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:

alton-towers listed on couponmatrix.ukdiggerland listed on couponmatrix.ukthe-dungeons listed on couponmatrix.ukpure-collection listed on couponmatrix.ukregatta listed on couponmatrix.ukvision-express listed on couponmatrix.uk
alton-towers listed on couponmatrix.ukAs Britain’s most-loved theme park, Alton Towers is home to over 40 thrilling rides and attractions that make it an amazing experience for the whole family. Adrenaline junkies can get their fix from famous rollercoasters like The Smiler, Nemesis and Oblivion while laid-back visitors can expect non-stop entertainment from the dozens of shows and fun activities. Younger guests can enjoy a whole host of children-only rides, too, featuring much-loved TV characters, plus live interactive events and more. When you use an Alton Towers discount code from Groupon, you’ll secure incredibly affordable tickets and enjoy all the adventure for less. Whether you’re visiting with friends or family, Alton Towers has something for everyone! If you find yourself needing further time to explore, catch a room at one of the two luxury hotels and rest up before another big day of adventuring.
diggerland listed on couponmatrix.ukDiggerland brings you an action-packed day of rides, fun and adventure in this digger-themed paradise. With locations across the country, Diggerland has been rated a five star attraction and exceptional day out. Get stuck into digger-themed games, operate some of the biggest diggers in the world, or enjoy attractions including a safari. With Diggerland vouchers you can enjoy a great day out for less. Take the whole family, go with friends, or even go on a date at one of the UK’s top attractions.
the-dungeons listed on couponmatrix.ukA fabulously frightening experience is available for all the family, with money to be saved upon entry with London Dungeons vouchers from us. Stages, sets, actors and special effects are brought together for fun-filled experiences in horrifying locations across the UK and Europe. Groupon wants to help bring history to life in all its gruesome detail, and is teaming up with the company to offer you a trip to The Dungeons without any excessive expense.
pure-collection listed on couponmatrix.ukNothing really beats the feeling of top quality cashmere, so discover a luxuriant world of incredible cashmere clothing with Pure Collection. Whether you’re picking up a cardigan or a scarf, save yourself a pretty penny on one of the UK’s favourite cashmere suppliers with a Pure Collection discount code from us. This gorgeous material truly transforms any outfit, both formal and casual, so see what’s on offer from Pure Collection today.
regatta listed on couponmatrix.ukFully experience the majesty of the great outdoors with Regatta’s comprehensive selection of clothing, accessories and essentials for the intrepid explorers among us. With a Regatta discount code, you can get out and about for less than you might think whilst taking advantage of Regatta’s expertise and passion for the natural world. With a philosophy of making going outside and exploring more accessible and affordable for everyone, Regatta is driven to create the highest quality products for the best prices so everyone can experience the great outdoors.
vision-express listed on couponmatrix.ukVision Express is your go-to for glasses, lenses and all things eyecare. Whether you’re looking for your first pair of glasses or want to try out a new brand of contacts, make the most of an awesome Vision Express offer to save on the essentials! As well as stylish frames and high quality contacts, Vision Express offers eye tests and online appointments for all of your eye care needs, too. With fast delivery and an easy to use online system, it's your one stop shop for eye health!