Scottish construction ace sports an ultra-low forward P/E ratio of 6 times and a bulky corresponding dividend yield north of 6%, too.
With global markets in turmoil as the coronavirus pandemic tightens its grip, turning to shares to generate income isn’t as simple as it used to be…
As the realities of ‘life under lockdown’ begin to bite, many of the stock market’s ‘go-to’ high-yielding companies have either taken an axe to their dividend pay-outs… or worse, opted to suspended them altogether – for the near-term at least.
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*Please be aware that dividends are variable and not guaranteed.
Royston Wild 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.