January marks a time for resolutions, and here at The Motley Fool we believe that once you’ve got your debt under control and built a robust emergency fund, one of the next best things you can do for your financial future is to begin investing in quality FTSE companies!
City of London Investment Trust
What it does: City of London Investment Trust spreads shareholders’ money across a wide range of top quality UK stocks
By Alan Oscroft. Some newcomers want the quickest gains they can get. But that can bring risk. And few things can put an investor off shares quicker than early losses.
I’d always start with an investment trust. And I chose City of London Investment Trust (LSE:CTY).
I want diversification. But it can take a long time to build it up with one individual stock at a time.
But, with City of London, I bagged some Shell, some BAE Systems, some HSBC Holdings… and a whole load more Footsie stocks in one go. Instant diversification.
I’m also tucking away dividend yields of around 5% per year, which I can use to buy more shares to hold for the long term.
The dividend has risen for 56 years in a row too. If it should fail one year, the share price could suffer, and I rate that the biggest risk. But on balance, I see safety first here.
Alan Oscroft owns shares in City of London Investment Trust. Alan Oscroft has no direct position in Shell, BAE or HSBC.
Tesco
What it does: Tesco was founded in 1919 and floated on the stock exchange in 1947. It is the UK’s largest supermarket chain.
By Charlie Keough. Dipping your toe into the stock market as a beginner can seem daunting. But if I were starting today, I’d turn my attention to the FTSE 100 and more specifically, Tesco (LSE:TSCO).
What I most like about Tesco is that it relates to a key investment principle of my favourite investor Warren Buffett. He says we should invest in companies that we know and understand. I was never top of my class in science at school, so if I were to research biotechnology stocks, for example, I may not fare very well in selecting the right companies. However, with Tesco, it’s clear to see how it generates revenue.
The business has the largest market share in the supermarket industry. It also has plans to continue expanding both its physical presence via new store openings as well as its online business.
What’s more, I could also make some extra income by owning Tesco shares. That’s because it gives back a slice of profits to shareholders via a dividend yield.
It won’t all be plain sailing for Tesco. A rise in competition from cheaper alternatives such as Aldi will place pressure on the firm. However, I think the stock could be a smart buy today for investors to consider buying and holding for years to come.
Of course, a major key to success is diversification. If I were starting out, I’d make Tesco just one stock of a variety that I added to my portfolio.
Charlie Keough does not own shares in Tesco.
Vanguard FTSE All-World UCITS ETF
What it does: The Vanguard FTSE All-World ETF tracks the return of over 3,600 stocks from developed and emerging countries worldwide
By Paul Summers. As much as it can be tempting to dive straight in and buy single-company stocks, this strategy involves a level of risk that investing newbies might live to regret. What happens if the company turns out to be an absolute dog? That could lead to someone leaving the market and vowing never to return.
For this reason, I’d do exactly what I did all those years ago: I’d buy an exchange-traded fund that tracks an index (or a big basket of stocks).
If starting from scratch today, it would be the low-cost Vanguard FTSE All-World ETF (LSE:VWRP).
One huge benefit to this more ‘gentle’ approach is that, with one mouse click, my money would be spread across thousands of companies around the globe. Put another way, I’d be instantly diversified.
Yes, this sort of core holding will still go down in value if stock markets tumble. But the point is that I wouldn’t be losing sleep like I might if I’d risked all my hard-earned cash on the performance of one business.
There’ll be plenty of time for trying to beat the market with individual stocks once I’m more comfortable with how investing works.
Paul Summers has no position in Vanguard FTSE All-World ETF.
The post 3 top FTSE shares for beginner investors to consider buying in 2024 appeared first on The Motley Fool UK.
Like buying £1 for 51p
This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!
Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.
What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?
See the full investment case
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HSBC Holdings is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool UK has recommended BAE Systems, HSBC Holdings, and Tesco 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.
