My Stocks and Shares ISA is largely empty at the moment, but not for long. I’ve just been offered a brilliant buying opportunity on a plate.
Normally, I’d be have started filling up this year’s ISA months ago, but I’ve been having too much fun populating my brand new self-invested personal pension (SIPP). That job is almost done, so now I’m switching to my ISA and I could hardly have picked a better time than today.
I love buying cheap UK shares, particularly in the middle of a stock market dip and we’ve got a big one today after December’s consumer price inflation figure came in higher than expected at 4%, smashing hopes that the Bank of England would soon cut interest rates.
Shares are cheaper today
The FTSE 100 has fallen 1.66% at I write (17 January) to a six-week low just over 7,400. January’s bumpy start has now wiped out all of December’s Santa rally. That’s fine by me, even though it has knocked the value of my existing holdings.
It doesn’t matter how much my portfolio is worth from one day to the next. Just as long as the overall trajectory is upwards. On days like today, stock market volatility works in my favour. My favourite blue-chips are now available at reduced prices and it’s a great time to buy them.
Housebuilding stocks have been hit particularly hard as interest rate cut hopes recede on today’s news.
Taylor Wimpey, one of my most successful stock picks of 2023, is 3.22% cheaper than it was yesterday. I’m scrambling around to find some cash to buy it at the reduced price, in case the dip proves shortlived.
Insurer and fund manager Legal & General Group is another favourite portfolio holding. As the FTSE falls, it has inevitably followed, having dipped 2.66% this morning. It’s another unmissable opportunity.
I’m investing for the long term
Both stocks pay generous dividends. Their yields are slightly higher today, because their share prices are lower. So by purchasing more I will be locking into a higher passive income stream. Right now Taylor Wimpey yields 6.71% and L&G yields a bumper 8.05%.
I’ve been screwing up my courage to buy volatile UK teck stock Ocado Group for months. In today’s risk-off environment, I can get it at a 3.75% discount. Commodity miner and trader Glencore, another stock I bought last year, is down 3.68% this morning. The yield has jumped to 8.34% as a result. I’m considering upping my stake.
When I started investing, I hated it when share prices fell. Now I have learned to love it and take full advantage. Naturally, there is no guarantee that my stock picks will recover, given the threats out there, including rocket attacks in the Red Sea. By purchasing in a dip, at least I reduce the downside risk if stocks fall further. I also increase my potential when share prices recover.
I’ve no idea when the next rally will arrive, but I’m buying cut-price shares for my Stocks and Shares ISA to make sure I’m ready when it does.
The post Today’s FTSE dip is an unmissable chance to load up my empty Stocks and Shares ISA appeared first on The Motley Fool UK.
Passive income stocks: our picks
Do you like the idea of dividend income?
The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?
If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…
Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.
What’s more, today we’re giving away one of these stock picks, absolutely free!
Get your free passive income stock pick
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#FFFFFF”, ‘color’, ‘#FFFFFF’);
})()
More reading
I think Warren Buffett might love this FTSE 250 stock
Safestore shares are up 60% in 5 years. I’m still bullish after today’s results!
Is it time for me to buy more of this undervalued 7%-yielding FTSE gem?
Legal & General: defensive, steady shares with long-term dividend growth
This well-known TV stock has a 9% dividend forecast
Harvey Jones has positions in Glencore Plc, Legal & General Group Plc, and Taylor Wimpey Plc. The Motley Fool UK has recommended Ocado Group Plc. 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.
