Stocks And Shares Are The Best Investments This Year To Build Serious Wealth

Stocks and Shares ISAs now allow for a contribution limit of £20,000, but most adults don't know about it and are making an expensive mistake by not taking advantage of the offer.

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It is not unusual for even the most enthusiastic investors to take a leisurely approach to their new ISA allowance as long as they know that they have a full year before they need to use it up. Others may be running out of ammunition as they have already reached their maximum allowance for last year.

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Yet, there is no time to waste. Our new figures show that so-called early-bird ISA investors typically make more money than those who wait until the last minute to invest in a Stocks and Shares ISA. Washington is the absolute best time of year to start investing in a Stocks and Shares ISA.

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Don't let time pass you by!

A study by AJ Bell has found that those who invest in ISAs on the first day of the tax year for the past decade, and have never missed a tax year, would have an extra £9,271 compared to those who wait until the last minute to invest.

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A total of £72,000 would have been contributed by each of them, but the early bird investor would have £200,373, whereas last-minute deadline dodgers would have £191,102, which was the amount they contributed.

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There is a £9,271 difference between the two figures because of timing, and it is quite dramatic. It is purely the result of the investments in global equity funds you both purchased.

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According to Brian Byrnes, head of personal finance at Moneybox, the money you put into your retirement accounts will grow tax-free right from the very start of the new tax year. By contributing early, you will start receiving tax benefits right away. According to him, compound interest can help you achieve your financial goals faster, allowing you to benefit sooner from it.

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Byrnes continues, “Even those who do not have a lump sum of money to put away for the annual tax return can still benefit by drip-feeding small amounts regularly beginning with the start of the new tax year. This also alleviates the pressure and stress that can be felt during the last minute rush as the end of each tax year approaches.”

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It's not worth my time to waste it

It is my belief that I will invest as much as possible in Stocks and Shares ISAs even though I do not have enough cash to do so in one go, but I'm determined to do so regardless. It is not just for the reasons outlined above that I believe there are many exciting opportunities out there at the moment, especially among dividend stocks among the FTSE 100.

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I am looking at a number of stocks at the moment, but Barclays is a top choice because of its low valuation at five times earnings as well as the potential for long-term value gains from its dividends. I am also tempted by Unilever for its combination of dividend income and long-term share price growth.

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I'm flipping the coin between targeting insurance companies Aviva and Legal & General Group, both of which are cheap and yield more than 7%, and both of which could make for good entry points for a long-term investor like myself. Shares in BT Group and British Land have taken a beating but they are now really cheap and could prove to be an excellent entry point for a long-term investor like myself.

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The current market looks to be a great time to buy shares, but it is impossible to make a definitive statement about this. Even if the markets crash in the summer, early bird investors will still be at a disadvantage in the long run if they get in early. In addition, I will earn dividends more quickly if I invest sooner.

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