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:

britbox listed on couponmatrix.uknorwegian-air listed on couponmatrix.ukparcelforce listed on couponmatrix.ukparcelhero listed on couponmatrix.ukpatpat listed on couponmatrix.ukshopto-net listed on couponmatrix.uk
britbox listed on couponmatrix.ukFind your next binge watch at BritBox, the subscription service packed with the best British shows like Downtown Abbey and Made in Chelsea. Register for the BritBox free trial to try it for seven days without paying a penny and start exploring box sets from the BBC, ITV, Channel 4 and Channel 5. Get all this great telly and more with Groupon’s help: we’ve found all the BritBox voucher codes you need to cut the cost of your subscription and stream the night away for less!
norwegian-air listed on couponmatrix.ukTake to the skies with Norwegian Air and whether you’re travelling for business or pleasure you’re in for a high quality yet low cost treat. Use your Norwegian Air discount code to cut the cost of your flight without compromising on comfort, and journey to more than 150 destinations worldwide without breaking the bank. With affordable basic tickets and an array of add-ons for your convenience, you need never spend more than necessary with Norwegian Air on board.
parcelforce listed on couponmatrix.ukDon’t risk your precious parcels being lost in the post. Send and receive parcels securely with the trusted delivery services of Parcelforce. Once part of the Royal Mail, Parcelforce has continued the upstanding deliveries, making sure all your packages get from A to B safely. The next time you need to pop something in the post, use your Parcelforce discount code and save both money and hassle. Operating out of depots across the UK, you’re never far from Parcelforce.
parcelhero listed on couponmatrix.ukSend your parcels in the smartest way possible with ParcelHero, and allow this delightful delivery service to save the day! Grab a ParcelHero discount code from us to cut the cost of sending gifts to your loved ones or sending out products to customers. You’ll soon find that superhero speed and efficiency doesn’t have to cost an arm and a leg! With reliable couriers like DHL, TNT and UPS on the books, you can count on ParcelHero to get your goods from A to B at a very pocket-friendly price.
patpat listed on couponmatrix.ukKeeping up with your child’s wardrobe is an easy and affordable process with PatPat, the go-to supplier of kids fashion from babies up to ten years old. Offering everything from matching outfits for mother and child to eco-friendly cloth diapers, you’ll have more than enough items to secure savings on with the latest PatPat discount code. From dungarees to zipper jackets, you can suit up your kid for any occasion at PatPat.
shopto-net listed on couponmatrix.ukWelcome to ShopTo, the ultimate provider of games, gaming consoles, PCs, accessories and more. If you love gaming, ShopTo will kit you out with the latest releases, as well as powerful laptops, computer components to create your own PC, and the latest technology to crush the competition. With ShopTo vouchers you can enjoy the best tech in gaming for less. Love gaming with ShopTo.