September might be the end of summer, but there are still four full months of action before we say goodbye to 2023. In this time, there are lots of events that will impact the stock market, including Bank of England meetings, company earnings and much more. So if I was starting out on my investing journey now with £5k, here are the FTSE 100 and FTSE 250 stocks that I’d include to get going.
Bank on dividend stalwarts
I’d take half the money (£2.5k) and split it between five income shares evenly. These would be Aviva (8.43%), Glencore (7.23%), British Land (7.17%), NatWest Group (6.63%) and Keller Group (5.07%).
The mix of stocks provides good diversification across various different sectors. This ranges from traditional banking to property and commodities. As a result, I feel that this portfolio will be able to provide good income in years to come, without too much risk of dividends being cut. If one area struggles, other sectors should be able to pick up the slack.
Another reason why I’ve picked these five is that all the yields are above the respective index average. After all, I’m trying to enhance my portfolio return rather than simply buying a tracker index. The risk is that these yields can change over time. Cuts can reduce my income levels, and this is something that just needs to be accepted.
Including some growth names
I’d then invest £2k evenly between three growth stocks. My favourite picks at the moment would be Marks & Spencer, Games Workshop and 4imprint Group.
Of particular interest for coming months will be Marks & Spencer, given its promotion to the FTSE 100. The retail group has really struggled in recent years, but the restructure seems to be finally bearing fruit. The latest financial results were very impressive.
My aim in including these stocks is to try and generate some large share price returns over the coming years. My dividend stocks act as my lower-risk, stable options. The growth element is higher-risk, but is what’s really going to potentially move the needle.
The risk here is that one or more of my picks underperform and lose momentum. This could weigh heavily on the rest of the portfolio.
The wild card
Finally, I’d use £500 for a wild card pick. This is for a company that might not directly fit into the category of being either for income or growth, but is one I think could do really well.
My pick right now would be Capita. I wrote about the stock in more detail in August, when I noted that it was trading at 27-year lows. Even though it has had (and still does have) problems, the low price-to-earnings ratio (sub 4) and H1 results makes me think that it could be undervalued.
From that angle, it’s a pick that I’d include in my beginner portfolio. When I include this along with the other ideas, I feel my portfolio could perform very well with whatever 2023 has left, and into the future.
