The 5 April deadline for using this year’s Stocks and Shares ISA allowance is less than two months away, and I’m wondering which are the best shares to buy right now.
I see the Stocks and Shares ISA as a terrific way to save for my retirement. All the capital growth and dividend income I generate on my portfolio will be free of tax for life. That means no income tax and no capital gains tax.
ISA tax breaks work well alongside a company or personal pension. When I invest in a pension, I can claim tax relief on my contributions, but any money I withdraw from age 55 is added to my earnings for that year and may incur income tax. If I can withdraw tax-free income from an ISA, I can limit this liability. So which are the best shares to buy today?
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I’m investing in FTSE 100 stocks
Right now, I’m looking for the best shares on the UK market. I think the FTSE 100 and FTSE 250 will perform relatively strongly over the years ahead, as they play catch-up after trailing rival markets. They may also get a boost from our turbo-charged vaccine rollout, provided mutant Covid strains don’t scupper that.
I think there are some exciting opportunities in the banking sector. Barclays, Lloyds Banking Group and NatWest Group could all benefit from a full-blooded UK recovery. I’m wary about HSBC Holdings though, as it faces a political squeeze between the US and China.
The banks look cheap and better still, are keen to restore their dividends. My worry is that if the hoped-for recovery flounders, banks could also fall faster than most.
I would say the same about mining stocks such as Anglo American, BHP Group and Rio Tinto, which I also reckon are among the best shares to buy right now. They will benefit from increased demand for metals and minerals if the world starts building and trading again, but struggle if mutant variants run rampant.
These are also among today’s best shares
I’m a longstanding fan of consumer household goods producers Reckitt Benckiser Group and Unilever, even though share price growth has disappointed lately. They sell everyday items consumers buy at any point in the economic cycle, and have shown resilience during the pandemic. Ironically, they could flounder if we get a full-blooded recovery, as investors are likely to pile into companies with greater bounce-back potential.
Pharmaceutical giants GlaxoSmithKline is one of my favourite income stocks on the FTSE 100 right now, yielding 6.3%, and I’m adding it to my best shares list. But a concern is that it needs to replenish its drugs pipeline and boost profits before it can increase its dividend further.
Those are some of the best that I can see right now, but as I do more research in the weeks ahead, I’ll hope to find a few more.
