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Yahoo
08-08-2025
- Business
- Yahoo
How I'm positioning my Stocks and Shares ISA for the next market crash
As things stand, 2025 looks like being another good year for markets. But as night follows day, we can be sure this purple patch will run out of steam at some point. That's why I've been doing three things to position my Stocks and Shares ISA in advance. A bit of (summer) spring cleaning The first thing I've been doing is reviewing my portfolio and checking that I'm still content with the stocks I own. Notice that I said 'content' rather than 'happy'. As a general rule, we focus on the long term here at Fool UK. Put another way, we tend to err on the side of sticking with investments if the outlook isn't too ghastly. This is because it's value rather than emotions that ultimately drive returns. Sure, this will always be a judgement call to some extent. No one truly knows where the price of any stock is going. If there's been a fundamental shift in a company's investment case however, I might be inclined to sell. Things could go from bad to worse if general market sentiment tumbles. Buying without fail A second thing I've been doing is continuing to buy shares in an exchange-traded fund (ETF) that forms the core of my ISA. In complete contrast to the stock-picking part of my portfolio, this happens every month without fail. There are two reasons for this. First, owning this fund means that my money is instantly spread around more companies than anyone could ever realistically own directly. This 'safety in numbers' strategy should mean I don't need to worry (too much) when the market hits a sticky patch. Second, despite all the corrections and crashes we've witnessed over the years, the market hasn't yet failed to recover. History can never be a perfect guide to the future, of course. But anyone betting against the resilience of the human race and its capacity to innovate hasn't done well so far. I'd still take the other side of that bet. My favourite fund The specific fund I own in my ISA is the SPDR MSCI World ETF (SWRD.L). As it sounds, this invests in a huge number of stocks from around the planet. Around 71%'s invested in the US, where the tech titans dominate. Why this fund over alternatives? Well, one key reason is that the annual charge is just 0.12%. That's very low. And as any experienced Fool will tell you, costs really matter when it comes to growing wealth over decades (which is how long I'm investing for). This isn't to say that the value of my holding won't dip when we next think we're going to hell in a handcart, possibly due to the consequences of Donald Trump's tariff tantrum. This particular ETF only invests in developed countries too. So I'd need to find another investment if I wanted exposure to (riskier) emerging economies. Looking for bargains A final thing I'm doing is preparing a wishlist of stocks to buy. For me, these will always be companies boasting solid fundamentals, market-leading positions and sound finances. Understandably, businesses like this rarely go on sale. But a market crash may provide such an opportunity, especially when other investors are panicking and chucking innumerable babies out with the bath water. The post How I'm positioning my Stocks and Shares ISA for the next market crash appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Paul Summers owns shares in SPDR MSCI World UCITS ETF. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-06-2025
- Business
- Yahoo
This bank trades at 7.3 times earnings and has a 5.6% dividend yield… I'm interested
Arbuthnot Banking Group (LSE:ARBB) could be appealing to investors seeking a combination of value and income. It addition to its sizeable yield, it's trading at earnings multiples that are slightly below its blue-chip peers. What's more, it might not be getting the attention it deserves. It hasn't been covered on Fool UK for six years… maybe it's simply overlooked. The group's valuation metrics suggest it is trading at a discount relative to its earnings and book value, which may appeal to value-oriented investors. Specifically, the forecasted price-to-earnings (P/E) ratio is 7.3 times for 2025, improving to 6.2 times in 2026. These relatively low multiples indicate that the market may be underestimating the bank's earning potential in the near term. The bank's price-to-book ratio was just 0.53 in 2024. Once again, this suggests it's simply undervalued. This tells us that shares are trading well below the group's net asset value. Coupled with this, Arbuthnot is expected to pay dividends of 53p per share in 2025 and 57p in 2026. This translates to attractive dividend yields of approximately 5.6% and 6%, respectively, based on the current share price of £9.48. Earnings per share (EPS) projections show a slight dip in 2025 to 129.6p, followed by a rebound to 152.2p in 2026, reflecting a return to profit growth after a modest slowdown. Net income is forecast to increase from £21.3m to £25.1m over this period. This valuation discount offers a margin of safety, which could protect investors against downside risk while providing potential for re-rating if the company's profitability improves. Arbuthnot has been actively investing in its infrastructure and technology, positioning itself for future growth. Recent expansions include moving to larger London premises and bolstering its specialist lending and wealth management divisions. Management has also taken steps to mitigate interest rate risk by shifting towards fixed-rate lending and investing in high-quality securities. This strategy is designed to protect the bank's margins in a potentially falling interest rate environment, as liabilities tend to reprice faster than assets. Despite these positives, there are risks investors should consider. The bank's earnings remain sensitive to interest rate fluctuations. Although management has taken measures to reduce this risk, unexpected changes in rates could still impact profitability. Credit risk is another concern. While the loan portfolio is well-secured, a worsening economic environment could increase defaults, especially among clients flagged as watchlist risks. The metrics look good and I'm fairly confident about the state of British banking at this time. The economy is growing slowly and interest rates have been falling at a steady pace, allowing for a gentle unwinding of strategic hedges. I'm also interested by the consensus price target which sits 62% above the current share price. While I'm not going to buy straightaway, I'm going to add this one to my watchlist and continue to look at the data. The post This bank trades at 7.3 times earnings and has a 5.6% dividend yield… I'm interested appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool James Fox has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
