UK shares to buy now: how I’d invest my first £10,000

If he was starting his investment journey today, Harshil Patel would consider these top UK shares to buy now for his 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.

One English pound placed on a graph to represent an economic down turn

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

Everyone is at a different stage of their share-buying journey. I’m not a novice, but today I’m looking at which UK shares I’d buy now if I was. 

Let’s say I’m investing my first £10,000. That’s not a small amount and I could buy many different stocks. But dealing fees mean buying that might not be cost-effective. Instead, I would start by investing £5,000 in a diversified fund within a Stocks and Shares ISA.

Fund time

It would have to be a well-managed fund, and for my first investment, I’d prefer a global approach. Although the UK has some phenomenal shares, some of the largest and fastest-growing companies are found in the US.

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

I’d like the fund to be concentrated and want the fund managers to have conviction in their stock picks. So rather than holding hundreds of companies, I’d like to see around 30. Bear in mind though, a  few wrong selections could have a greater impact on the fund’s overall performance.

There’s one fund that springs to mind that ticks all of those boxes: Fundsmith Equity. Founded and run by renowned fund manager Terry Smith, Fundsmith has returned an impressive 19% per year over the past 10 years. 

More UK shares to buy now

I’d split the remaining £5,000 between several UK shares. As a first-timer, I’d stick to established-but-growing companies that I feel could thrive for many years. My five picks are:

  • Fashion retailer Next
  • Fantasy miniatures expert Games Workshop
  • Homewares retailer Dunelm
  • IT expert Softcat
  • Sofa seller SCS

My Top 5

I’d consider clothing-to-homewares retailer Next to be one of the highest quality UK shares to buy now. It’s incredibly well run, respected CEO Lord Wolfson has been running the company for 20 years, and it has an excellent track record of earnings growth and cash generation. That said, the industry is competitive and online-only retailers like Boohoo are keeping Next on its toes.

Games Workshop is another UK share with superb management, I feel. They take a long-term view when running the business. I like that this fantasy miniatures company generates high returns and profit margins. It could struggle if new users disengage from the hobby post-pandemic, however. That said, it owns much intellectual property and I’m looking forward to seeing more games and movies based on characters from its universe. 

Dunelm is a leading homewares retailer that I’d consider. It’s been seeing strong sales growth recently in what it describes as a “buoyant homewares market”. Despite some uncertainty in the short-term economic outlook, I’m confident pent-up demand from customers could continue for some time.

Softcat is an IT services company that’s proud of its strong customer service. It manages to consistently generate high returns, recent earnings have been strong and the company is confident in its outlook. Although the macroeconomic outlook is uncertain, I like that it’s successfully finding new customers and selling more to existing clients.

Finally, sofa seller SCS is one of my top UK shares to buy now. I like that it has a solid balance sheet and plenty of cash. Recent strong trading has been encouraging with more time spent at home having persuaded many people to invest in some new furniture. That said, this could only be temporary. Its share price is up by 116% over the past year, yet I think there’s still further room for growth. 

However, don’t buy any shares just yet

Because my colleague Mark Rogers – The Motley Fool UK’s Director of Investing – has released this special report.

It’s called ‘5 Stocks for Trying to Build Wealth After 50’.

And it’s yours, free.

Of course, the decade ahead looks hazardous. What with inflation recently hitting 40-year highs, a ‘cost of living crisis’ and threat of a new Cold War, knowing where to invest has never been trickier.

And yet, despite the UK stock market recently hitting a new all-time high, Mark and his team think many shares still trade at a substantial discount, offering savvy investors plenty of potential opportunities to strike.

That’s why now could be an ideal time to secure this valuable investment research.

Mark’s ‘Foolish’ analysts have scoured the markets low and high.

This special report reveals 5 of his favourite long-term ‘Buys’.

Please, don’t make any big decisions before seeing them.

Secure your FREE copy

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.

Harshil Patel owns shares of Games Workshop and boohoo group, and units in Fundsmith Equity. The Motley Fool UK owns shares of and has recommended Games Workshop and Next. The Motley Fool UK has recommended Softcat 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.

More on Investing Articles

piggy bank, searching with binoculars
Investing Articles

Could this small-cap AIM share be the next big UK growth stock?

Growth stocks can supercharge a portfolio, but come with risks. I'm eyeing one small-cap AIM share that could be a…

Read more »

House models and one with REIT - standing for real estate investment trust - written on it.
Investing Articles

With a low valuation and 5.2% dividend yield, is this the best income stock on the S&P 500?

Mark Hartley explores whether VICI Properties, with its low valuation and 5.2% dividend yield, could be one of the best…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

Is the Diageo share price becoming too cheap to ignore?

The Diageo share price has been falling for almost three years now. And Edward Sheldon believes the stock is starting…

Read more »

Engineer Project Manager Talks With Scientist working on Computer
Investing Articles

Down 26% in a year, is this FTSE 100 stock a bargain?

Despite 30 consecutive years of dividend increases, Croda International shares are well off their highs. Is this a buying opportunity…

Read more »

A senior woman and young girl help out in the greenhouse at the local farm.
Investing Articles

See how much an investor needs in a SIPP to earn passive income of £777 a month

Harvey Jones is building retirement wealth in a Self-Invested Personal Pension. How much does he need to fund a generous…

Read more »

ISA coins
Investing Articles

Here’s how a £20k ISA could earn £1,400 in passive income next year – and every year

Christopher Ruane digs into the practicalities of using a Stocks and Shares ISA to start generating sizeable annual passive income…

Read more »

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

A top UK share to consider buying when the markets melt down?

With investor nervousness on the rise, Zaven Boyrazian explores the category of UK shares that could potentially outperform during the…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

Invest like Warren Buffett? Here are 3 simple ways to do it

Warren Buffett’s spent decades investing. Our writer discusses a trio of his investment principles he’s applying himself.

Read more »