Right now, as the annual deadline for contributions to a Stocks and Shares ISA looms in a matter of weeks, many investors are taking stock of their portfolio.

That is a good opportunity to step back and ask the more general question: how well-prepared is your portfolio for a sudden stock market crash?

I opt for market readiness over market timing

There are good reasons to believe that there could be a stock market reckoning in the offing.

Oil prices have soared and inflation could follow. That may be bad news for the economy both in the UK and globally.

But the reality is that nobody knows for certain when the market will next crash. It could be this week – but it may be many years from now.

That may seem surprising given current geopolitical uncertainty. But that may already be priced into the market so any positive news that arrives, like an increase in oil supplies or ceasefire in the Middle East, could be greeted with waves of investor enthusiasm.

Just because I am not trying to time the market does not mean I am ignoring the risks. Rather, I aim to get my portfolio into what I think is the right condition, from a long-term perspective.

Great company, great price!

In practice that means I keep my portfolio under review.

Specifically, although I am willing to take the rough with the smooth as a long-term investor, I consider whether anything has changed that might fundamentally alter the investment case for a share I own.

For example, higher oil prices could feed through to costlier plastic prices for Bunzl. As the company sells lots of plastic catering items, that could eat into profits – but over the long run I do not expect oil to remain at elevated price levels.

By contrast, I think recent events could have long-term impacts on the business prospects for some companies with Middle Eastern exposure. Fortunately I do not currently own any shares in companies that are heavily dependent on the region for their profits.

Another element of reviewing my portfolio is not looking at shares I own – but what I do not own.

There are shares I would like to own but I see as overvalued. If their price plummets, I may have a window of opportunity to buy.

Making a shopping list

I therefore have a watch list of shares I would like to own if I could buy at the right price – and one of the companies on it is Spirax Group (LSE: SPX).

The share price has tumbled 40% over five years. Despite that, it is still 30 times earnings.

That is too high for me given risks the FTSE 100 company faces, such as falling decline in its steam thermal solutions division. Revenue in that business fell 16% last year.

Still, Spirax has a profitable  business. Its well-developed niche of engineering solutions for industrial customers gives it pricing power.

Demand is resilient even in a weak economy, as companies need to keep their machines running.

Spirax announced last week that it would increase its annual dividend per share – for the 58th year in a row!

The post If there’s a stock market crash this week, will you be ready? appeared first on The Motley Fool UK.

This can raise the question of how to strike the right balance between growth and income shares for a SIPP.

Why growth can make sense in a SIPP

Each investor is different, of course, so there is no one correct answer. Some investors may even feel there is no need to balance, for example plumping for putting their whole SIPP into income shares in the hope of steady passive income streams.

This is understandable. Retirement costs money – and pensions may be the only source of income at that point.

But I think the long-term nature of investing for retirement in a SIPP can provide the sort of timeline in which some growth shares are able to shine, as their businesses prove themselves and then develop.

Understand your objectives and risk tolerance

Part of this process will also depend on what someone is looking for from their SIPP, in terms of investment objectives.

Some people will hope dividends from the SIPP can form a significant part of their income in retirement. Others will be looking for the prospect of capital gain and may place a lower value on dividends.

Getting clear about your objectives and your risk tolerance (how much risk is willing to be taken in search of the targeted level of reward) is always an important part of any investing. This is true when it comes to deciding how to invest the money in a SIPP too.

Thinking about income – and the source of income

One of the things I think is important when it comes to any income shares is trying to dig into the source of income. Where is it coming from? How likely is it to last?

Some investment trusts or companies may offer a high yield today, but in a way that seems ultimately unlikely to be sustainable over the long term. Maybe the business is in decline, or the trust’s spare cash is being eaten up.

When a company grows dividends, I like the underlying business to have growth prospects to support that. Take Spirax Group (LSE: SPX) as an example. It is one of the few FTSE 100 companies to have grown its dividend per share annually for decades.

The firm spent £87m on dividends in the first half of last year. That was covered by adjusted cash from operations of £97m, although once income taxes, interest and acquisition costs are considered, it reported negative free cash flow for the period.

If that continues, it is a risk to the dividend.

But combining acquisitions and its existing business, I think Spirax has the potential to grow operating cash flows over time.

It has a proven business model and industrial customer base often needing its specialist expertise to keep the machines running. That gives it pricing power. It also develops bespoke solutions for customers’ problems, helping encourage repeat business.

For now, the share price is too high for me to add Spirax to my SIPP just yet. But I am keeping an eye on it.

The post What’s the right balance of growth and income shares for a SIPP? appeared first on The Motley Fool UK.

Fear and opportunity

The answer to that question will mean different things to different people.

For some investors, a stock market crash is something to be feared. While a sharp decline in share prices may only be a paper loss (unless those shares are sold), the psychological impact of seeing such a loss can still be sizeable.

However, over the long run, I tend to believe that quality will out.

A stock market crash may send the price of a share tumbling in short order.

That does not necessarily change its underlying value. Also, it can potentially offer me an opportunity to pick up a stake in high-quality companies at a bargain price.

Market timing: tempting, but never infallible

Will that happen soon?

There are reasons that it could.

Mounting geopolitical risk and weak economic growth prospects make it hard to understand ongoing growth in many share prices. The AI stock boom looks a lot like a bubble from one perspective.

But last year demonstrated that the market can do well in the short term even in a volatile economy. Many smart investors see AI not as a bubble, but as a transformative technology that could yet push the markets higher still.

However, while it can be tempting to try and time the markets, nobody can ever do it with certainty.

Sooner or later, the stock market will crash. But nobody knows for sure whether that is just around the corner or still a long way down the road.

What I’m doing now

Sitting out of the market for prolonged period can have an opportunity cost for investors.

So I am still active and indeed have been buying some shares so far in 2026.

But I am also updating my watch list of what I think are high-quality shares I would like to buy if a stock market crash let me do so at an attractive price.

Such windows of opportunity can be short-lived, so it is important to be prepared.

I’m waiting to buy…

One share on my watch list is FTSE 100 engineer Spirax Group (LSE: SPX).

Spirax has built an enduring business by developing specialist expertise in critical industrial processes like steam. That means its clients are willing to use its services even when the economy is weak, as the firm’s engineering know-how helps its clients keep their factories and premises running.

By developing bespoke solutions in many cases, Spirax has been able to deepen its client relationships, while making itself first choice for future expenditure.

Ongoing challenges with the pace of post-pandemic demand recovery in its Chinese business remains a risk for the business.

But it has grown its dividend annually for decades. At the right price, I would gladly own this share. I see it as a high-quality British blue chip with a proven business model and ongoing growth potential.

Currently selling for 32 times earnings, however, it looks pricey to me. For now, it is on my watch list.

The post Could the next stock market crash be round the corner? appeared first on The Motley Fool UK.

What seems like a good resolution at the time can fall prey to the demands of everyday life.

But it need not take a lot of money to get going in the stock market – and possibly begin a lifelong journey of building wealth.

Here are three things someone could do now that I think would help them start investing in the New Year.

1. Learn about how the stock market works

There is more to investing than buying shares in a good business, hoping that if it does better in the future then its share price will go up.

For one thing, while capital gains can be an important part of building wealth in the stock market, so can dividends. So it is useful to learn about things like free cash flows, as without them a company’s current dividend may well be unsustainable.

It is also worth learning about how to value shares.

There are other important lessons before someone is ready to invest, such as portfolio diversification.

Taking some time to learn the basics of investing could be time very well spent.

2. Set up a way to invest

Having done that, it could be time actually to start investing.

Before that, though, someone will need a way to invest. Setting it up can take time, so I think an early start makes sense.

That might be a share dealing account, for example, or a SIPP, Stocks and Shares ISA or trading app. Different investors each have their own needs and it is important for them to consider what works best for them.

3. Make a list of shares to buy

Being ready to invest and actually investing are two different things.

Some people soon find loads of shares they would like to buy, while others have cash to invest but no ideas they find compelling enough to act on. I never rush to invest for the sake of it, preferring only to buy a share when I really like the business and find the price attractive.

For example, one share I would like to own is engineering group Spirax Group (LSE: SPX).

It may not be a household name, but this is actually a FTSE 100 company. As it focuses on industrial clients, it is not widely known.

Within its target customer base, though, Spirax is not only known but often also well-regarded. It has expertise in some specific engineering areas, such as steam equipment.

Steam may sound quaint but in fact a lot of today’s industrial processes still rely heavily on steam, so businesses are willing to pay to have the right expertise on hand when required. That gives a specialist like Spirax pricing power.

The company is one of only a few in the FTSE 100 to have raised its dividend per share annually for decades (over half a century in its case).

But while I like the business, I am not keen on the current share price of 31 times earnings. So Spirax is on a list of shares I would like to buy, but only when the price strikes me as attractive enough.

The post Want to start investing in 2026? 3 things to get ready now! appeared first on The Motley Fool UK.

To keep things realistic I told it what I already hold, because diversification is key. My ISA includes Legal & General Group, M&G, Lloyds Banking Group, GSK, Taylor Wimpey, Diageo, Glencore, 3i Group, Bunzl and Burberry.

Diversification is key

ChatGPT said this left me heavy on financials, consumer staples, mining and housebuilders, so it would focus on areas where I’m underweight, what it calls “tech-adjacent industries, energy transition, healthcare services, defence and infrastructure”. It’s good at the broad-brush stuff like that. Where it falls down is in assessing risk and reward, or providing accurate, up-to-date data. Yields and valuations are often months out of date, but presented as fresh. That’s why I treat AI as just a starting point.

Its first idea was National Grid, a portfolio staple for cautious ISA investors. ChatGPT praised its “predictable revenue, dependable dividends and lower volatility”, while warning about debt and political scrutiny. Personally, I’m worried the utility’s borrowing could spiral as it ploughs tens of billions into preparing the grid for renewables. Not for me.

FTSE 100 surprises

Its next pick was defence contractor BAE Systems The shares have soared but I’m wary after such a strong run, especially if the hoped-for peace in Ukraine edges closer. Then it suggested AstraZeneca, even though I already hold GSK. A great company, but I’m not doubling up.

After three obvious FTSE 100 names, things got more interesting. It recommended Segro. This logistics-and-data-centre real estate investment trust (REIT), which offers tax advantages.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

As a warehouse specialist, ChatGPT said Segro should benefit from e-commerce growth but warned rental yields could be squeezed if vacancies rise. It didn’t mention that the shares have slumped 10% in a year and 25% over five. Yet the 4.25% yield and recovery potential merits further exploration, as does the final pick.

Worryingly, ChatGPT gets the name wrong, calling it Spirax-Sarco Engineering, when it rebranded as Spirax Group (LSE: SPX) back in May 2024. That’s 18 months ago, which makes me wonder how old some of its other information is.

Spirax is a specialist in thermal energy and steam management system. ChatGPT highlights its “long record of pricing power and niche market leadership”, but warns about its sensitivity to global manufacturing cycles. Those risks have outweighed the rewards lately, with the shares down 2% over one year and 37% over five.

I like buying quality companies when they’re out of favour. Spirax gives me access to two long-term themes in energy efficiency and industrial decarbonisation. I’m wary though, as global industrial output slows, although Spirax says its margins and revenues grew nicely in Q3. It isn’t exactly a bargain though, with a punchy price-to-earnings ratio of 23.7.

I still think it’s worth considering, but will do my own research first. Setting up a Stocks and Shares ISA is a personal business, where human intelligence easily trumps the artificial. It always will.

The post I asked ChatGPT to invest £10,000 in a Stocks and Shares ISA for me and it said… appeared first on The Motley Fool UK.

That strong performance has included the index repeatedly setting new all-time highs this year. Could it go even higher in 2026?

Potential for further growth

I think the short answer is yes. I do see the potential for the index to move higher next year. After all, 2025 has seen a sluggish UK economy and a number of risks to financial stability, from tariff disputes to geopolitical disputes. But despite that, the FTSE 100 has been having a good run.

If the wider context gets better next year and the British economy moves firmly into growth mode, I think that could help support a higher price for the flagship index.

Ongoing uncertainties

However, for now it remains to be seen how likely that scenario may be. If the UK continues to struggle with sluggish growth, that may hamper the prospects for the FTSE 100 albeit this year has not exactly demonstrated that.

But the bigger risk I see is if the British economy gets notably weaker – or if the world economy wobbles.

In either case, I would not be surprised to see a decline in the value of the FTSE 100.

Taking a long-term view

Still, I am an investor with a long-term time horizon. Over the long run, I expect the UK economy to perform well. That makes me feel bullish about the long-term prospects for the flagship index.

At the moment, its valuation does not grab me as particularly attractive though. I have no plans to invest in a FTSE 100 tracker in the foreseeable future.

Hunting for individual shares

That does not mean I am ignoring FTSE shares altogether however. Rather than buying into a tracker, I continue to hunt for individual shares within the index that I think offer me good value from a long-term perspective.

Sometimes I find them and buy them, as I have been doing lately with JD Sports.

Waiting for the right moment

But on other occasions, I find a share I like but at a price that I do not. So I add it to my watchlist. In the event that its price tumbles, I plan to revisit the investment case to decide then whether to invest.

One such share on my radar is FTSE 100 engineering specialist Spirax Group (LSE: SPX). Over decades, it has built a sizeable and profitable business by targeting industrial users with services such as bespoke steam engineering components.

Steam may seem like a technology of the past but in fact it is a vital part of many industrial processes. With its expertise, global reach, large client base and ability to deliver unique solutions, Spirax has developed significant pricing power.

The company’s cash generation has enabled it to grow its dividend per share annually for decades.

Unsurprisingly, the market likes this and Spirax shares sell for 31 times earnings. That valuation is too rich for me. After all, the company faces risks including ongoing weak demand in its China business.

However, I will continue to keep Spirax firmly on my radar!

The post Up 15% this year, can the FTSE 100 keep climbing in 2026? appeared first on The Motley Fool UK.

However, by investing prudently in high-quality, dividend-paying companies, individuals can seek to match or even exceed the State Pension. And with UK stocks having some of the most generous dividend policies in the world, investors are spoilt for choice.

In fact, at its current payout, just 7,212 Spirax Group (LSE:SPX) shares can offer the same payout as the State. And with a 26-year track record of hiking shareholder payouts, the stock could be a lucrative goldmine of passive income.

So how much do investors need to buy the roughly 7,200 shares needed? And is it actually a good idea?

Crunching the numbers

Most UK shares tend to trade below the £10 mark. Sadly, Spirax isn’t one of them. Rather, due to a relatively low number of shares outstanding, the stock trades closer to £70. Therefore, to build a 7,212 share position, an investor would need around £508,450.

Needless to say, that’s pretty substantial. Even with a high dividend per share, the company’s phenomenal track record of expanding cash flow and dividends hasn’t gone unnoticed. With more investors snapping up shares, the company enjoys a fairly significant premium to its market-cap, resulting in a relatively low 2.4% yield.

Considering there are other FTSE 100 stocks offering yields closer to 6%, Spirax doesn’t exactly seem like a terrific bargain right now. However, given enough time, that could change.

On average, management’s increased dividends by around 10% a year. So while the yield isn’t very impressive right now, in the long run it could compound into something far more spectacular. And by reinvesting dividends along the way, investors may not actually need channel half a million to enjoy an extra £12,000 annual passive income.

Is Spirax a good investment?

As a leading thermal and fluid engineering specialist, Spirax is a critical piece within the industrial processes value chain that countless other industries rely upon. This includes the healthcare sector, pharmaceuticals, transportation, energy, and even food production.

None of these industries is at risk of disappearing anytime soon. What’s more, they’re also highly resilient to economic downturns, enabling Spirax’s cash flows to benefit as well. With that in mind, it isn’t so surprising to see the business continue to exceed expectations and outperform in 2025.

Is it a perfect investment? Of course not – there’s no such thing.

Analysts have started flagging potential headwinds coming from artificial intelligence (AI), specifically the risk of industrial optimisation enabling longer equipment replacement cycles as well as shifting demand patterns.

In both cases, that’s potential headwinds that could hamper future sales and dividend growth. And with a premium valuation, a slowdown could open the door to unwanted volatility.

Despite these threats, I remain optimistic. Management’s proven its ability to navigate through cyclical and structural shifts throughout the company’s history. And while there are high-yielding dividend stocks out there, I think income investors may still want to take a closer look.

The post 7,212 shares of this dividend goldmine pays an income equal to the State Pension! appeared first on The Motley Fool UK.

That has got me thinking about the possibility of a stock market crash. October has seen some of history’s biggest crashes. Could the same be true this year?

Market timing’s impossible

The answer is, nobody knows. It is not possible to time the market with absolute confidence. Instead, what investors have to do is make their own guesses about what will happen.

Those can be very educated guesses – but ultimately they are still just guesses.

I do see multiple warning signals flashing in the stock market right now that could suggest it is overvalued or perhaps is on its way to a crash. The heavy focus on just a small number of US tech stocks is one, while the dizzying valuation of some of those shares is another.

But markets can seemingly defy economic gravity for long periods. So although I see some potential indicators of a looming stock market crash, that does not necessarily mean there will be one next month – or even in the next decade.

Here’s why I’m taking action now!

So am I sitting on my hands just waiting to see whether there is indeed a crash (or a stock market correction) any time soon? No.

I have been doing a couple of things that I see as good practice for me as an investor, regardless of what actually ends up happening in the stock market.

One of those is to review my portfolio and see whether there are any shares I think it makes sense to sell at their current valuation so I can take profits off the table. In reality, I have not been doing much of that over the past few months – but I have made some sales.

Hunting for possible bargains

The greater part of my preparation for a potential stock market crash (whenever it may come) has been hunting for shares that I would be happy to own, if only I could buy them at what I see as an attractive price.

By maintaining a list of such shares, hopefully I will be ready to act immediately in the event that a stock market crash does send prices sharply downwards.

Such windows of opportunity can be short-lived, so preparation in advance is important in order to seize them.

One share I’m eyeing

As an example,  one of the names on my list of shares to buy if the price moves down far enough is engineering company Spirax Group (LSE: SPX).

The Spirax share price is lower than it was at the start of 2025 – but only by 2%! That means it still trades for 31 times earnings. That is more than I would like to pay.

Spirax’s focus on commercial clients means it is not a household name. But thanks to deep client relationships, bespoke engineering products and presence in many mission-critical areas, its business model is profitable.

Weak demand in the company’s thermal solutions division remains an ongoing risk to revenues. But I will happily buy the share – at the right price.

The post Planning for a stock market crash? I am! appeared first on The Motley Fool UK.

That could make the growth narrative far more attractive. When interest rates rise, the present value of future earnings decreases, but when rates fall, the opposite occurs.

In other words, the Fed’s move could give growth stocks fresh momentum — and the FTSE 100 isn’t short of companies with strong exposure to international markets.

Spirax Group

Spirax Group (LSE: SPX) is a fascinating case study. The company provides industrial and commercial steam systems, electrical thermal energy solutions and niche peristaltic pumps. In 2022, it acquired Durex International Corporation, a US-based specialist in electric thermal solutions.

Between 2010 and 2020, the stock made spectacular gains, but since the pandemic, it’s struggled, sitting 34% lower over the past five years.

However, a mild recovery has already begun, and a low-interest-rate environment could provide the extra boost it needs. In August’s results, the company forecast faster second-half sales growth thanks to a strong order book, following a better-than-expected rise in the first half. This was an encouraging turnaround, especially after earlier warnings about order delays and lower demand in China and South Korea. It’s also outlined steps to counter tariffs, which could ease concerns about international headwinds.

Broker CFRA recently raised the stock to a Buy, lifting its price target by about 20%. That kind of analyst confidence is a sign that the market could be re-rating Spirax’s potential.

But risks remain. Any slowdown in global industrial demand or renewed weakness in Asian markets could weigh heavily on performance. Investors need to weigh up whether the strong fundamentals and history of growth are enough to offset those uncertainties.

JD Sports

Then there’s JD Sports (LSE: JD). The retailer has built its reputation on rapid international expansion, yet the shares have suffered recently, down 42% since late 2020. Consumer weakness has been a big part of the story.

Now, the stock looks attractive from a valuation perspective. With a forward price-to-earnings (P/E) ratio of 7.4, it appears cheap compared to the earnings forecasts. The company has guided for fiscal 2026 adjusted pre-tax profit in line with market consensus at around £885m, with about £350m expected for the first half. Analysts expect a 2% decline in like-for-like sales in upcoming results, but project a recovery after that.

The risk here is competition. The sportswear market is fiercely contested, and JD can’t afford a slip-up in execution. Margins could also come under pressure if pricing wars intensify. 

Overall, I think it’s a stock worth considering for value investors looking for exposure to fresh growth potential in the retail sector.

Eyeing long-term growth

So are growth stocks back in fashion? I think there’s a strong case. The Fed’s rate cut could signal a friendlier environment for businesses focused on expansion rather than income. 

While it’s never wise to simply chase the hottest names, I reckon it’s worth weighing up embattled companies like Spirax and JD. Both showing signs of recovery, they could help bolster the growth potential of a long-term portfolio.

The post Are growth stocks finally back in fashion? These 2 British blue-chips look promising! appeared first on The Motley Fool UK.

As Buffett puts it: “Be fearful when others are greedy and greedy when others are fearful”. With stock markets on fire and some investors looking increasingly greedy, is now the time to be fearful?

What’s Buffett doing?

I think it may be. So I reckon, does Buffett. In fairness we do not know exactly what the ‘Sage of Omaha’ is thinking. But his behaviour can offer us some clues.

Buffett’s company Berkshire Hathaway has continued to sell down a large part of its biggest shareholding, Apple, turning huge paper profits into hard, cold cash.

In the most recently reported quarter, Berkshire’s cash position hit an all-time high of $344bn.

Those data points make me think Buffett might be looking around at some of the greed in the current market and behaving somewhat fearfully.

Putting theory into practice

Sitting on a pile of a few thousands pounds of spare cash is more likely to be the case for a private investor than a spare $344bn! But I think there are still lessons to be learnt from Buffett’s aphorism as markets hit new highs.

Sitting on cash while markets soar can feel like missing out on opportunities. But a different way to look at it is waiting prepared for future opportunities when markets crash, as sooner or later they do at some point in the economic cycle.

Buffett does not simply sit twiddling his thumbs when not investing. Each day he spends hours reading about companies, scouring the market for potential long-term investment ideas.

One share on my watchlist

I have been doing the same. We know from Berkshire’s ownership of companies like Precision Castparts that Buffett sees the commercial appeal of a well-run engineering company with specialist expertise, proprietary products and a long-term customer base.

So do I, which is one reason I like the look of FTSE 100 engineer Spirax Group (LSE: SPX). It is not a household name, understandably given its business-to-business focus. But a company cannot raise its dividend annually for 55 years – as Spirax has done – without getting a lot of things right, for a long time.

The problem for me is one of price. Spirax shares sell for 33 times earnings per share.

That is too pricey for my tastes. I am fearful of risks such as ongoing weak industrial demand in China eating further into Spirax’s profitability.

But if markets cool and Spirax’s share price falls to what I see as an attractive level, I will be happy to add it to my portfolio.

I am fearful of overpaying in today’s record-beating markets. Like Buffett, I am spending time hunting for brilliant shares I would like to buy if I could do so at an attractive price.

The post I’m taking Warren Buffett’s advice as markets hit record highs appeared first on The Motley Fool UK.