Investment ideas for a Stocks and Shares ISA

Keen to broaden his knowledge, Andrew Mackie explores two mega trends with the potential to open up investment opportunities for his Stocks and Shares ISA.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Smart young brown businesswoman working from home on a laptop

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

One key investment principle of Warren Buffett is only to invest in companies within one’s “circle of competence”. That’s why I’m always researching. In so doing, not only am I increasing my knowledge base but also improving my prospects of identifying opportunities for investments to add to my Stocks and Shares ISA.

Outside of artificial intelligence, I’m particularly excited by two mega trends that have the potential to unlock an array of investment ideas.

Energy transition

The transition of the global economy from fossil fuels to renewable sources of energy represents the biggest investment opportunity of a generation, I feel. Indeed, it’s also one that Maven Capital Partners has identified as part of a range of sectors that could be worthy of consideration for the potential of long-term high returns.

Passive income stocks: our picks

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

However, a lot of investors apply a very narrow lens when deploying capital in this space. Although they’re key industries, renewables is a lot more than simply wind and solar.

Hydrogen is one market that I’m actively looking into. In the UK alone, the government has committed to deliver 10GW of low carbon hydrogen production by 2030.

Technologies in this space are at an early stage and therefore most investment would be via private equity putting money into start-ups. That said, a critical enabler of the hydrogen ecosystem relates to transport and storage infrastructure.

Given the long development lead times and high capital requirements, infrastructure projects are more suited to established players such as National Grid. Oil majors BP and Shell are active too.

Electrification metals

One key industry I predict will boom as a result of the green revolution is mining. Collectively, electrification metals including copper, cobalt, zinc, nickel and silver are a key constituent of an array of low carbon technologies.

As demand for these metals grows exponentially over the coming decades, shortages are inevitable. Long lead times in discovering and bringing online new reserves of these metals will exacerbate the situation.

I particularly like Glencore and Anglo American. Both are established players, paying healthy dividends and to me are cheap relative to their prospects.

Cybersecurity

I think another sector likely to experience explosive growth this decade is cybersecurity — another that Maven Capital Partners has touted. The Department for Science, Innovation and Technology 2023 survey data estimate that there were 2.4m instances of cyber crime in the last 12 months.

In the short term, cyber budgets could well come under pressure. As highlighted in the following chart, cyber security has dropped down the agenda for many businesses. Interview data suggests that high inflation and general economic uncertainty are to blame.

Source: Department for Science, Innovation and Technology

However, as the frequency and severity of breaches grow, businesses of all sizes will be forced to confront this challenge.

Research by Fortune Business Insights estimates that the global cyber security market is predicted to grow at compound annual rate of 13.8% out to 2030. Consequently, I’m actively seeking to improve my expertise in this area and to identify companies with long-term potential.

Given the number and diversity of organisations operating in the space, I don’t feel confident enough to invest in individual companies. Therefore, I’m more interested in picking a sector-specific exchange-traded fund (ETF). Two ETFs that I feel match my risk tolerance are the iShares Digital Security UCITS and Legal & General Cyber Security UCITS. I expect to add both to my portfolio when funds permit in the coming months.

This AI stock is becoming a digital juggernaut in a £ 12.5 billion market!

🤖 Curious about the next big player in AI? 🤖

Our leading industry analysts have uncovered a trailblazing content platform that's revolutionising the industry with its unparalleled generative AI technology, setting new standards in creativity and efficiency.

Care for a sneak peek?

Trusted by global giants like Amazon, Disney, and Netflix, this innovative company is not just transforming digital media with AI-generated 3D content but is also capturing a significant share of a £12.7 billion market!

With a remarkable 62% gross margin, indicating exceptional profitability and operational efficiency, this company's growth trajectory positions it as a must-watch for savvy investors.

Best of all, we're offering exclusive access to the name of this game-changing stock, absolutely free!

Discover your free AI stock pick

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Andrew Mackie has positions in BP, Shell, Glencore and Anglo American. 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.

More on Investing Articles

A pastel colored growing graph with rising rocket.
Investing Articles

Here’s how long it’s taken £1k of Nvidia stock to turn into £10k today!

Our writer explains how money invested in Nvidia stock less than three years ago has grown in value over tenfold…

Read more »

Thoughtful man using his phone while riding on a train and looking through the window
US Stock

3 red flags I’m seeing right now for the S&P 500

Jon Smith points out some concerns he has with the S&P 500 at current levels and picks one stock he's…

Read more »

UK financial background: share prices and stock graph overlaid on an image of the Union Jack
Investing Articles

UK dividend shares are outperforming US tech stocks!

UK dividend shares aren’t just for passive income investors. Over the last 12 months, they’ve been outperforming their US tech…

Read more »

DIVIDEND YIELD text written on a notebook with chart
US Stock

Here’s how much passive income an investor could make with £2k in Meta stock

Jon Smith looks at Meta stock from a different angle to normal, considering it as an option for an investor's…

Read more »

Young black colleagues high-fiving each other at work
Investing Articles

1 of my top UK shares is up 15% in a day! Is it still a buy for me?

Celebrus shares are soaring after strong full-year results. At a P/E ratio below 13, is it one of the best…

Read more »

Close-up of children holding a planet at the beach
Investing Articles

£10,000 invested in Jet2 shares 2 years ago is now worth…

Jet2 shares have surged in recent months and finally appear to be pushing towards fair value. Dr James Fox shares…

Read more »

piggy bank, searching with binoculars
Investing Articles

This FTSE 100 blue-chip could rise 26% in 12 months, according to brokers

While this FTSE 100 dividend stock has put investors through the wringer in recent years, some analysts see brighter skies…

Read more »

Businessman hand stacking money coins with virtual percentage icons
Investing Articles

A 3-step passive income strategy to target major wealth

Want to invest in the stock market to build up a passive income stream? There's no fiendlishly complex multi-step mystique…

Read more »