3 reasons to start buying shares this week

A lot of people wait years or decades before putting their investing dream into action – if they ever do it at all. But if I had never invested before and was waiting to start buying shares, I think now could be a great time to do so. That is exactly what I am doing at the moment, although I am not a first-time investor.

Here are three reasons why.

1. Attractive stock market valuations

The key to successful investment is buying the right share at the right price, although another way to think about that is ‘at the right time’. The past several years have been bruising for the economy.

One consequence of that is a lot of shares in high-quality companies have been trading relatively cheaply. A common way of valuing shares is to use a price-to-earnings (P/E) ratio, basically dividing a company’s market capitalisation by its profits. Right now a lot of companies I think are attractive sell at low P/E ratios.

Normally, the lower a P/E ratio is, the cheaper the company’s valuation. Next is on 11, Legal & General is at 6 and Barclays is at 5. That could reflect risks that investors think might hurt future earnings. Indeed, although Barclays has a low P/E ratio, I have no plans to buy any bank shares for my portfolio in the near future as the banking industry continues to face considerable uncertainty in my view.

But the overall picture of the UK stock market is one in which a lot of good companies are selling for attractive prices. That could suddenly change, so I am snapping up bargains right now while I can.

2. Looming Stocks and Shares ISA deadline

Next week is the deadline for current contributions to a Stocks and Shares ISA in the current tax year.

This runs on a ‘use it or lose it’ principle. After the deadline, I will be able to contribute to next year’s ISA. But any unused portion of my GBP20,000 allowance for the present year will expire forever.

That is not necessarily a reason for me to rush out and start buying shares, to be clear. The deadline is for contributions, so I could put money into my ISA before the deadline even if I do not have any immediate plans to buy shares. But with so many bargains on offer at the moment, I am ready to buy.

3.

Taking the long-term view

I believe in long-term investing. But how long is the long term? Basically, the sooner someone starts investing, the longer their overall timeframe as an investor will be.

That can help them benefit from the positive impact time can have on investment results. There is a caveat, which is that even good shares can be too expensive, just as sometimes they might be selling for much less than they are worth. So I would not start buying shares immediately unless I felt I could find shares in great companies selling at attractive prices.

Fortunately, in today’s market, I think there are lots of those about!

Tags:

gourmet-burger-kitchen listed on couponmatrix.ukgroupon listed on couponmatrix.ukmahabis listed on couponmatrix.ukmcdonald-s listed on couponmatrix.uknordvpn listed on couponmatrix.ukvegamour listed on couponmatrix.uk
gourmet-burger-kitchen listed on couponmatrix.ukGourmet Burger Kitchen brought fancy 100% beef burgers to London in 2001, and since then, there’s been no turning back! The Gourmet Burger Kitchen menu is brimming with culinary delights, from the mighty double beef burger with crispy bacon to the mouthwatering jerk chicken burger, and even the delectable Beyond Meat burger for your plant-based pals. Indulge in the best burger in town using our Gourmet Burger Kitchen offers – simply show it to your server, and they’ll deduct the cost from your food bill!
groupon listed on couponmatrix.ukGroupon unlocks a world of savings on getaways, beauty treatments and restaurants – starting with your local community. Partnering with thousands of retailers across the country, at Groupon you’ll unearth hidden gems in your area or book a meal in your favourite eatery at a significant discount. You’ll even bag an extra discount on incredible experiences or goods with a Groupon discount code. It doesn’t matter if you’re looking for a fun place to spend time with your friends, a romantic restaurant for a date or you’re planning a short break abroad to catch some sun – Groupon’s got you covered with trips and experiences to let you live life to the fullest. From mattresses to flights, choose Groupon and you’ll never have to worry about overspending on everyday necessities or once-in-a-lifetime experiences.
mahabis listed on couponmatrix.ukmahabis has revolutionised the humble slipper, creating a super comfortable, highly durable design that can be worn both inside and outside. Make the most of a mahabis discount code to cut the cost of the premium quality price tag. With a 100% wool lining, adaptable foam footbed and durable hybrid sole, these are slippers like no other - and with plenty of styles to choose from, you’re sure to find the perfect pair for you!
mcdonald-s listed on couponmatrix.ukAs one of the biggest brands in the world, McDonald’s needs no introduction. The golden arches bring on feelings of excitement in the minds and mouths of hungry passers-by and have done for more than a few decades. No matter where you are in the world, McDonald's will serve some of the most favoured food around and with McDonald's vouchers from us, you’ll spend less than ever on your next dine-in, takeaway, drive-through or even home delivery order.
nordvpn listed on couponmatrix.ukNordVPN provides peace of mind internet security, ensuring your privacy is protected so you can browse securely and without restriction. Staying safe doesn't have to cost the earth - with a NordVPN coupon you can lock in your VPN subscription for less. Your subscription will provide complete online privacy, secure connections (even with public networks), and access to location-restricted sites. Stay seamlessly connected thanks to NordVPN.
vegamour listed on couponmatrix.ukPlant-based powerhouse Vegamour has earned a special place in our bathroom cabinets. Vegan and science-backed, the hair growth serums, hair foams and shampoos are really affordable and full of ingredients that your hair loves. Try out Vagamour’s famous hair serum for A-lister locks with a Vegamour promo code from Groupon to keep the price under control. There’s a Vegamour voucher code just for new customers, free delivery on orders over £50 and a fabulous 90-day money-back guarantee to make you feel totally confident in your purchase.