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Four in five female investors confident of achieving retirement income goal

on February 25, 2022

Image source: Getty Images

When it comes to retirement savings and income, women are often at a disadvantage. According to one study, for example, women need to save close to £200,000 more during their working lives to enjoy the same retirement income as men. This big pension gap is due to several factors, including a savings shortfall among women, a need to fund a longer retirement (as women live longer than men) and higher care costs.

Despite these disadvantages, it seems today’s women are taking steps that they’re confident will help them ‘future-proof’ their retirement. More specifically, more women are delving into investing, with the majority believing that it will help them achieve their desired retirement income. Here’s the lowdown.

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Women and investing for retirement: what does the research show?

According to Dr Hedva Ber, global COO and deputy CEO of eToro, women have discovered the power of investing and are using it “as a powerful lever to secure their futures, boost income and/or to build net wealth”.

In fact, research by eToro shows that nearly four in every five female investors (78%) are confident of reaching their desired income in retirement if they persist with their current investment strategy.

Three fifths (59%) of these women expect to reach this goal in under 10 years. The rest (41%) believe it will take more than a decade.

The hugely positive outlook on investing as a sufficient tool for securing their retirement comes despite the fact that half (50%) of the women who were involved in the research actually only started investing in the last two years.

What are women investing in?

The research by eToro shows that some of the most popular investments currently held by female investors are:

  • UK domestic stocks (40%)
  • Crypto assets (32%)
  • Domestic bonds (32%)
  • Cash (31%)
  • Foreign stocks (23%)
  • Alternative investments (19%)
  • Commodities (13%)
  • Foreign bonds (12%)
  • Currencies (11%)

And as for which investments women are planning to invest in for the future, these are the findings:

  • Crypto assets (34%)
  • Domestic stocks (31%)
  • Alternative investments (29%)
  • Domestic bonds (26%)
  • Foreign stocks (22%)
  • Cash (22%)
  • Commodities (19%)
  • Foreign bonds (15%)
  • Currencies (14%)

What can be done to encourage more women to invest?

Despite an increase in the number of female investors in recent years, they are still vastly outnumbered by their male counterparts. The UK, for example, has the eighth-lowest proportion of female investors in the world (only 21%), according to BrokerChooser.

Dr Ber has called for more female role models to encourage even more women to invest.

She said: “Women clearly want to improve their finances and crave more education around investing. We need to respond to the calls for more female role models and ensure they represent the diversity of women who could benefit from knowing more about investing.”

Dr Ber has also called for more financial education to build on the progress that has already been made by women on the investing front.

What could prevent women from achieving their goals?

No matter your level of confidence or gender, it always pays to take a cautious approach when it comes to investing. 

After all, investing is inherently risky. There is always the risk that your portfolio will underperform or lose money. And some assets (such as crypto) pose a bigger risk than others.

Luckily, there are ways to minimize the risk of underperformance or loss when it comes to investing. One of the top recommendations by financial analysts and experts, for example, is to practise diversification. This simply means having different types of investments in your portfolio, such as stocks and shares, commodities, crypto assets and bonds.

When you have a well-diversified portfolio, any losses in one category are likely to be offset by gains in another, making it less likely that you will lose money overall.

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About the author

Avatar for Sean LaPointe

Sean LaPointe

Sean is a personal finance writer with a strong passion for helping others become more financially literate and make better financial decisions. He covers everything from credit cards to savings to investing.


Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.

1 FTSE 100 stock to buy and hold for 10 years

on February 25, 2022

The FTSE 100 index is studded with great stocks to buy and hold for the next decade. In fact I have bought a number of them for my own portfolio. But even among these, some stocks look more promising for me than others. Typically, this is because of the structural changes in their favour. One example is online property marketplace Rightmove (LSE: RMV).

Strong structural story

The company provides a convenient place for both buyers and sellers or tenants and property owners to find each other. I have referred to it more than once when moving houses, and it has been a positive experience for me as a consumer. That ticks one box for me. But there is of course much more to the stock. Importantly, the world has become far more comfortable with buying and selling online than it was before the pandemic. The e-commerce industry is only expected to continue growing over the course of the decade. This should impact all kinds of online shopping platforms positively, including Rightmove. 

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Rightmove posts good results

But there is even more to the stock. And that is its strong financials. The company just released its full-year 2021 results earlier today, which are quite good. Its revenue is up by 48% from 2020 and its earnings per share (EPS) are up by 69%. This level of increase is probably an outlier though. Rightmove mentions that during April and October 2020, “exceptional Covid customer discounts” were provided. Even then, the company has grown since 2019, the last pre-pandemic period. Its revenues are up 5% and EPS has increased by 9%. 

Slowing property markets could impact the FTSE 100 stock

During 2022, there could be a few speed bumps for the FTSE 100 stock. The number of transactions is expected to revert to pre-pandemic levels, which I expect could impact its revenue growth. The last couple of years have been good for the housing markets because of government relief provided to keep the economy buoyed during the pandemic. However, much of this support has now been withdrawn as the macroeconomic environment normalises. Also, it is a relatively expensive stock. It has a price-to-earnings (P/E) of around 31 times after its latest results according to my calculations. This is almost double that for the FTSE 100 index as a whole.

What I’d do now

Yet, Rightmove looks like a really good stock to me for the long term. In fact, even the downside to the stock is not a big deal to me. Economic recovery is underway, which I think could still be positive for the property markets, even though there could be some correction in the short term after the boom seen in the past couple of years. As far as its valuations go, I think for a stock backed by a strong structural story, valuations may well remain high. It is rare that a healthy FTSE 100 stock with growth potential ever trades at low levels. If I had not bought Rightmove shares already, I would buy them now and hold them for 10 years. 

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And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

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Manika Premsingh owns Rightmove. The Motley Fool UK has recommended 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.

4 defensive stocks I’m thinking of buying to protect against market uncertainty

on February 25, 2022

I think it’s fair to say that there’s a lot of uncertainty in the market at the moment. In contrast to much of the past two years, this isn’t being primarily driven by the Covid-19 pandemic. Rather, rising tensions in Eastern Europe are providing investors like me with a lot to ponder. With this in mind, here are some defensive stocks that I’m thinking of buying to help protect me during the coming months.

Investigating defensive stocks

Defensive stocks refers to companies that typically outperform growth stocks during recessions, periods of uncertainty, and times of concern. It’s not necessarily the case that defensive stocks will shoot higher during a recession. However, when compared to the rest of the FTSE 100 index or a specific sector, these type of stocks should perform better.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

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The main characteristic that makes this the case is the inelasticity of demand. This economic term refers to the fact that consumer demand for the products or services offered doesn’t really change based on different factors. For example, even if the price of a pint goes up by 10p, my demand won’t be altered in buying a beer. Or even if the economy is performing badly, my demand will be unchanged on buying bread from the supermarket.

This attribute also helps during times of market uncertainty. Investors can be confident that despite much of what’s going on, revenues should remain high. I feel this applies for utility companies, supermarkets, and some financial services companies.

Stocks that I like now

To this end, there are several good examples that I’m thinking of buying now. Firstly, I’d consider adding consumer goods providers such as Unilever and Reckitt. These companies own well-known brands in a variety of sectors, including Dettol, Strepsils, and Lipton. 

Both share prices are up over the past year, 14% for Unilever and almost 5% for Reckitt. As for a risk, supply chain disruptions is a negative here, given the fact that these goods need to be manufactured and shipped around the world.

I’d also include some insurance companies such as Legal & General and Aviva. Services such as home and car insurance, along with pension provision and investment management, are constant needs for most of us. I therefore think both companies can offer me gains if things remain uncertain this year. Aviva shares are up 9% and Legal & General is down a modest 3% over the past year.

Another benefit of these defensive stocks is the dividends on offer. Both stocks have a yield in excess of 5%, which can provide me with good income. This is helpful especially during tough times in the market. 

As a risk, market volatility could be a negative for the pensions funds managed, given that these proceeds are likely invested in the stock market.

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And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

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Jon Smith has no position in any firm mentioned. The Motley Fool UK has recommended Reckitt plc and Unilever. 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.

Here’s why I’m watching this FTSE 100 stock, down 40% yesterday

on February 25, 2022

Key points

  • Gold output increased 24% for the three months to 31 December 2021, year-on-year
  • The company has a lower forward P/E ratio than a major competitor
  • It is investing $471m in a new mining project

With the developing situation in Ukraine and Russia, the share prices of many companies operating in the region plummeted yesterday. Polymetal International (LSE: POLY), a FTSE 100 gold miner, fell 40%. With mines across Russia and Kazakhstan, investors became nervous that production would grind to a halt or Western sanctions would target the company. I am trying to look beyond this issue to assess the firm’s performance over a longer period, although I’m not ignoring the severity of the conflict. This is with a view to holding the shares for the long term. Let’s take a closer look.  

A FTSE 100 business with a strong track record

In a recent trading update for the three months to 31 December 2021, Polymetal stated that gold production was up 2% year-on-year. Indeed, this was 5% above guidance. Furthermore, gold output increased 24% in comparison with the same period in 2020. On the other hand, revenue declined by 6% year-on-year. The firm explained that this was largely due to lower gold prices during the period. I expect this to change in the next quarter, given the rise in the gold price recently. 

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

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The business also has a strong earnings record. Between the calendar years 2016 and 2020, earnings per share (EPS) grew from ¢90 to ¢228. By my calculations, this amounts to a compounding annual EPS growth rate of 20.4%. As a potential investor, I find this both impressive and consistent. 

A cheap stock at current levels?

By taking a look at the company’s price-to-earnings (P/E) ratio, I may better understand the extent to which it is under- or overvalued. Indeed, Polymetal has a forward P/E ratio, based on forecast earnings, of 9.73. On its own, this doesn’t tell me much. Compared to Barrick Gold, a major competitor, it does seem cheap. Barrick Gold has a forward P/E ratio of 23.04. For me, this is an indicator that Polymetal may indeed be undervalued at its current price.

Of course, I can’t ignore the impact of the Ukraine crisis on this firm. Yesterday the share price fell 40% on fears of military action affecting production and the possibility of sanctions. While it is possible that the business could be further impacted by these events, the company’s long-term track record is strong. Indeed, management recently signed on a deal to invest $471m in the Veduga mine project in southern Russia. This is estimated to yield 200,000 ounces of gold per year for 21 years.

While I won’t be buying this stock right now, I will be keeping a close eye to see if revenue begins to increase. This is likely, given the rising price of gold. I will certainly not rule out a purchase in the future.

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While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

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Andrew Woods 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.

Stocks and shares ISA: avoid this fee trap to save £331k

on February 25, 2022

Image source: Getty Images

When it comes to shopping around, we Brits love a bargain! But when it’s time to choose a stocks and shares ISA, things sometimes aren’t so simple. With things like platform fees and fund charges, it can be tricky to work out how much you’ll have to pay and spot the best deal.

Here, I take a look at how stocks and shares ISA fees work and how they could maul your investment wealth.

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How much are stocks and shares ISA fees?

Stocks and Shares ISA fees vary significantly between providers. And to make things more complicated, many providers charge several different fees.

Platform fees vary depending on your ISA provider, and funds fees vary depending on the chosen funds within your ISA.

A well-known provider charges platform fees of 0.45% per year for funds under £250,000. That drops to 0.25% per year for funds worth between £250,000 and £1 million and 0.1% per year for funds valued at over £1 million.

But that’s not all. There are also fund fees, and these could seriously eat into your investment wealth. This same provider charges 1.39% per year for investing in its ‘adventurous growth’ model portfolio.

Platform fees and fund fees are both charged on your portfolio. For example, if you had £100,000 invested with this provider you would be charged platform fees of £450 per year (0.45% of £100,000) and fund fees of £1,390 per year (1.39% of £100,000).

How much do fees cost over time?

I’m going to show how much these fees mount up over time.

If an investor used their maximum £20,000 ISA allowance and invested in an adventurous portfolio (with a fund fee of 1.39% per year), they would pay £368 in fees for their first year. But it’s the effect of fees over time that’s shocking!

If that same investor put away £20,000 every year for 40 years, they might pay a grand total of around £400,000 in fees over the course of their investing journey!

I’ve assumed that their investments grow at an average of 5% per year.

Are there cheaper stocks and shares ISA options?

The answer is yes! Even, sticking with the same provider but changing your fund choices could make a huge difference to your investment wealth over time.

Some low-cost index funds that track a whole share index cost as little as 0.06% per year. 

If you invested £20,000 in a low-cost tracker fund every year for 40 years, you could end up paying fees of around £69,000 in total. That’s a huge saving compared with £400,000.

What about a modest investor?

But what about more modest investors? Not all of us can afford to save £20,000 per year for 40 years. That’s true, but even more modest investors could still save a lot over time by watching their stocks and shares ISA fees. 

If you save £2,000 per year in a stocks and shares ISA for 40 years, you could save around £31,000 in fees by picking a low-cost tracker fund rather than an expensive model portfolio. Not too bad at all!

That’s assuming you invest in a low-cost index tracker fund with a fund charge of 0.06% rather than a model portfolio that charges 1.39% per year.

How to pick a stocks and shares ISA

So, if you’re thinking of opening a stocks and share ISA, it’s really worth looking at the small print. What are the platform fees and fund charges? What are the charges for the funds you’re picking? If you need some help, then take a look at our top-rated stocks and shares ISAs. We compare the fees and features and give our overall verdict.

Don’t leave it until the last minute: get your ISA sorted now!

stocks and shares isa icon

If you’re looking to invest in shares, ETFs or funds, then opening a Stocks and Shares ISA could be a great choice. Shelter up to £20,000 this tax year from the Taxman, there’s no UK income tax or capital gains to pay any potential profits.

Our Motley Fool experts have reviewed and ranked some of the top Stocks and Shares ISAs available, to help you pick.

Investments involve various risks, and you may get back less than you put in. Tax benefits depend on individual circumstances and tax rules, which could change.

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About the author

Avatar for Alice Guy (FCA)

Alice Guy (FCA)

Alice is a Suffolk-based personal finance writer specialising in pensions, tax, investment and small businesses. She is a qualified Chartered Accountant and has previously worked for KPMG London and Tesco Plc.


Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.

Is the perennially underperforming Lloyds share price about to explode?

on February 25, 2022

Through the ups and downs in its share price, Lloyds Banking Group (LSE: LLOY) has long commanded a loyal following among private investors. Indeed, it occupies an almost permanent place among the top 10 share buys on Hargreaves Lansdown’s platform. Despite this loyalty, the share price continues to disappoint. However, as the world recovers from Covid, interest rate rises loom, and a new CEO takes over with a growth strategy mindset, could this perennial underperformer finally deliver for the buy-and-hold private investor?

Leading UK bank

Lloyd’s value proposition is very clear. It is the UK’s largest provider of mortgages, current and savings accounts, and credit cards. It serves customers both digitally and physically, with over 18m digitally active users together with a significant branch network. This impressive footprint also provides the Group with a strong springboard to unlock new opportunities.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

One such opportunity that the business is looking to grow into, is in the under-represented intermediary products space such as motor finance, home insurance, protection, individual pensions, and investments. The Group’s recent acquisition of Embark provides an early indication of their strategic intent here. Wealth management is a fast-growing area of financial services, as more people take an active interest in catering for their retirement needs.

Lloyds and investment banking

One of the main criticisms of Lloyds, and one of the reasons why its share price has underperformed, relates to its one-dimensional business model. Its rivals HSBC and Barclays both have thriving investment banking propositions. As historically low interest rates have bitten into net interest income margins, the ability to call on outside sources of income make a huge difference to the bottom line.

The Group now has a clear strategy to build a compelling proposition in this space. It will do this through strengthening its cash, debt, and risk management offerings in transaction banking, debt financing, and targeted markets investments. However, it is only intending to enter this foray through “selective participation”. This is probably a wise move. Building capabilities on a scale comparable to Goldman Sachs or JP Morgan would move Lloyds far away from its core offerings, as well as requiring a huge upfront investment.

Would I buy Lloyds now?

Delivering bumper profits for 2021, it seems as though the woes that it experienced throughout 2020 are now in the rear-view mirror. The mortgage book has grown by 4.7%. It has a sector-leading cost-to-income ratio of 57%, with a target of reaching 50% in the medium term. Credit card activity is beginning to pick up.

However, I still remain wary. As long as interest rates remain low, then Lloyds’ ability to grow its income will always struggle. Although profits surged in 2021, this was more to do with the release of impairment losses set aside due to Covid, rather than growing the bottom line.

Due to its domestic focus, the bank’s fortunes will always be inextricably tied to that of the wider UK economy. As inflation really begins to bite, the cost-of-living crisis escalates, and early signs appear that the mortgage market might have already peaked, I remain to be convinced that it is a good investment for my portfolio.

FREE REPORT: Why this £5 stock could be set to surge

Are you on the lookout for UK growth stocks?

If so, get this FREE no-strings report now.

While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

What’s more, it deserves your attention today.

So please don’t wait another moment.

Get the full details on this £5 stock now – while your report is free.


Andrew Mackie has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. 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.

Could passive income help combat burnout?

on February 25, 2022

Image source: Getty Images

Passive income: maybe it sounds too good to be true. After all, don’t you need to work harder to earn more money? It seems the answer is no – at least, not always! In fact, this ‘work harder’ mentality has led to a burnout epidemic, meaning many of us are exhausting ourselves as we strive to reach our financial goals.

However, there’s good news: earning money doesn’t have to be this challenging. If you want a more hands-off approach to investing, read on to learn how a so-called ‘robo-advisor‘ might help you earn some passive income.

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What is a robo-advisor?

A robo-advisor is basically an automatic or automated investment tool. This unique software, based on algorithms, matches you with an investment portfolio based on your personal preferences.

  • You choose an account type, such as a stocks and shares ISA or personal account. 
  • When you open an account, you’ll answer a few questions, such as how much you want to invest and how much risk you’re comfortable with.
  • The algorithm selects investments that may suit your preferences, such as stocks, mutual funds or government bonds.
  • You pay a platform fee (fees vary by provider).

Some accounts are completely automatic, meaning there’s no human oversight, while others do involve some human management. 

Can robo-advisors help you make passive income?

Yes, they can. However, just remember that there’s always risk involved when you invest, and you might not get back what you put in. That said, here’s why a robo-advisor could help you earn passive income in the long run: 

  • It’s easy to get started, so there’s little upfront effort required from you.
  • You might improve your chances of making passive income by diversifying your portfolio. Adding a robo-advisor account to the mix could help you do just that.
  • The robo-advisor manages your portfolio, so you don’t need to worry about choosing or managing your own portfolio. This is great if you’re short on time or you’re busy managing other investments.

If your investments via a robo-advisor pay off, you’ll earn money by doing almost nothing, allowing you to focus your valuable time and effort elsewhere. 

How do you open a robo-advisor account?

First, think about what you want from your account. Consider:

  • What services you need from a robo-advisor;
  • How much automation works for you (just because it’s a passive income stream doesn’t mean you have to be completely hands-off!); and
  • What you’re willing to pay in fees for the services you want. 

There are many providers to choose from, including InvestEngine and Wealthify. When you’ve chosen, simply visit the company’s website, choose your plan and apply for an account.  

Are there downsides to using robo-advisors?

As with any investment opportunity, there are some drawbacks to using a robo-advisor for passive income. 

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  • Consider your investment goals carefully before choosing a robo-advisor.
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Ready to choose a robo-advisor? You can find a selection of providers offering these services over on our top-rated robo-advisors page!

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in the future. The content of this article is provided for information purposes only. It is not intended to be, nor 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.  

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Jennifer is a writer specialising in debt, personal banking, and small business finance.


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Best British stocks for March

on February 25, 2022

 We asked our freelance writers to share the best British stock they’d buy this March. Here’s what they chose:

Edward Sheldon: Legal & General Group

My top stock for March is FTSE 100 financial services company Legal & General Group (LSE: LGEN).

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Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

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There are a few reasons I’m bullish on the shares at present. One is that the company looks well placed to benefit from the shift into ‘value’ stocks. Right now, the stock has a P/E ratio of less than 10.

Another is that the group should benefit from rising interest rates. Higher rates should enable it to earn a greater return on its investments.

A risk to be aware of here is that the stock can be quite volatile at times. Overall, however, I think the risk/reward profile is attractive at the moment.

Edward Sheldon owns shares in Legal & General Group.

Rupert Hargreaves: Dignity

Funeral provider Dignity (LSE: DTY) suffered a severe setback in 2018. It had to slash prices following a spate of bad publicity. The firm now looks to be back on track. Analysts are forecasting earnings per share of 47p for 2021. That puts the stock on a forward price-to-earnings (P/E) multiple of 13.8. However, the company could miss this growth target if sales do not meet expectations. This is something I will have to keep in mind.

Still, I would buy the stock for its growth potential in the next couple of years.

Rupert Hargreaves does not own shares in Dignity.

Roland Head: Royal Mail

My stock pick for March is postal group Royal Mail (LSE: RMG). Chief executive Simon Thompson believes there has been a “structural shift” in parcel volumes since the start of the pandemic. I think he’s probably right.

What’s more, I think Mr Thompson is finally making the changes needed to modernise this business.

Royal Mail’s share price slide has left the stock trading on seven times forecast earnings, with a 6% dividend yield. Although the group faces some risks from rising fuel and wage costs, I think this is too cheap.

Roland Head does not own shares in Royal Mail.

Andy Ross: SSE 

Fairly early in March, a trading announcement from FTSE 100 energy giant SSE (LSE: SSE) is expected, which could lift the share price because these shares have a number of attractions. One is the ongoing shift to so-called value stocks, which I think would include SSE. Another is that the company has already upgraded its full-year adjusted earnings per share guidance from 83p to 90p, so the business is clearly performing well. Thirdly, there is the 5% dividend yield, making SSE potentially a decent income and growth share.  

Only the high levels of debt and the inconsistency of renewable energy would give me pause for thought when it comes to investing in SSE.  

Andy Ross does not own shares in SSE.

G A Chester: Smith & Nephew 

I think investor interest in FTSE 100 medical devices firm Smith & Nephew  (LSE: SN) could start to rekindle, following recent results and an announcement it’s appointed a new CEO. 

The results were in line with guidance. Meanwhile, the incoming CEO — Dr Deepak Nath — looks a strong candidate to deliver SN’s medium-term targets of consistent 4%-6% organic revenue growth and a trading profit margin of at least 21% (currently 18%). 

There are no guarantees, but Nath is fresh from leading a major programme to drive growth and margin expansion in the diagnostics business ($6bn sales/15,000 employees) of German medical devices giant Siemens Healthineers. 

G A Chester has no position in Smith & Nephew or Siemens Healthineers. 

Stephen Wright: Howden Joinery

My top stock for March is Howden Joinery Group (LSE:HWDN). The company sells kitchen and joinery products primarily to the UK homebuilding trade. I like this stock because I think it trades at a fair price and the company has a strong track record. 

The company has grown its retained earnings consistently since 2016 and lowered its share count steadily since 2014. I think that today’s prices imply a return of 6.5% and 7% out of the gate. If the company keeps doing what it’s doing, I think this stock can do very well going forward.

Stephen Wright does not own shares in Howden Joinery.

Paul Summers: Halma

Thanks to its strong track record of growing revenue, profits and dividends, there can’t be many better companies in the FTSE 100 than life-saving tech firm Halma (LSE: HLMA). Having tumbled in value so far this year on virtually no news, I think now could be a great time for me to load up.

Sure, a P/E of 35 still isn’t cheap. With minimal debt, a proven acquisition strategy and a market that can only grow in the years ahead, however, I’d much rather back the Amersham-based business over one of the index’s cheaper, more cyclical constituents.

Paul Summers has no position in Halma

Royston Wild: United Utilities 

During this period of extreme market volatility I think grabbing some classic defensive stodge could be a good idea. I’d do this by investing in water supplier United Utilities (LSE: UU). This FTSE 100 company’s share price stability in spite of the Ukraine crisis illustrates how it is (at least in my opinion) an ideal lifeboat when markets are nervous. Essentially the water it supplies can be guaranteed to remain in high demand whatever crisis comes along, which in turn keeps profits nicely stable. 

I also like United Utilities because of its big dividend yields, a happy consequence of its super-defensive operations. These sit at a healthy 4.2% and 4.4% for the financial years to March 2022 and 2023 respectively. 

Royston Wild does not own shares in United Utilities.

Andrew Woods: easyJet

As global travel reopens, I think easyJet (LSE: EZJ) stock could provide excellent growth for March and the long term. Only last month, the company announced that losses had halved for the three months to 31 December 2021, compared to the same period in 2020.

Looking forward, Switzerland, Norway and Sweden have removed just about all of their pandemic restrictions. I think it is only a matter of time before others follow. With more open borders comes more travel, and I think easyJet could make a great comeback sometime soon.

Andrew Woods has no position in easyJet.

Andrew Mackie: Fresnillo

My top pick for March is Fresnillo (LSE: FRES). The world’s largest silver miner has had a torrid time of late. Omicron, together with new Mexican labour laws, has hit production at its flagship mines.

However, I am looking beyond these short-term headwinds. Silver is probably the cheapest metal on the planet. As inflation continues to increase, I see tremendous upward potential for the white metal, which in turn will be reflected in the miner’s share price.

Silver is not only a precious metal. It has significant industrial uses too. As the world transitions to a low-carbon economy, this will ensure demand remains buoyant for decades to come.

Andrew Mackie owns shares in Fresnillo.

Kevin Godbold: Glencore

Commodity prices have been robust for some time. And it’s no surprise to see diversified mining stocks such as Glencore (LSE: GLEN) marching upwards. When prices are high and commodities are in demand, Glencore’s cash inflow rises.

Glencore is well placed in the nickel market with infrastructure it’s been optimising for decades. And that means the business looks set to benefit from rising demand from the electric vehicle industry and other sectors. Nickel is used for its electrical and magnetic properties among many other applications.

I think the stock could elevate further through March and beyond.

Kevin Godbold does not own shares in Glencore.

Christopher Ruane: S4 Capital

After a strong 2021, S4 Capital (LSE: SFOR) has seen its share price fall so far this year. Investors are concerned about the impact of costs on profit margins as the company keeps growing at speed.

I think the fast growth shows strong demand for S4’s services. Its client roster is expanding. A digital-only strategy seems well suited for the current marketing environment. Annual results due in March will reveal how S4 is performing as it tries to double revenues and gross profits organically within three years.

Christopher Ruane owns shares in S4 Capital.

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Why I’m avoiding TUI shares at all costs

on February 25, 2022

The recent rally in TUI AG (LSE:TUI) shares might make the stock look attractive. The TUI share price has gained 20% over the last three months, but is still 85% down from its 2018 highs. I think, however, that TUI’s financial situation makes its shares unattractive as an investment proposition.

Operations

The cause of TUI’s financial problems can be found in its income statement. The company’s costs have declined more slowly than its revenues since the beginning of the pandemic. This is because TUI has still had to maintain its aircraft, buildings, and cruise ships, as well as pay staff to do so. These are TUI’s major costs and they apply whether or not the company is collecting revenue from passengers.

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As a result, a 66% decline in revenues has moved TUI from making an operating profit of £576m to losing just under £1.5bn. Looking forward, I expect this to reverse. As TUI’s operations resume, I think that its profits will rise faster than its revenues. The trouble is, I also think that the costs the company has incurred will cause a lasting problem for TUI as an investment.

Debt

As an investor, I’m looking for companies that can return cash to me within a reasonable timeframe. TUI’s current financial situation—and specifically, its debt levels—give me reason to doubt that it will be able to do this. This makes me think that TUI shares are not an investment opportunity for me.

The biggest concern that I have is that TUI has to use a lot of the money it makes paying interest on its debt. At the moment, TUI pays around £390m annually in interest. Obviously, TUI made a loss last year, which is entirely understandable. But I’m not sure that the situation improves enough even if TUI’s earnings recover to their 2018 (pre-pandemic) levels.

In 2018, TUI made an operating profit of around £576m. Even if the business recovers to that level, the company’s interest payments would still amount to around 67% of its operating income. And that is just the interest on TUI’s debt—it doesn’t include the company paying down the debt itself, which has increased by 168% since 2018.

The situation is made worse by the rising interest rate environment. In order to combat inflation, the Bank of England has raised interest rates twice since December. For a company like TUI, this makes the possibility of dealing with their debt by refinancing it less attractive. As someone thinking about investing in TUI shares, I think that this means that the company will have to pay its debt down sooner, which will further inhibit its ability to return cash to shareholders.

Conclusion

In my view, there is reason to think that TUI’s business will bounce back well as the restrictions associated with the pandemic end. In the meantime, the company’s share price might continue to increase. From an investment perspective, however, I think that the company’s financial situation is such that it will be a long time before it is in a position to provide an acceptable return. I also believe that there are other UK companies that provide more attractive opportunities. As a result, I’m avoiding TUI shares at all costs.

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Stephen Wright 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.

I was utterly wrong about these 2 battered FTSE 100 stocks!

on February 25, 2022

As a veteran value investor with 35 years of investing experience, I much prefer to buy cheap shares. For me, these are stocks with low price-to-earnings ratios, high earnings yields, and above-market dividend yields. Thus, I generally steer clear of go-go growth stocks and racy risk shares. Then again, sometimes I’m drawn to ‘fallen angels’. These are FTSE 100 shares that have dived in value and, therefore, could be ripe for recovery. In the past 10 days, I have written about two potential recovery plays that quickly went wrong, badly wrong. Here are two battered FTSE 100 stocks that both crashed within days of me writing about them.

FTSE 100 flop #1: Evraz

The top of my FTSE 100 flops for 2022 is Evraz (LSE: EVR). This global steelmaker and miner has operations in Russia, North America, and Canada (note Russia is in bold). Evraz’s main outputs include steel, iron ore, coal, and vanadium — prices of which have soared in 2021-22. Evraz was founded in 1992 and its biggest shareholder is Russian billionaire Roman Abramovich (owner of Premier League team Chelsea FC). At their 52-week high, Evraz shares hit 707.6p in May 2021. When I wrote about this stock a week ago, it stood at 306.7p. When I covered Evraz earlier, on 15 February, its shares stood at 326.6p.

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But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

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Yesterday, Evraz shares fell to a low of 160p, before closing at 171.25p. As I write, they hover around 205.1p (+20% today), valuing the group at £3bn. After crashing spectacularly, the share now trades on 2.7 times earnings and an earnings yield of 37.8%. Evraz’s dividend yield has exploded to 40% a year (10 times the FTSE 100’s cash yield). Of course, now that Russia has invaded Ukraine, these figures may be mere fantasy. With western nations keen to punish President Vladimir Putin and his Russian oligarchs, all bets are off. One British MP has already called for sanctions to be imposed on Roman Abramovich. Hence, though Evraz shares may well recover in future, I regard them as uninvestable right now. Far too risky for my blood!

Crashed stock #2: Polymetal International

My second battered stock is Polymetal International (LSE: POLY), which I wrote about in the 15 February article above. Like Evraz, Polymetal has major operations in Russia. It is an Anglo-Russian miner of gold and silver, registered in Jersey and with headquarters in Cyprus. When I wrote about this FTSE 100 stock 10 days ago, it stood at 1,124.5p, valuing the miner at £5.3bn. At yesterday’s low, POLY had crashed to 503.83p, before leaping to close at 682.4p.

As I write, the share hovers around 728p, up 45.6p (+6.7%) today, valuing the miner at under £3.5bn. This leaves Polymetal shares trading on 4.2 times earnings, for an earnings yield of 23.8%. Its dividend yield has blown out to 13.3% — over 3.3 times cash yield. Again, I can’t rely on these figures right now. Even though the prices of gold and silver have risen in early 2022, Polymetal faces the same geopolitical risks as Evraz. Investors much braver than me may buy at these levels, but I won’t. After Putin’s latest actions, all Russia-related stocks are dead to me — for 2022, at least.

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Cliffdarcy 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.

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