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:

alexandra listed on couponmatrix.ukdr-martens listed on couponmatrix.ukjewson listed on couponmatrix.ukkaren-millen listed on couponmatrix.ukmagical-vegas listed on couponmatrix.ukpost-office-insurance listed on couponmatrix.uk
alexandra listed on couponmatrix.ukAlexandra have been the go-to workwear provider for gents and ladies for over 150 years supplying high end, hard-wearing yet stylish outfits for busy professionals in health, catering, construction and a host of other industries. When you redeem your Alexandra discount code you'll be investing in kit that's robust enough to withstand the demands of week after week in some of the most demanding professions around; you'll also be buying outfits that will look fantastic and reassure customers that they're dealing with a true professional at all times.
dr-martens listed on couponmatrix.ukDr. Martens has long been associated with rebels and misfits: a heritage that’s recognisable in every yellow stitch. Since the first pair of air-cushioned 1460s, Dr. Martens has become a counterculture symbol, innovative and effortlessly cool. These boots were made for walking, but they’re also made for fearless expression. Whatever your style, all you need is a Dr. Martens discount code to give your work wardrobe an edge with the Dr. Martens 1461 Oxford shoes or tower over your enemies in some Dr. Martens platforms.
jewson listed on couponmatrix.ukThere’s no task too large nor project too ambitious for the building whizzes at Jewson, experts in offering all the construction essentials anyone needs to start from the ground-up. Whether you need bricks and building supplies or power tools and cleaning equipment, a Jewson voucher code is all that’s required to get the machines and materials you need at a price below your budget. Even if you just need some advice or help planning a project, there’s always advice on hand from the experts at Jewson.
karen-millen listed on couponmatrix.ukCreated in England, but loved globally, Karen Millen fashions allow wearers to exude both confidence and style. Every collection is lovingly crafted and designed in-house, boasting only the finest quality. With a Karen Millen discount code, you can dip your toes into luxury for less. Shop from formalwear to footwear to everyday outfits all in gorgeous, unique designs featured on runways from London to New York.
magical-vegas listed on couponmatrix.ukMagical Vegas brings you all the thrills and spills you’d expect from the world’s premier entertainment mecca - accessible on your phone, tablet or laptop, with millions waiting to be won. Use the Magical Vegas promo code and you’ll give your bankroll a fantastic head start, giving you the confidence you need to hit the tables, deploy your best strategies and walk away wealthier.
post-office-insurance listed on couponmatrix.ukWhen checking out the Post Office’s huge range of insurance policies, you may be surprised to find that there’s barely an aspect of your life that you can’t get coverage for! Whether you want to ensure your pet is protected, are jetting off on your travels, or want to be safe on the roads, with your Post Office Insurance promo code, you can save on some of the top protection available. In operation for over 370 years, the Post Office is a name you can trust.