My Stocks and Shares ISA performed quite well in 2024. But the reality is the general performance of the market’s been a big contributor to its gains.
The good news is there’s a lot of optimism out there for 2025. Trading and investing platform eToro recently surveyed 10,000 retail investors from 12 countries. Around 59% believe the bull market will continue next year.
Modest UK valuations
Nevertheless, analyst Sam North from eToro said high retail investor sentiment sometimes leads to a market pullback. However, US stocks often perform well when a new President starts.
I reckon American investors tend to be enthusiastic much of the time, which leads to some of the high company valuations often seen across the pond. The survey revealed optimism about some of the popular names such as Tesla, Apple, Amazon, Nvidia and others.
Here in the UK, I’d argue we tend to be more reserved with a stronger focus on valuation. Meanwhile, all the general economic challenges and shocks of the past few years have left many UK companies looking cheaper than their US peers.
My guess is that general sentiment in the UK may be less optimistic than eToro’s survey suggests. But for investors with a long-term mindset, such a situation can be an opportunity to find decent value in the stock market.
Sometimes it can pay to adopt a bit of a contrarian mindset. When valuations have been beaten down, any positive company or general economic news ahead can ignite share prices. So I reckon there’s a fair chance of a bull market for UK shares through 2025.
I’ve been preparing by working hard on my watchlist and buying shares now for my stocks and shares ISA. For example, I’m attracted to Billington Holdings (LSE: BILN). The company looks like it’s been unloved and out of favour with investors for some time, resulting in a low valuation.
Ahead of expectations
However, in December, the structural steel and construction safety solutions specialist released a positive trading update. The directors upgraded the profit forecast and said the full-year results for 2024 will be ahead of previous expectations.
The announcement moved the share price higher and it’s possible the business may drive further gains ahead for shareholders.
Chief executive Mark Smith said the firm has a “solid” order book and a “very healthy” pipeline of future opportunities that are close to conversion.
Meanwhile, with the stock in the ballpark of 499p, the forward-looking price-to-earnings (P/E) ratio’s around nine for 2025. I think that valuation looks undemanding when the outlook for the business is so optimistic.
However, although the company has a strong-looking balance sheet it operates in a cyclical sector. So there’s a risk of volatility in the business ahead for long-term shareholders. It’s also a small company with a market capitalisation of just £65m or so, suggesting even more uncertainty.
Nevertheless, I see the stock as well worth investors’ further research and consideration time now as a potential investment for 2025 and beyond.
The post How I’m preparing my ISA for the great stocks and shares bull market of 2025 appeared first on The Motley Fool UK.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has recommended Amazon, Apple, Nvidia, and Tesla. 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.
