In my opinion, buying UK shares is a great way to build funds to enjoy a comfortable retirement. It’s a particularly effective way to create wealth if I invest using a tax-efficient financial product like a Stocks and Shares ISA.
There’s no guarantee that any of us will make big returns from share investing, of course. Unforeseen macroeconomic and company-specific factors can blow my expected returns well off course. But by doing diligent research and building a diversified portfolio, I have a great chance of creating some decent cash. The average stock market return sits at around 8% per year over an extended time horizon (say 10 years or more), studies show.
Here are two UK shares I see as great long-term buys for my ISA. And I think their share prices could spring higher in the days to come.
#1: A FTSE 100 hero
A string of positive trading updates from the housebuilders suggest that now could be the time for me to increase my holdings in Taylor Wimpey (LSE: TW). This FTSE 100 construction stock is due to release its own next set of financials on Tuesday, March 2.
Taylor Wimpey said last month that “sales and production [recovered] strongly towards the end of the year” as Covid-19 restrictions on building activity and property viewings were rolled back. It’s a result that also illustrates the strength of underlying demand. Indeed, favourable lending conditions and a long-running shortage of homes helped drive the company’s order book to a vast £2.7bn as of December. I’m expecting that upcoming release to confirm that interest in its homes has remained robust since the turn of 2021.
No UK share is completely without risk of course. And Taylor Wimpey is no exception. The eventual return of the Stamp Duty and changes to Help to Buy might hamper sales rates from the second half of the year. A long economic hangover from Covid-19 and our European Union withdrawal might also impact sales of its new-build properties.
#2: Another impressive UK share
Devro (LSE: DVO) is another quality UK share with the wind in its sails. The sausage skins maker declared in January that underlying operating profits for 2020 would be at the “upper end” of broker forecasts. It seems to have strong momentum going into next week when it will be unpacking full-year results. These are also slated for Tuesday.
Both sales and margins have continued moving higher at the food producer. This pays testament to market share gains with existing customers and new business wins in emerging markets. It also reflects the long-running success Devro is still enjoying in stripping down costs.
Devro might suffer in the short term from the ongoing Covid-19 crisis in Europe and the US. This has already caused production issues due to staff and meat shortages, and dented revenues due to the shuttered hospitality sector. I still think this UK share is a very-attractive growth stock for long-term investors like me though, thanks to its rising position in fast-growing emerging markets and its strong track record of developing popular cutting-edge products.
Royston Wild owns shares of Taylor Wimpey. The Motley Fool UK has recommended Devro. 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.