2020 is well over half way through, with plenty happening to move the stock market so far this year. There are several risk events for the months to come, some of which I’ve written about here. But as well as risks, the movements in the market present some great opportunities for long-term investors to buy UK shares right now. Doing so could enable larger returns than normal, due to the depressed levels of some share prices after the stock market crash. With that in mind, below are two of my favorite UK shares I’d buy now.
Making use of a Stocks and Shares ISA
I house any UK shares I buy within my ISA. This is to allow me to benefit from not having to pay capital gains tax. When I sell any stock in my ISA, I get to keep 100% of the sale value. This means no capital gains tax on my profits, ultimately rewarding me for when I make a good call. For this year, the allocation is £20,000, so there’s plenty of scope there to buy and hold good UK shares that you like.
UK shares I’d buy now
The first stock I’m keen on is Rightmove. The online property portal is well known to the public, and generates revenue from the estate agents themselves. However, this revenue dried up during the first half of the year due to the coronavirus. In a recent trading statement for H1, Rightmove said that revenue fell 34% and operating profit 43%.
Yet with recent announcements regarding a stamp duty holiday, and lockdown easing allowing viewings again, I think the tide could turn quickly. That’s why I’d be buying shares right now, in anticipation of much stronger results in the second half of the year.
The second UK share I’d buy now is Lloyds Banking Group (LSE: LLOY). There’s a lot of commentary put out regarding the bank, which isn’t surprising considering it’s one of the most traded stocks on the FTSE 100. The first half of the year was tough for Lloyds. Large bad loan provisions had to be made and set aside due to the virus. Consumer spending significantly dried up, and as a UK bank with a primary focus on the retail market, this was bad news.
The share price is at levels not seen since 2012, having fallen below 30p a few weeks back. In a similar way to Rightmove, I think the tide could turn very quickly for Lloyds. Consumer spending is already showing signs of picking up. June retail sales data showed an all-time record increase from the previous month, which was another record in itself. If consumers continue to spend more, then this should have a positive knock-on impact for Lloyds.
Why buy now?
Even if you weren’t planning a large investment, I’d still suggest investing now. The stock market moves and digests information very quickly. The two stocks mentioned above could see a move higher in the short term as other investors come to the same conclusions I have. Ultimately, this could eat into your potential profits as you’d have to buy the stock at a higher price that you can at the moment.
The post 2 UK shares I’d buy now for my 2020 Stocks and Shares ISA appeared first on The Motley Fool UK.
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jonathansmith1 owns shares in Lloyds Banking Group. The Motley Fool UK has recommended Lloyds Banking Group and Rightmove. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
Motley Fool UK 2020