My Stocks and Shares ISA is a great tax-efficient way for me to invest. Incredibly, we’re halfway through November, which means that I start turning some of my focus to next year. Based on the potential events and uncertainty in the year ahead, here are some ways I’m trying to protect my portfolio before year end.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
Looking at potential winners
I own some Bitcoin and other crypto coins. These have done well this year, especially in the short term as the US election results have pushed them even higher. Given the progress made on launching Bitcoin ETFs this year, it’s now easier for me to look to hold these funds in my ISA. Of course, there are also stock options such as Coinbase, which is a crypto market exchange.
With ETFs becoming more popular and easy to access, I’m looking at getting some more crypto exposure (which I can hold for the long term) to help potentially future-proof my ISA (although I have to accept that future-proofing isn’t guaranteed).
It’s important to note that crypto is a very risky asset class and I need to be comfortable with the risks before investing.
The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of investment advice. Bitcoin and other cryptocurrencies are highly speculative and volatile assets, which carry several risks, including the total loss of any monies invested. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
Building up income ideas
Another way I’m trying to help my ISA is via buying more dividend shares. The Bank of England committee cut interest rates again last week. I think more rate cuts are coming in 2025. In fact, I think that by this time next year, the base rate could be at 4% or even slightly lower. The average FTSE 100 dividend yield is currently 3.67%. Yet there are plenty of good options in the 6%-8% bucket.
A good example of a stock I like right now is Land Securities Group (LSE:LAND). It’s the largest commercial development and property investment firm in the UK. The share price is down a modest 1% in the past year, with a current dividend yield of 6.71%.
Not only can I look to try and lock in this yield now (assuming future dividends stay the same), but I should be able to benefit as interest rates fall. This is because lower rates make it cheaper for the business to finance new property purchases. This should help to reduce anticipated costs for next year.
Of course, cheaper financing can be seen as a risk as other property companies could offer stiffer competition on sites that Landsec management wants to buy. Yet with a portfolio worth £8.7bn and a track record of 40 years in the FTSE 100, I think the firm can hold its own.
Planning finances
Finally, I’m looking at my personal cash flow. The ISA year runs from April to April. I have a £20k cap on how much I can invest within this period. Although I’m nowhere near this limit right now, I want to try and plan to see what I expect to invest over the next six months.
After all, I don’t want to be in a position where I see a great opportunity and either don’t have any spare money or have somehow breached the £20k limit!
