Starting a new Stocks and Shares ISA in 2024, I’d go for a diversified selection of good quality stocks.
I’ve seen newcomers get excited and go for the hot stocks that everyone is talking about. But if the latest sure-fire winner crashes, they can be put off the stock market for life.
But I’m not a newcomer, and I’m already diversified and feel happy about my safety.
Raining gold
And that draws me to one of my top quotes from ace investor Warren Buffett…
Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons.
2016 letter to shareholders
I see lots of gold in UK stocks in 2024. So I want to pile as much cash as I can into the small few that I think could be the best value right now.
Cheap bank
I’ve looked at NatWest Group (LSE: NWG) before, and I make no apologies for coming back to it.
I have Lloyds Banking Group shares in my ISA. So, if I were just starting, it could be too risky to buy more banks. I’d go for a different sector instead.
As it is, I’d still face risk adding NatWest to the pile. That goes for all banks this year, as we just don’t know how much pain the economy will have caused them yet.
The government also still has a big stake in NatWest. And that could hurt the share price if and when it wants to sell.
But with a 7.4% forward dividend yield and solid earnings forecasts, NatWest heads my ISA wanted list.
Go for growth
I also have more Scottish Mortgage Investment Trust (LSE: SMT) shares in my sights.
The discount to net asset value has fallen to around 11%, after the share price has regained some lost ground. It’s been closer to 20% in the past.
That might echo improving sentiment towards the Nasdaq stocks it buys. And over the past 12 months, the US growth index has outstripped the Scottish Mortgage price.
The main danger is that US markets could be a bit overheated now. And Nasdaq stocks are back close to their peak of 2021, so that risk looks like a real one.
But with the trust still lagging the index by so much, I think I might just take it.
A bit volatile?
I’ve watched ITV shares for a while, and they’ve been a bit volatile.
I guess thats not surprising, as ITV’s profits are so closely tied to advertising spending. And when people have less money in their pockets, it might not be worth trying too hard to sell them stuff.
But right now, we’re looking at a whopping 8.4% forward dividend. And a super low price-to-earnings (P/E) ratio of just five. I think this might be another risk worth taking.
Finance focus
I might well buy all three of these this year, if the prices are still low enough each time I have some investment cash ready.
But, on balance, my 2024 ISA buys will probably be weighted to finance stocks. I just see them as the best FTSE 100 value today. But I do think investors should work on diversification first.
