The Motley Fool

If I had £2k to invest, I’d buy these UK shares

The UK national flag in front of Canary Wharf skyscrapers where professionals trade shares for a living.
Image source: Getty Images

If I had £2,000 to invest in the stock market right now, I’d buy a mixed basket of UK shares. To put it another way, I’d acquire both income and growth stocks for my portfolio. 

I think this approach would allow me to benefit from the best of both worlds. Adding defensive income stocks to my portfolio would provide solid foundations and a steady stream of income to reinvest.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Meanwhile, the growth stocks could generate capital growth, and I can let them grow while receiving the income from the other side of the portfolio. 

UK shares for the income portfolio 

The first stock I’d buy for the income side of my portfolio is the utility group SSE. In my opinion, this company has several attractive qualities.

First of all, it’s a defensive income stock. Investors are currently in line to receive a dividend yield of 5.7% from the shares this year.

And secondly, the energy supply and transmission business is investing billions of pounds in renewable energy projects over the next few years. I think this investment will help push earnings higher and protect the company from technological change. 

Another stock I’d buy for the income side of my £2k portfolio of UK shares is Severn Trent. Another utility supplier, this stock offers a dividend yield of 3.7% at present. The company also has a track record of above-average dividend increases. 

Both of these firms are exposed to the same risk. Utilities are highly regulated, and there will always be a chance regulators decide to take a more aggressive line with the operators. This could lead to reduced earnings and lower dividends if they have to spend more on new projects or cut customer bills. 

Growth holdings

For the growth side of my £2k portfolio, I’d buy UK shares Games Workshop and Team17.

On the face of it, the miniature model maker and the computer games producer might seem like very different businesses. However, there’s some overlap. In recent years, Games Workshop’s income from computer games has leaped, and this could be just the start of a new era for the group. The company has very successfully managed to navigate to a new audience. 

Team17 has also successfully moved across to the gaming market to increase its customer base. Further, the company’s been buying up growth through bolt-on acquisitions. The latest was the US-based gaming group StoryToys, which it bought for $26.5m earlier this month. 

I like both of these companies because they have a track record of developing new products to remain relevant with their customers. As long as they keep investing, I think this will continue and support growth. 

Sill, these UK shares do face some challenges. The software and gaming markets are incredibly competitive, and it’s becoming more costly to get games in front of customers.

There’s also always going to be a risk that certain games will go out of fashion. If either company overlooks these risks, their growth could come under pressure. 

One FTSE “Snowball Stock” With Runaway Revenues

Looking for new share ideas?

Grab this FREE report now.

Inside, you discover one FTSE company with a runaway snowball of profits.

From 2015-2019…

  • Revenues increased 38.6%.
  • Its net income went up 19.7 times!
  • Since 2012, revenues from regular users have almost DOUBLED

The opportunity here really is astounding.

In fact, one of its own board members recently snapped up 25,000 shares using their own money...

So why sit on the side lines a minute longer?

You could have the full details on this company right now.

Grab your free report – while it’s online.

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Games Workshop. 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.