Next year is only a week away, so I am already planning my Stocks and Shares ISA investments for 2022.
Indeed, I want to start planning my ISA investments as soon as possible. Research shows that investors who make the most of their allowance as soon as possible after the 5 April deadline tend to earn better returns. Generally speaking, the longer money is invested for, the higher the returns.
That is why I am seeking out stocks that could be the best additions to my portfolio next year. I am focusing on both growth and income stocks to make the most of the tax advantages offered by a Stocks and Shares ISA.
Any income or capital gains earned on investments held within one of these wrappers is not liable for tax.
Income stocks to buy
In terms of income stocks, I would buy Admiral and GlaxoSmithKline for my portfolio in 2022.
I think both of these companies are well-positioned to profit in any economic environment that prevails over the next 12 to 24 months and beyond. Glaxo is one of the country’s largest pharmaceutical corporations, and Admiral is one of the country’s largest car insurance businesses.
Both of these markets are relatively defensive. Car insurance is a legal requirement, suggesting there will always be a market for this product. Meanwhile, there will always be a demand for drugs and health care services.
At the time of writing, these stocks support dividend yields of between 5% and 7%, respectively. Some risks the companies may face going forward include regulatory headwinds in the case of Admiral and competition for GlaxoSmithKline. Either of these challenges could impact growth and overall profits, reducing the cash available for distribution to investors via dividends.
Stocks and Shares ISA growth investments
When it comes to growth investments, I will buy technology companies.
In my opinion, two of the best technology businesses on the market are Rightmove and AutoTrader.
I like these companies because they both own some of the most high-profile websites in the UK. Rightmove has become virtually synonymous with the property market, while AutoTrader is usually the first port of call for consumers looking for new and used vehicles.
These are substantial competitive advantages. I think they will underpin these companies’ growth plans for the foreseeable future. And as the world becomes more and more connected, their influence in their respective markets is likely to continue to increase.
That being said, the tech sector is incredibly competitive. These corporations are leaders in their fields today, but they do have challengers. There is no guarantee they will be able to maintain their positions in the market indefinitely.
Nevertheless, I think these companies have all the hallmarks of the sort of growth investments I am looking to buy for my Stocks and Shares ISA in 2022.
Rupert Hargreaves owns shares of Admiral Group. The Motley Fool UK has recommended Admiral Group, Auto Trader, GlaxoSmithKline, and Rightmove. 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.
