Shares to buy now: how I’d invest £1,000 today

If our writer had £1,000 to invest in British stocks today, his shopping list would include these shares to buy now for his portfolio.

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The stock market can go through long periods when little happens, then suddenly become frenzied. The past couple of years have certainly been lively. As uncertainty looms over the economy, I have been considering what shares to buy now for my portfolio that I think have good long-term prospects.

If I had £1,000 to invest right now, here is how I would invest it evenly across two growth shares and a couple of income picks.

Growth options

The decline in the boohoo share price over the past year has seen the shares shed 78% of their value in that time frame. The shares had started to regain ground lately but have been heading downwards again in recent days.

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I do see risks to profits from input cost inflation and higher shipping costs. But the company has been growing revenues at a fast pace and has had a consistently profitable business over the past few years. Upcoming annual results may cast last year’s profitability in a bleaker light. But in the long term, I expect the online retailer to keep expanding its customer base. That should be good for profits. I see the boohoo share price fall as a buying opportunity for my portfolio.

The second growth choice for my portfolio is homeware retailer Dunelm. It has lost 33% of its value in the past year and hit a 12-month low in today’s trading. Like boohoo, it faces a risk from inflation. A tightening economy could also mean customers spend less money doing up their homes, hurting revenues and profits at Dunelm.

But I continue to see strong growth potential here. Last quarter’s revenues were 69% higher than the same quarter last year. The nine months to March saw sales grow 25% compared to the prior year equivalent. With a 3.6% yield and price-to-earnings ratio of 15, I would consider Dunelm among the growth shares to buy now for my portfolio.

Income shares to buy now

I would also consider some shares to buy now that could boost my passive income.

One is insurer Direct Line. It trades on a P/E ratio of 11 and yields 8.9%. Such a high yield could signal some risk the market sees. I do think rising car prices could hurt profits at the company in the short-term as they impact claim settlement costs. But the business has a robust model focussed on markets like home and motor insurance that I think will see strong continued demand. Its iconic red telephone logo also gives it an advantage in attracting customers.

The other income pick I would buy right now for my portfolio is tobacco maker Imperial Brands. The owner of iconic brands like Winston and Lambert & Butler has pricing power. That could allow it to offset the risks to profits from falling cigarette sales in many markets. It is also developing non-cigarette product ranges that could benefit from those strong brands. With a dividend yield of 8.5%, it is on my list of shares to buy now for my portfolio.

Pound coins for sale — 31 pence?

This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 10%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

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.

Christopher Ruane owns shares in Imperial Brands and boohoo group. The Motley Fool UK has recommended Imperial Brands and boohoo group. 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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