[ad_1] Image source: Getty Images There are lots of different strategies you can follow when it comes to a Stocks and Shares ISA. But there are a few rules that apply to everyone at every age and stage. One of these is to think carefully about diversification – a key strategy for limiting risk. In general, it’s a good thing to aim for, but exactly what that means might vary from one person to another. What’s the point of diversification? The aim of diversification’s pretty straightforward. The idea is to limit the negative effect of any potential threat on the…
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[ad_1] Image source: Getty Images Ever thought about turning a Stocks and Shares ISA into a long-term passive income machine? It’s possible. Warren Buffett has said that getting rich involves figuring out how to earn money in your sleep. Stuffing an ISA with a range of high-quality dividend shares can do exactly that. A pound an hour, for life For example, say you want to earn an average of one pound per hour for the rest of your life. As there are 8,760 hours in a year, that works out at £8,760 per year in dividends. At the moment, the…
[ad_1] Image source: Getty Images If you follow Rolls-Royce (LSE:RR) shares closely, you’ll know they’re pretty expensive. I don’t mean they’re expensive because they’re £12.50 each rather than the 70p they were three years ago. I mean they’re expensive on conventional valuation metrics. Valuation metrics are the most important method of understanding whether a stock is a good investment or not. I don’t think it should be based on some notion or principle like “I think migration will drive housing prices up and therefore house builders are a good shout”. One of the core metrics is the price-to-earnings (P/E) ratio.…
[ad_1] I recently heard a social media finfluencer suggest that Diageo (LSE:DGE) shares had reached a washout bottom. This term typically suggests that the stock may have bottomed out as the general downtrend of the shares caused low conviction shareholders to sell their positions too. At a glance, a forward price-to-earnings (P/E) multiple of 13.4 times looks cheap for a consumer defensive giant of Diageo’s caliber. Investors accustomed to seeing this stock trade in the mid-20s over the last decade might be tempted to call a bottom. However, I believe these figures are a classic example of how headline multiples…
[ad_1] Image source: Getty Images While there are lots of ways of earning passive income, most take a lot of cash or some specialist skills to get off the ground. Investing in the stock market, however, requires none of these. There are some things to be careful of and rules investors — especially beginners — should try to stick to. But shares in companies that distribute part of their profits as dividends can be a great source of passive income. Time Whether it’s building wealth or earning passive income, one of the most important rules for investing is to be…
[ad_1] Image source: Getty Images Earlier this week, I sold my entire stake in FTSE 250 retailer WH Smith (LSE:SMWH). The stock jumped 11% on Monday (19 January) but I took that as my cue to head for the exit. A new leader might be about to set the company on a more promising path. But my investment thesis has fundamentally changed and I now think there are better opportunities elsewhere at the moment. What went wrong? I bought WH Smith shares because I thought they were cheaper than they looked. Specifically, I had the view that the stock market…
[ad_1] Image source: Getty Images In my experience, some of the best stocks to buy are often among those that have suffered some major losses. Why? Because while rapid selling is typically caused by genuine problems, investors can often overreact. And every once in a while, this type of volatility can create some superb bargains for long-term investors. Perhaps a perfect example of this is Rolls-Royce. After being one of the worst-performing stocks in the FTSE 100, it quickly turned into the best performer. And over the course of three years, smart long-term investors who saw the hidden potential have…
[ad_1] Image source: Getty Images With UK stocks having surged ahead in 2025, the dividend yield offered by most index funds is pretty lacklustre in 2026. As of January, the FTSE 100’s yield stands at a modest 2.9%. And the FTSE 250 isn’t much better at 3.3%. Considering the average payout has historically been closer to 4%, it shows that dividends aren’t growing as quickly as share prices. But luckily, there are quite a few exceptions. Across the entire London Stock Exchange, there are 131 companies offering 6% or more. And when looking exclusively at the largest 350 businesses, there…
[ad_1] Image source: Getty Images Many individuals in the UK undoubtedly have the goal of becoming wealthier, securing an earlier retirement, and unlocking a passive income that beats the State Pension. But few often realise just how simple it might be to turn this dream into a reality. All it might take is three simple steps that anyone can start right now. Prepare, save, invest In 2026, the stock market continues to be the best way for ordinary people to build long-term wealth. But before someone can begin their wealth-building journey, some preparation’s needed. The stock market can and will…
[ad_1] Image source: Getty Images It might seem strange but I reckon a good place to start when looking for stocks to buy is at the bottom of the performance league tables. With most attention paid to the top performers, it can take a while for investors to notice some of the hidden gems at the other end of the table. However, by getting in early, it’s sometimes possible to bag yourself a bit of a bargain. Over the past 12 months, Playtech (LSE:PTEC) and the London Stock Exchange Group (LSE:LSEG) have seen their share prices fall 63% and 27%…