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Metaverse stocks could be ‘ripe for recovery’ this month following a turbulent January in which many of the businesses involved in the sphere saw their share prices tumble.

So, which particular metaverse stocks have been tipped to perform well this month? Let’s take a look.

What are metaverse stocks?

Metaverse stocks refer to companies that are involved in the digital ‘metaverse’. If you don’t know what the metaverse is, don’t worry – you probably aren’t alone!

The term is broadly defined as a three-dimensional world that is accessible to millions of people. In other words, it can refer to a virtual space that enables you to interact socially with others, either for business or pleasure.

For example, if you’ve ever used an Oculus or PlayStation VR headset, then it’s likely you have experienced the metaverse – especially if you’ve communicated with others on a virtual basis through these platforms. 

You don’t need to have a fancy VR headset to experience the metaverse, however. Popular online PC games, such as Fortnite and Minecraft, are considered to utilise the metaverse too. That’s because these games support online interactions with millions of other plays.

The metaverse can also encompass ‘augmented reality’, which refers to combining the virtual and the real world. An example of an augmented reality application is Pokemon Go. This is a mobile game that took the world by storm in 2017, before seemingly falling into obscurity.

While the metaverse is currently focused on fun, social elements, many believe there is huge scope for its growth. For example, it could become a place where business meetings are conducted in future. It may also become the primary place where we buy and sell goods to each other.

What has happened to metaverse stocks recently?

According to IG, metaverse shares are at their “lowest in months” following market-wide selloffs. ‘Meta’ – the new name for Facebook – is one such stock that has seen its value plummet recently.

IG does, however, suggest that February could prove a good month for these types of shares. The investing platform claims that there are signs of an ‘overcorrection’ in the market.

Which stocks have been tipped to perform in February?

IG suggests that there are four metaverse stocks to watch out for this month.

1. DocuSign 

DocuSign enables the signing of documents digitally, via an e-signature. Its share price has gone from $310 (£229) in September to $117 (£86). This represents a fall of 60%.

However, this recent drop is perhaps surprising given the company remains a leader in its field. As a result, many of its investors will be hoping its price will recover to previous highs seen last year.

2. Roblox 

Founded in 2004, Roblox is an online gaming platform that allows users to program and play games created by other users. The company’s share price has plummeted by 44% over the past month due to concerns surrounding interest rate rises in the United States.

Despite the drop, IG suggests the company has an edge over its competitors due to its ability to ‘respond rapidly’ to emerging trends.

3. Advanced Micro Devices (AMD)

Advanced Micro Devices is a semiconductor company that makes computer processors. Its share price has dropped 27% since the start of the year. 

However, the company has had better news recently, following a tie-up with ‘Xilinx’, a Chinese chip manufacturer. So, is AMD’s share price set for a better performance this month?

4. Nvidia 

Nvidia is a company that designs graphics and processing units. Its share price fell 22% in January. However, IG highlights that despite Nvidia’s recent fall, its share price has increased by over 700% in five years!

The company recently announced it will be Meta’s primary partner and is hoping to build a world-leading supercomputer. If successful, there’s every chance Nvidia’s share price will climb. 

How can you invest in metaverse stocks?

It’s important to note that any stocks can rise and fall in value. As a result, it’s worth conducting your own research before deciding to invest in any individual stock.

If metaverse stocks do interest you, then you can invest in companies in this sector by opening a share dealing account and picking investments that are involved in the sphere.

Are you new to investing? If so, take a look at The Motley Fool’s investing basics to get you going in the right direction.

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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.

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According to Halifax, 2021 saw a record increase of 35% in first-time buyers getting on the property ladder despite rising prices and low affordability. Halifax reports that the average first-time buyer was a 32-year-old buying a £264,000 property with a deposit of £54,000.

The housing market was buoyant in 2021, fuelled by the government’s stamp duty holiday, with ONS reporting that average prices increased by nearly 10%. With the Bank of England increasing interest rates on 3 February, first-time buyers may be further feeling the squeeze.

So, where are the most and least affordable areas to live in the UK? And what steps can buyers take to help them save a deposit for their first home?

Where are the most affordable areas to buy?

Here are the five most affordable areas in the UK, according to Halifax:

• Clackmannanshire (near Edinburgh) is the most affordable area, with the average price of a first-time buyer’s home being three times average income (the ‘price-to-income’ ratio). Rightmove reports average house prices of £168,000 in this area.
• West Dunbartonshire and East Ayrshire are in joint second place, with price-to-income ratios of 3.2. Both areas are near Glasgow and have average house prices of £133,000, according to Rightmove.
• The last two areas are also near Glasgow. North Ayrshire is the fourth most affordable area, with a price-to-income ratio of 3.3, followed by Renfrewshire at 3.5.

And where are the least affordable areas?

Halifax identified these as the five least affordable areas for first-time buyers, all being in Greater London:

• In first place was Brent, with a price-to-income ratio of 12.3, putting it well out of reach for most first-time buyers. Average house prices are £763,000 in Cricklewood, £770,000 in Willesden and £492,000 in Wembley.
• Camden was in second place with a price-to-income ratio of 12.2. Average house prices are an eye-watering £1.9 million in Primrose Hill, £1.6 million in Fitzrovia and £1.5 million in Hampstead.
• Haringey in North London, covering Tottenham, Wood Green and Hornsey, was the third least affordable area with a price-to-income ratio of 11.4.
• Waltham Forest was in fourth place, with a price-to-income ratio of 10.9. Average house prices are £545,000 in Walthamstow and £519,000 in Chingford.
• Hillingdon in North-West London was the fifth least affordable area, with a 10.6 price-to-income ratio.

As a general rule, buyers can borrow up to four to 4.5 times their annual salary, meaning up to £135,000 if you earn £30,000. This makes it very difficult for first-time buyers to afford houses in many parts of the UK, particularly given the size of deposit needed.

How large a deposit do you need?

The size of the deposit is determined by two things:

1. Your mortgage lender’s requirements: mortgages are typically available up to 95% loan-to-value, meaning you’d need a minimum of a £20,000 deposit for a £400,000 house. If you have a larger deposit, you’ll be more attractive to lenders and potentially eligible for cheaper mortgage rates. 
2. The price of the house: unsurprisingly, higher deposits are needed in areas with high property prices, as the table below (from Halifax) shows.

Region	Average house price	Average deposit	% deposit
London	£489,000	£116,000	24%
South East	£322,000	£61,000	19%
South West	£239,000	£50,000	20%
West Midlands	£205,000	£37,000	18%
North West	£175,000	£34,000	18%

First-time buyers in London need a sizeable deposit of £116,000, nearly a quarter of the average house price. The West Midlands and the North West are the most affordable areas, with average deposits of under £40,000.

How can you boost your deposit?

Rising house prices have made the property market more challenging for first-time buyers. Halifax now estimates that the age of the average first-time buyer has increased from 29 to 32 over the last decade.

According to Savills, the ‘Bank of Mum and Dad’ supported 49% of first-time buyers’ purchases in 2021. But if that’s not an option, how can you increase your deposit?

It’s not rocket science, but small savings such as ditching takeaways or waiting to upgrade your phone add up over time. Rent is a major cost, so living with your parents could increase your disposable income.

It’s also worth checking your savings accounts to ensure you’re getting the best rates of interest. But with inflation over 5% and the average savings account paying 0.2%, there may be better ways to make your money work harder.

UK stock market returns have averaged nearly 8% a year according to IG (based on the FTSE 100 since 1984). Stocks & Shares ISAs are a good way of investing in the stock market as there’s no income or capital gains tax to pay. You can contribute £20,000 per person per year. Investing in funds could be a good way of spreading risk, as you’re effectively buying a bundle of shares picked by market experts.

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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.

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This week, all eyes were on the Bank of England and Ofgem.

While the base rate went up slightly, it won’t make a huge difference to UK households. In contrast, the energy price cap has gone up by 54%. And with inflation continuing to drive the cost of living up, 2022 is set to be financially challenging for Britons. According to the Resolution Foundation, the number of households that will face ‘fuel stress’ will rise to 6.3 million when the cap rises in April. 

Here, I take a look at the impact of the pandemic on the spending attitudes of the British population. 

The fallout from the pandemic 

The last two years have been characterised by fear and uncertainty, making them particularly challenging for many in the UK. And according to Toluna’s Global Consumer Barometer Study, it was not only our finances that took a hit. Our spending behaviours and attitudes were also affected. The survey taps into a community panel of more than 36 million members around the world, providing a snapshot of current consumer perceptions.

The latest research reveals troubling trends for the British public. Out of the 1,066 Britons surveyed, almost half (44%) currently have less money than they did before the pandemic began. More than one in three (37%) are increasingly concerned about spending money over the coming months. And one in five (21%) are still concerned about the prospect of losing their job. 

Tighter finances affect spending behaviour 

Both long- and short-term spending behaviour have suffered as a result of financial difficulties. The rising cost of living is driving many Britons to make tough choices when it comes to their purchases:

• 54% of respondents say that the price of a brand is the major factor behind their choice.
• Currently, only 14% consider environmental factors or sustainability when making a purchase.

According to Lucia Juliano, head of research UK & NL at Toluna, the unpredictability of the pandemic and its impact will have a long-lasting effect on consumer behaviour. And with rising energy and household bills, as well as inflation, this creates “a perfect storm of financial worries and uncertainty”.

With restrictions slowly lifting and international travel back on the cards, it is apparent that the desire to spend money on such activities is a lot weaker than before the pandemic. And as the financial household squeeze continues, people will focus on saving rather than spending money.  

A Christmas to forget

While social distancing was a major barrier for Christmans 2020, finances weighed heavily on people minds in 2021. Almost half of the respondents (48%) say they were concerned about whether they could afford Christmas. And one in ten say they had extreme concerns due to their financial circumstances. 

Borrowing money to afford Christmas was the unfortunate outcome for almost two in five (38%). And a third (33%) of those surveyed ended up spending less on Christmas shopping in 2021 due to changes in their financial situation. 

The outlook for the year ahead 

Brits’ spending choices will continue to be governed by financial insecurity. According to the survey results, 49% of people’s Christmas spending was heavily influenced by the new Covid-19 variant, economic uncertainty and the rising cost of living. 

Of those surveyed, 57% are particularly concerned about rising energy costs. This is impacting their decisions when it comes to smaller day-to-day purchases as much as larger ones. In that regard, 32% of people intend to spend less on holiday and leisure in 2022, while a third (33%) plan to scale down how often they go out to eat.    

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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.

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Companies in the FTSE 350 ( FTSE 100 and FTSE 250 companies combined) are usually promoted into or demoted out of the indices quarterly through a FTSE reshuffle. And to ensure that the same companies, especially those on the borderline, don’t yo-yo up and down after every reshuffle, index provider FTSE Russell follows a particular rule.

A company must be in the top 90 by market cap to be promoted. Likewise, a company must be below the 110th biggest company to drop out. So, what happens if you hold stocks in an FTSE 100 company, but it gets booted to FTSE 250? Should you sell your stock or continue holding? Let’s find out.

Why reshuffle the FTSE 100?

At any given time, the largest stocks in the FTSE 250 may grow significantly more than the smallest stocks in the FTSE 100. After all, shares trade daily, and market caps can go up or down. A FTSE reshuffle is helpful to investors as it gives insight into the companies struggling or rising in the big league.

Who dropped out of FTSE 100 in the latest reshuffle?

Cybersecurity company Darktrace and chemicals firm Johnson Matthey were demoted out of the FTSE 100 to the FTSE 250.

Darktrace is a cybersecurity company with an AI that interrupts in-progress cyber attacks in seconds without affecting regular business operations. The company initially saw a strong share price run but lost momentum around November 2021. Large investors started selling their shares, which might have contributed to a slump in its share price.

Johnson Matthey manufactures catalysts, pharmaceutical materials and pollution control systems. But with increasing interest in electric vehicles (EVs), the company’s core vehicular products are threatened. And even though it tried to improve its own battery material business to adapt to the preference for EVs, the competition was too stiff. This could have been one of the reasons why it dropped out of the FTSE 100.

What should you do if a company you hold is booted out of FTSE 100?

Of course, when a company in the FTSE 100 or FTSE 250 is demoted, it gets a lot of attention from the public. That could even cause panic among investors who hold their stock, creating room for poor decisions.

Overall, it’s important to remember that just because a company has been relegated from the FTSE 100 doesn’t mean its outlook is completely negative.

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, recommends keeping calm, reviewing and understanding why a particular company was demoted. The company could just be facing a challenging period and could be promoted back into the FTSE 100 during the next reshuffle. However, this might not always be the case. Carrying out your due diligence is crucial when deciding whether to sell or hold, but don’t make it a panicked decision.

For example, in the case of Johnson Matthey, it could be worth thinking about what will happen once the sale of petrol and diesel cars is banned in 2030. How will this affect the company? Are there plans to shift to another business? If yes, is there any long-term growth for the new business? Asking such questions can help you make informed decisions.

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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.

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The Bank of England’s decision to increase its base rate on Thursday has already impacted savings rates. We know this because two providers have launched new table-topping deals on easy access and fixed accounts.

If you’re earning a poor interest rate on your savings, then now’s a good time to look at what else is available. Here’s the lowdown on the current savings market, and how you can move your money.

How does the base rate impact savings rates?

The Bank of England’s base rate determines the rate at which banks can lend to one another. For years it’s been in the doldrums. For most of 2021 for example, it sat at a record-low of 0.1%.

Due to years of low base rates, banks have been able to borrow at rates of next to nothing. As a result, there’s been little appetite to offer savers anything other than misery rates. For mortgage holders, however, it’s been a different story as they’ve benefitted from years of rock-bottom rates.

Yet, on 3 February, the Bank of England decided to hike its base rate from 0.25% to 0.5%. It’s the second time in two meetings of the Monetary Policy Committee that the central bank has acted. The latest rise follows its decision to up the rate from 0.1% to 0.25% in December. Importantly, more base rate rises are likely later this year as the UK economy grapples with rising inflation.

We’re already seeing how the new base rate is impacting mortgages, making them more expensive, so many will be wondering when savings rates will also increase?

Thankfully, this is already happening. Two providers have made a move by launching new table-topping rates.

What new savings rates are available?

Following the base rate rise, savings rates have already increased on easy access and fixed savings accounts. 

Easy access accounts

On the easy access front, Aldermore now pays the highest savings rate at 0.75% AER variable. To open the account, you must apply online via the Aldermore website and make an initial deposit of at least £1,000. 

However, there is a catch with this account. While you can access your money, it isn’t suitable if you want to make lots of withdrawals. That’s because you can only make two penalty-free withdrawals a year. If you make more than this, your rate will drop to just 0.1% AER variable. 

If you are looking to make more than two withdrawals, then both Cynergy Bank and Investec offer easy access accounts that pay a slightly lower 0.71%. Both of these accounts allow you to access your money as often as you like.

Cynergy’s rate includes a 0.41% fixed bonus for a year and you can save from £1. The Investec account doesn’t have a fixed bonus and you need at least £5,000 to open it. 

For more options, see The Motley Fool’s top-rated easy access savings accounts.

Fixed savings accounts

Recognise Bank’s new fixed savings account pays a table-topping 1.6% AER fixed for one year. This is significantly higher than the next-best one-year fixed account from Union Bank of India, which pays 1.4% AER fixed.

To access Recognise Bank’s account, you’ll need to open it online and have at least £1,000 to save.

If you’re happy to lock away your cash for longer, you can earn a higher savings rate. Monument Bank is currently at the top of the pile, paying 2.2% AER fixed for five years.

However, accounts with very long fixed terms come with a risk that if savings rates rise in future, you won’t be able to move your money.  For more options, see our list of top-rated fixed savings accounts.

All of the accounts above have the full UK £85,000 FSCS savings safety protection. This means that if any of the providers go bust, your money will be protected. 

How easy is it to move your money?

There is no equivalent scheme to the current account switch service for moving savings accounts. This means that if you want to switch, you’ll need to manually move over money from your old savings provider to your new one. 

Keep in mind that some savings accounts require you to link your current account. In such instances, you may have to withdraw your cash to a current account before being able to stash it into a new savings account.

While it may sound laborious, moving savings accounts isn’t too complex in reality. With that said, some providers do make it easier than others to move your cash. If this is something that concerns you, do take the time to read reviews of savings providers before deciding on whether to open a new account.

For more savings tips, plus information on how you can boost your interest rate, see our article that offers four ways to bag yourself the highest savings rates in 2022.

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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.

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