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How I’d invest £1k in a Stocks and Shares ISA today

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Stock and Shares ISAs are a great tool to save for the future. Most online stockbrokers now offer one of these products. They’re managed just like a regular dealing account. Investors can own any investment they like in an ISA as long as it’s traded on a “recognised exchange.” Put simply, this means most developed market blue-chip stocks are eligible. 

The main benefit of opening a Stocks and Shares ISA is its tax benefits. Any income or capital gains earned on money held within one of these wrappers is tax-free. Investors don’t even need to declare the money in their tax returns. 

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Stocks and Shares ISA investments 

Now may not seem like the best time to buy shares. The outlook for the global economy is highly uncertain, and share prices could fall further in the short term. 

However, often, the best time to buy stocks is when other investors are selling. That’s why I believe one could benefit from buying stocks today and holding for the long term. 

Due to the uncertainty surrounding the economy, I’d stock up with blue-chip stocks. Some businesses stand out to me as being some of the top investments to own right now. GlaxoSmithKline is a great example. Last week, the company announced that, due to a better-than-expected trading performance in the third quarter, group profits would only fall by -1% this year. This is incredibly encouraging, considering the current operating environment. 

This projection showcases the company’s defensive nature. But it’s not only Glaxo that’s forecasting market-leading growth this year. Reckitt Benkiser is forecast to report a modest increase in net profit for the year from 2018 (it recorded an enormous loss for 2019). The Durex and Dettol owner has benefited from an explosion in demand for cleaning products this year. 

If I had a lump sum of £1k in my Stocks and Shares ISA to invest right now, I’d seriously consider buying one of these two stocks. 

Other options 

I also think it could be worth considering an FTSE All-Share tracker fund. According to some projections, UK stocks are trading at a discount of 40% to international equities. This is the cheapest they’ve been for decades, which could be a fantastic opportunity. Therefore, I think one could profit from buying a diversified UK stock index like the FTSE All-Share. 

On another front, blue-chip tech stock Avast may also be worth considering. There are only a handful of high-growth tech stocks listed in London, and this is one of them. If investors wants exposure to this fast-expanding sector, Avast might be a good buy. I’d own this alongside the other blue-chips above. Doing so would provide a good combination of income and growth for a Stocks and Shares ISA portfolio.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended GlaxoSmithKline. 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.

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