Confidence or arrogance? Investors are backing bucketed UK stocks!

Confidence or arrogance?  Investors are backing bucketed UK stocks!

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It seems that confidence in UK equities is increasing. But does the market deserve this optimism and support? Or are investors getting arrogant in their hopes?

Here’s what’s happening right now with UK investing, why investors think we’ve turned a page and how you can invest in the best UK companies.

What’s going on with UK stocks?

After record outflows of £5.3bn during 2021, it appears investors have changed tune and are sucking in UK stocks.

According to a recent survey of ISA holders conducted by Free trade and InvestingReviews.comone in five investors say they plan to increase their exposure to UK equities.

And a measly 4% say they will reduce their investments in the UK.

Why do investors trust the UK market more?

Dan Lane, Senior Analyst at Free trade he believes part of this British resurgence has to do with value investing and a shift in sentiment towards US growth stocks. He says: “Perhaps the relatively cheap valuation of the UK market is proving too hard to resist, or perhaps the appeal of US technology is waning slightly.

“Whatever the reason, the UK looks to be back on the menu in 2022. Investors will still need to hold onto that long-term view, though.”

He goes on to explain that volatility aside, investing your cash the right way can help combat the unpleasant effects of inflation. He explains: “However, what is clear is that leaving your money in a cash account is not really an option for anyone hoping to generate significant returns. It doesn’t carry the same risks as investing, but the cash drag is real.”

Inflation may worry some investors, but that should make them take a look at their assets and how well prepared their companies are to take charge of their own destiny, regardless of what happens in the global economy.”

How can investors find good value British shares?

This may seem like a tall order, but finding great long-term investments doesn’t have to be a chore.

If searching through the financial reports of every company on the London Stock Exchange isn’t your thing, that’s fine! Here are two quick and easy ways to find great value investments in the UK without all the headaches and legwork:

  1. Use The Motley Fool Stock Advisor service, regularly dishing out excellent stock picks.
  2. Research and find a investment confidence (eg Temple Bar) which focuses on value investing in the UK.

Where can you start investing in UK stocks?

Investing in UK companies and funds is now easier than ever. Your first step is to get set up with a stock trading account.

Ideally, it’s worth keeping your shiny new British investments in a ISA stocks and shares. This type of account has the incredible benefit of shielding your investment earnings from taxes.

Just remember that every investment carries a degree of risk, and you may get back less than you invest. So make sure you control the rest of your finances and don’t invest more than you can afford.

Don’t leave it for the last minute: fix your ISA now!

stocks and shares isa icon

If you are looking to invest in stocks, ETFs or funds, then Opening a Stock and Share ISA could be a great choice. Protect up to £20,000 this tax year from the Taxman, there’s no UK income or capital gains tax to pay for potential gains.

Our Motley Fool experts have reviewed and classified some of the best ISA Stocks and Shares available, to help you choose.

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

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