Safe for growth, they are not going anywhere when they are becoming the quintessential place for “high street” brand clothes and bricks & mortar shops are shutting down because of them.
If you think that’s going to crush a company you should look into the history of Amazon, and they are involved in a scandal almost daily.
Yeah, BooHoo have been around a while.
Anyway, a ‘safe’ pick to contribute to the topic. I’m not sure, but possibly one of the safest is Legal and General?
They’re fairly cheap, pay out a decent dividend and don’t look to be going anywhere. They’re also fairly forward thinking - their share topic has some discussion about their methods etc. Might be worth checking out.
But I don’t think there’s anything genuinely ‘safe’ though.
I think it is unlikely that you’ll get everything that you’re looking for, as it sounds like an ideal investment. There tends to be a direct relationship between risk and reward.
The notion of “low risk” is interesting as it could mean various things: low price volatility, sound balance sheet, great competitive advantages etc.
As noted by a few above 10% - 20% growth per year is pretty good going, and usually found with smaller companies growing fast. Those same companies are probably not the low risk companies that you’re looking for, as the share prices tend to be more volatile and the businesses are potentially more fragile.
Utility companies will have lower volatility, National Grid won’t go bust and have a monopolistic position on pipes and wires for energy distribution. They are also heavily regulated and it’s unlikely you’ll see much capital growth.
Defensive consumer goods companies tend to be lower volatility, particularly those with well known brands, good market share and pricing power. They tend to be less affected by macro economic conditions as they sell their products regardless. In the UK I would include the likes of Unilever and Diageo. I think it’s unlikely these will grow at the rate that you’re looking for.
Games workshop, and Rightmove have great competitive advantages and have grown rapidly, is there still scope for continued growth?
As others have noted, your best bet is probably with a collection of businesses through investment trusts or funds.
@Amina GBP / USD currency loss is a consideration. With the relative difference in vaccine rollout, Covid recovery and the Federal spending programmes of the Biden administration, it looks likely GBP will continue to trend higher against USD for some time.
I like the renewable energy yieldcos like Greencoat wind or bluefield solar. Designed to be super stable dividend machines with their revenues backed by long term government funding. The idea is the share price stays flatish and the dividend yields 5-6% per year, increasing with inflation. Have been resilient to a lot of the volatility seen in last 12 months.
I’ve been going through a similar thought process. My punts in the UK are banking, energy and M&S but all for the long term (5 years.) M&S has dire fashion but that’s priced in. My bet is on its food business, it has a good brand in food, and the middle classes are ready to spend on food to alleviate boredom!
Otherwise someone else put it well already- a range of global ETFs and wait out the wall of red that currently confronts me when I check my portfolio!
I would look at Clean Energy. Seems like we are destine to grow out in renewables with large oil companies looking to exit into renewables and their not being enough assets. Still a risk who you pick.
Hey Hewitt,
Not that anyone here is really qualified in answering your question, it might help to have a better understanding of your position. I noted further down that this is stock ideas for SIPP. It would be good to know roughly how long term we’re considering, 30+ years? 15 years?
If a stock is down with the currently, I would suggest it is higher risk. Lower risk stocks by definition would be those that a pandemic has little effect on.
No one knows exactly what is going to happen once restrictions are lifted globally. There’s been huge damage economically and stock prices over the last year may have made the situation worse for coming out the other side.
A budget leisure airline is not low risk. A company which relies heavily on people being in jobs, having cash to spend. And what about their aircraft, Does a budget airline run the latest efficient models? I’d place any airline in medium risk and would look to companies with global operations to reduce risk.
No small number of stock picks creates a low risk portfolio. Remember that by limiting your stocks to UK you’re automatically at high risk.
In my view, managing single stocks in a SIPP, which is typically going to be a long or super long investment period, is silly. I’d rather place the money in a well diversified ETF and check in on it every 5-10 years.
If you REALLY want to pick your own (and after putting most of the portfolio in an EFT) - You might be better positioned in companies of the distant future.