On the one hand, buying shares in the UK has never been easier. All you need is an account with an online broker and an instant payment method like a debit/credit card and that’s it – you can invest at the click of a button.
However, with tens of thousands of shares to choose from, how do you know which investments are worth your time and money?
To help clear the mist – here we discuss the best shares to buy right now in the UK. In this edition, we cover stocks that are hot for the month of January 2021.
Top 10 Shares to Buy in 2021
Here’s a quick overview of our top 10 shares to buy in January 2021:
- Tesla – One of the Best Performing Shares of 2021 – Invest Now
- Amazon – Up 81% in the First 10 Months of 2021 – Invest Now
- British American Tobacco – Best Dividend Stock on the FTSE 100 – Invest Now
- Inovio Pharmaceuticals – In Phase 2/3 of COV-19 Vaccine Trials
- Square – 5-Year Returns of Over 1,300% for This Tech Stock
- Zoom – The Future of Video Communication (622% Gains in YTD)
- Upwork – Market Leader in the Online Freelance Scene
- Berkshire Hathaway – Invest Alongside Warren Buffet
- Procter & Gamble – Safe and Secure Non-Cyclical Stock
- Boohoo – King of the Aim Resumes Upward Momentum
The Best Shares to Buy Right Now UK
With just two months of the financial year to go – our top stock prices of 2021 are discussed below. Take note, although many of our best shares to buy now are listed in the US, this isn’t a problem as a UK investor. On the contrary, FCA brokers like eToro allow you to buy foreign shares on a commission-free basis.
1. Tesla – One of the Best Performing Shares of 2021
Tesla – the electric car maker and all-round innovator – was one of the best performing shares in 2020 and is already continuing its winning streak into 2021. At the start of 2020, you would have paid a share price of just under $400 per share. At the time of writing in January 2021, the very same shares are priced at $789 – and that’s after a 5:1 stock split, so the price relative to last year is really over $3,500. In 2020 alone, Tesla stock gained an astounding 740%!
This is somewhat uncanny when you consider the health of the wider economy. The automobile industry in particular struggled to get a bearing in the wake of the coronavirus pandemic. But Tesla finally hit its goal of delivering half a million cars in a single year and is rapidly expanding its manufacturing capabilities.
So how much bigger can Tesla get? Well, in the short-to-medium term, there is no reason to suggest that the upward momentum will stop anytime soon. After all, the firm is in the process of building new manufacturing capabilities and has tens of thousands of waitlisted car orders. With several new models in progress as well – including an upcoming vehicle that is reported to have a price tag of just $25,000 – there is arguably a lot more to come from Tesla. That’s why it’s number one on our list of best shares to buy now.
Your capital is at risk.
2. Amazon – Strong Performance Expected in 2021
Much like Tesla, online retailer Amazon has performed extraordinarily well in 2021 – leaving much of the wider markets behind it. In fact, had you purchased Amazon stocks at the turn of the year – you would have forked out ‘just’ $1,898 per stock. As of January 2021 – the same shares are now priced at $3,193. As such, a £5,000 investment 10 months ago would now be worth in the region of £9,000.
In the case of its core online marketplace – both sales and operating profits continue to outperform market expectations. This was especially the case in its most recent earnings report – where Amazon smashed through its projected figures. Outside of the main Amazon retail website – the firm is involved in heaps of other innovative ventures. In particular, its subscription-based services are growing nicely.
This includes its Amazon Prime offering alongside its digital TV and media streaming services. You then have AWS (Amazon Web Services) – which is by far the largest cloud-based provider in the space. In addition to this, Amazon is also working on developing its ever-growing grocery venture and even a fully-fledged same-day drone-based delivery service. All in all, Amazon is likely to remain in our portfolio of the best shares to buy for many, many years.
Your capital is at risk.
3. British American Tobacco – Best Dividend Stock on the FTSE 100
While the long-term prospect of both Amazon and Tesla remains extremely positive, neither pay dividends. Even investors who aren’t looking for income can smooth out returns by investing in a solid dividend stock. So, we think British American Tobacco is worth bringing to your attention.
In fact, at the time of writing in January 2021 – this tobacco giant is now the biggest dividend payer on the FTSE 100. As per its latest announcement, British American Tobacco is expected to pay in the region of £5 billion in dividends this year.
Based on its current stock price, this translates into a very generous trialing yield of around 7.5%. This is particularly attractive when you consider the state of the wider FTSE 100. That is to say, dozens of firms either cut or outright suspended their dividend payments in 2020, and have no plans to return them in 2021. As a result, income-seeking investors have very limited choices right now. Importantly, British American Tobacco isn’t planning any dividend cuts this year.
The stock has started 2021 at just under 2,800p, which is well above its March low of 2,362p. It’s been climbing recently, so we could see British American Tobacco shares test the 52-week high of 3,507p in the coming months as well. That would be a huge win for investors and seems entirely reasonable when you consider the strength of this company’s balance sheet.
Your capital is at risk.
4. Inovio Pharmaceuticals – In Phase 2/3 of COV-19 Vaccine Trials
This particular stock pick won’t be for everyone – especially those of that are looking to keep your risks to an absolute minimum. Inovio Pharmaceuticals is a US-based biotechnology firm that claims to be close to finding a vaccine to COVID-19. In fact – it is already in phase 2/3 of its clinical trials – hence the speed with which its shares have increased this year.
At the start of 2020 – this potential sleeping giant was priced at just $3.21 per stock. Fast forward to the first week of January and Inovio was priced at over $9 per share. At it’s peak in June, the stock was worth an astonishing $33 per share. The stock took a hit when Pfizer and Moderna announced their vaccines, but the world desperately needs more doses so there’s still a huge market for an Inovio vaccine.
Crucially, everything rides on whether or not Inovio’s clinical trials succeed. The FDA initially put a temporary block on its phase 2/3 endeavours as the agency had several concerns about the technology being used. Inovio got a green light in November, but investors will want to see some good news from the trials before buying up shares again. Buying Inovio now is quite risky, but you’re likely to be richly rewarded if the company reports good results from its vaccine trial in the next few months.
Your capital is at risk.
5. Square – 5-Year Returns of Over 1,300% for This Tech Stock
Although you might not have heard of Square Inc, this shouldn’t dissuade you from adding it to your portfolio. After all, the stocks have returned over 1,300% since they went public in 2015. Square, which is co-owned by Twitter founder and CEO Jack Dorsey, is an American payment provider platform.
Initially, the company was launched as a payment gateway for merchants to accept debit/credit cards. All merchants need to do is download the Square app, and then customers can instantly pay for goods and services with their credit cards.
With that said, Square is now much more than just a payment gateway. It has added banking and lending services, and recently launched a partnership with Shopify that will enable it to become the de facto payments processor for eCommerce. In addition, Square now offers cryptocurrency exchange services at the click of a button.
Square had an extremely strong year in 2020, gaining over 265%. Although some might argue that Square is overprice, we think the sky is the limit for this stock. There’s no sign that its momentum is slowing down, either, so now is the perfect time to get in on this fintech company and ride the shares higher.
Your capital is at risk.
6. Zoom – The Future of Video Communication
Zoom, the video conferencing startup, is yet another success story of 2020. Arguably, much of the company’s success was thanks to the COVID-19 pandemic. Millions of users came online seemingly overnight as work moved remote at offices around the globe. Zoom was perfectly positioned for the growth, as it already catered to corporate, academic, and personal users alike.
On the business side, Zoom offers a read-made product for remote work. Employees can easily communicate via video calls and set up meetings in seconds. During the lockdown, this was often the de-facto method for employers and employees.
Zoom is a relatively young stock – the company IPO’d in 2019 at a price of $62 per share. Shares had barely moved going into 2020, but the video conferencing service gained a whopping 385% last year.
Zoom has been trending downward going into 2021, but we think this is a temporary dip. In fact, with more and more employers talking about using remote work permanently, Zoom is poised for long-term growth. The current pullback is a good chance for investors who missed this stock last March to get in at a reasonable price.
Your capital is at risk.
7. Upwork – Market Leader in the Online Freelance Scene
Upwork is an online platform that matches talented freelancers with paying clients. This might be an investment website looking for a financial writer or a startup looking for a website designed for their venture. Either way, Upwork dominates this industry (which includes competitors like Freelance.com and Fiverr) by some distance.
Upwork went public in late 2018, and the IPO was initially a success. The stock moved quickly from $15 to $20, a more than 30% gain. However, investors seemingly lost interest after that. Upwork stock began 2020 at just $10 and then hit an all-time low of around $5 in March when the stock market crashed.
However, the COVID-19 lockdown actually benefited Upwork. Many companies that laid off employees suddenly needed freelancers, and many people who had free time during the pandemic began side hustles as freelancers on Upwork. The stock inched upward for most of 2020, but exploded in early November on news of COVID-19 vaccines. That’s because any economic growth this year as businesses get back to work is likely to benefit Upwork and its freelancers.
At the time of writing, the shares are priced at just over $37 – representing growth of more than 620% since March. Still, Upwork only has a market capitalization of $4.5 billion, and we think this company could be a lot bigger than that by the end of 2021.
Your capital is at risk.
8. Berkshire Hathaway – Invest Alongside Warren Buffet
Berkshire Hathaway is the public company founded by investment legend Warren Buffet. By buying shares in this company, you will be investing in a well-diversified portfolio of stocks. That’s because Berkshire Hathaway is essentially an investment firm unto itself. Best of all, most of these stocks were personally selected by Buffet himself – so it effectively operates like a mutual fund.
At the time of writing, Berkshire Hathaway holds in the region of 60 businesses alongside a significant portfolio of shares. Buffet is known to favour strong and stable companies with a proven track record. This includes the likes of Coca Cola and Disney. Crucially, when Buffet talks, the markets listen. This was evident in 2020, when Buffet announced that it would be offloading a huge chunk of its airline stock holdings. Airline stocks crashed the next day as investors rushed to the exit to follow Buffet’s advice.
Keep in mind that Berkshire Hathaway is best as a long-term investment. Buffet believes in finding companies that offer value over the long run, so his company tends to gain value steadily over time rather than in fits and starts. In 2020, for example, Berkshire Hathaway grew a modest 3.3%.
Notably, single share of Berkshire Hathaway will set you back a staggering $350,000. However, you can invest from just $50 when using eToro, since this broker allows you to purchase fractional shares of companies.
Your capital is at risk.
9. Procter & Gamble – Safe and Secure Non-Cyclical Stock
In times of economic uncertainties, you’ll want to focus on stocks that not only possess strong and stable balance sheets and a safety net of large cash reserves – but ones that operate in non-cyclical sectors. This simply means that the company’s products or services are in demand no matter how the wider economy is performing. One of the best companies in this category is Procter & Gamble.
This US-based global powerhouse is behind a large portfolio of consumer-based products that, generally speaking, are not impacted by market recessions. This includes products from within the healthcare, skincare, household, laundry, dishwashing, and haircare sectors. Some of its most recognised brands include Tampax, Head and Shoulders, Vicks, Oral-B, Nicky Clarke, Braun, Ariel, Luvs, and dozens more.
As you’d expect from a non-cyclical company with a strong consumer presence, Procter & Gamble is another example of a firm that has successfully weathered the coronavirus storm. Starting the year at $123 per stock, the shares are worth nearly $140 each as of January 2021. This represents a 17% increase, at a time when many other consumer stocks have been battered by the pandemic.
Another reason we think Proctor & Gamble deserves a spot in your portfolio is that it has increased the size of its dividend payment each and every year for the past 63 years. Right now, the company is offering an attractive 2.3% dividend yield on top of its share price appreciation.
Your capital is at risk.
10. Boohoo – King of the AIM Resumes Upward Momentum
Boohoo is one of the few UK-based companies to make our list of the best shares to buy right now. This online fashion retailer first launched in 2006 and has since grown massively. It is publicly listed on the UK’s secondary exchange – the Alternative Investment Market (AIM) – and carries a market valuation of well over $4 billion. The company is so large relative to most of its peers on the AIM that it’s often referred to as the ‘King of the AIM’.
Nevertheless, it has been somewhat of a rollercoaster journey for Boohoo shares this year. The stock went from 299p in January to a 52-week high of 433p in July – a return of 44% in just a few months. However, a scandal broke at the end of July about the firm’s involvement in slave-like working conditions. As a result, the shares fell precipitously to just 210p in a few weeks.
It now appears that the scandal is just a distant memory for Boohoo investors. The stock is trading at 358p as of January 2021. Just as important, the stock is trending upward and could notch new highs in the coming weeks. With rumours of an impending upgrade to the primary London Stock Exchange, this AIM share could be one for the future.
Your capital is at risk.
Best Platforms to Buy Shares
So now that we have discussed the best shares to buy in 2021 in the UK – you then need to start thinking about which stock broker you wish to use. After all, this is the only way that you are going to be able to buy shares from the comfort of your home. In particular, not only do you need to ensure that your chosen provider offers your preferred share – but you also need to look at fees, commissions, supported payment methods, and regulation.
To help point you in the right direction – below you will find a selection of leading share dealing platforms that allow you to buy the best shares to invest in listed on this page.
1. eToro - World Leading Investment Platform with 0% Commission
eToro is a popular share dealing platform that gives you access to 17 different stock exchanges. On top of the UK and US - this also covers less liquid marketplaces such as those found in Sweden, Spain, and Canada. No matter which region you plan to invest in - eToro is a 100% fee-free brokerage site. This means no share dealing fees, no commissions, and no monthly or annual subscriptions.
Instead, the only fee that you need to be made aware of is a 0.5% FX charge when you make a deposit and a flat withdrawal fee of $5. This is why eToro - which was only launched in 2007 - has since amassed a loyal customer base of over 13 million traders. Many of the traders that use eToro are everyday investors that have little to no knowledge of how the financial markets work. This is because the platform makes it easy to buy and sell shares.
All you need to do is open an account and make a deposit with a debit/credit card or e-wallet - and you can start investing straight away. The platform supports fractional ownership - meaning that you can invest as little as you like as long as you meet a $50 minimum. You will, however, need to deposit at least $200 in order to get started. If you do fall within the remit of an investment 'novice' - it's worth checking out the platform's copy trading tool.
This allows you to copy the trades of an experienced investor. Your portfolio will be weighted based on how much you decide to invest. There are no additional fees to use this feature, albeit, you must invest at least $200 per copy trader. Finally, eToro ensures that you can buy shares in a safe and secure ecosystem. It holds regulatory licenses with the FCA, CySEC, and ASIC - and is also partnered with the FSCS.
- Trade assets commission-free
- Regulated in the UK by FCA
- Social trading tools
- User-friendly trading platform
- 0.5% currency conversion fee on deposits
2. Plus500 - Low Cost CFD Broker
Plus500 offers a great alternative to traditional share purchases - insofar that it allows you to 'trade' CFDs. This means that you will get to speculate on the future price of a share without you needing to own the underlying stock. If you're wondering why this is worth considering - stock CFD trading at Plus500 offers heaps of benefits that you won't find at a traditional brokerage house like Hargreaves Lansdown.
For example, all financial assets at Plus500 can be traded with leverage. This means that you can enter a position worth more than the amount you have in your account. If you're from the UK and trading stock CFDs - leverage of up to 1:5 is offered by Plus500. This does go as high as 1:30 when trading currencies. Nevertheless, Plus500 also allows you to choose from a buy (long) or sell (short) position.
This ensures that you can enter a trade to mirror current market conditions - as opposed to only making gains when the stocks increase. Crucially, this trusted CFD platform does not charge any trading commissions other than the spread. You will also benefit from fee-free deposits and withdrawals, and no monthly/annual maintenance fees. We should also note that Plus500 can be accessed on several devices.
This includes its main desktop website, alongside a native mobile/tablet app that is compatible with iOS and Android. You can get started with Plus500 by meeting a small deposit of £100. You can do this with a standard UK debit/credit card or Paypal if you want to benefit from an instant deposit. Bank transfers are also supported but again - this can take several days. Finally, Plus500 is licensed by the FCA and its parent company is listed on the London Stock Exchange.
- No withdrawal fees
- 0% trading commission
- FCA regulated
- No educational material
3. IG - Established Broker With 17,000+ Markets and ISA Accounts
Although eToro is by far the best share dealing platform to buy UK and international stocks - IG does offer a number of benefits. For example, the platform has one of the most extensive asset libraries. This includes 10,000+ shares, funds, and ETFs - as well as 17,000+ CFD and spread betting market. All in all, you will have access to dozens of exchanges and economies.
Additionally, IG is the best option on the table if you are planning to add your shares to an ISA. This does make sense if you haven't already used your allowance - as you shield the first £20,000 that you invest each year from capital gains tax. What we also like about IG is that the broker gives you access to IPOs. All you need to do is put your name down on the email list - and the platform will let you know when a new listing is imminent.
On the flip side, IG doesn't offer commission-free trading like eToro. Instead, UK shares can be purchased at a commission of £8 per trade - which is payable when you buy and sell stocks. This is reduced to £3 when you buy or sell 3 or more stocks in a single month. If it's US shares that you wish to purchase, commission starts at £10 per trade. But, this can be reduced to £0 when you meet the aforementioned 3-trade minimum.
If you like the sound of this UK brokerage heavyweight, you will need to deposit at least £250 to get set up. The platform allows you to do with with a debit/credit card or bank wire. If opting for a credit card, you will incur a fee of 0.5%-1% - depending on the issuer. Finally, security should be of no concern with IG - as the broker first opened its doors in 1974. And of course - the platform is fully regulated by the FCA.
- Spreads from 0.6 pips
- Supports MT4 trading platform
- Excellent research department
- 1% fee when using Visa and 0.5% via MasterCard
- Spreads on some crypto pairs are somewhat expensive
How to Choose the Right Shares for You
Although this page has ear-marked 10 shares to consider buying right now – you should never invest on the back of somebody else’s personal opinion. After all, the internet is jam-packed with so-called stock market experts – many of whom do not live up to the bold claims that they like to make.
With this in mind, we would strongly suggest that you get comfortable in picking shares on a DIY basis. In doing so, you can be 100% sure that you investing based on in-depth research – as opposed to simply copying somebody else.
Here are 3 things to look out for when searching for the best to shares to buy in the UK.
1. Risk vs Reward
Each and every investment proposition will come with a potential risk and reward. The main concept here is that the more risk you take with an investment, the more you should expect in returns. For example, the risks of investing in US-based biotechnology firm Inovio are very high – as everything is dependent on its phase 2/3 clinical trials.
However, if it’s successful in getting the go-ahead from the FDA – then the upside potential is virtually limitless. At the other end of the spectrum, safe and secure investments like Procter & Gamble and British American Tobacco are often viewed as lower risk – as they operate in non-clinical industries.
In turn, the size of returns that you should expect from these companies should be somewhat modest. All in all, you need to pick shares that mirror your long-term financial goals and tolerance towards risk.
2. Look for Undervalued Companies
Although easier said than done – seasoned investors will look to focus on companies that are undervalued. That is to say, the firm’s current share price is seemingly lower than its intrinsic value. There are many variables that investors will look at to determine whether a stock is under or overvalued, albeit, the price-earnings (P/E) ratio is a great place to start.
This stock market ration will look at the current share price of the company in question – against that of its earnings per share. The ratio is quantified by dividing the former by the latter.
Once you have the P/E ratio to hand, you then need to compare it against the wider markets and more importantly – industry competitors. If you find that the subsequent P/E ratio is lower – it could indicate that the shares are undervalued based on current metrics.
3. Dividends or Growth
It is important to evaluate to ‘type’ of share that you are interested in adding to your portfolio. The reason for this is that some companies are focused on long-term growth, while others are more stable and thus – provide investors with regular dividend payments.
Regarding the latter, these are generally large-cap stocks that have a long-standing track record on their respective sector. For example, the likes of Colgate-Palmolive, 3M, Coca Cola, Johnson & Johnson, Procter & Gamble, and Emerson Electric have each increased the size of their dividend payment for the prior 57 consecutive years.
On the flip side, these companies can only grow by so much before hitting a plateau – so share price gains will be limited. At the other end of the spectrum, younger companies will instead focus on capital gains, while at the time will not pay any dividends. These are known as ‘growth stocks’, with examples including Square, Tesla, and Upwork.
How to Buy the Best Performing Shares on eToro
If you’re ready to start adding some of the buy best shares of 2021 to your stock market portfolio – we are now going to show you have to make a purchase in less than 10 minutes. This includes opening an account with eToro – making an instant deposit, and completing the investment process.
Step 1: Open an Investment Account
Firstly, visit the eToro homepage via your desktop or mobile device and click on the ‘Join Now’ button. This will take you through a simple registration process that requires some personal information and contact details. You will also need to confirm your mobile number by entering the unique SMS code that eToro sends you.
Step 2: Upload ID
eToro requires all account holders to verify their identity – as per FCA regulations. You can do this easily by uploading a copy of the following:
- Valid passport or driver’s license
- Recently issued bank account statement or utility bill
Note: If you don’t have the above documents to hand, eToro still allows you to deposit up to $2,250.
Step 3: Deposit Funds
In order to buy shares at eToro, you first need to make a deposit of at least $200.
You can choose from the following payment methods.
- Debit/credit card
- E-wallets such as Paypal, Skrill, or Neteller
- Bank transfer
We would suggest avoiding a bank transfer if possible – as it can take 2-3 working days for eToro to credit the funds. Debit/credit cards and e-wallets, on the other hand, are instant. Take note, all eToro deposits some with an FX charge of 0.5%.
Step 4: Make a Commission-Free Investment From Just $50
To complete the share purchase process at eToro, you will now need to search for the stock that you wish to buy. In our example, we are looking to buy shares in Tesla. As you can see from the screenshot below – we simply enter ‘Tesla’ into the search box and click on the result that pops up.
After that, you’ll need to click on the blue ‘Trade’ button.
Finally, you need to let eToro know how much you wish to invest – making sure that you meet a $50 minimum. Once you enter the size your investment – click on the ‘Open Trade’ button to complete the commission-free process.
Knowing which shares to buy can be challenging – especially if you are an investment newbie that has little understanding of how to research stocks. With this in mind, this article has outlined the best shares to buy in January 2021.
However, the hand-picked selection of stocks listed on this page are the views of the author – so you should always perform some research of your own prior to taking the plunge.
Nevertheless, if you are ready to create your stock market portfolio today – eToro allows you to do this on a commission-free basis. This is the case for each of its 17 supported UK and international exchanges.
eToro: Best UK Investment Platform with 0% Commission
- Invest in stocks, ETFs and funds with 0% commission
- Wide range of investment options
- Social trading network
- Copy other investors
- Excellent investment app
What are the best shares to buy now?
Different shares will appeal to different investor types - so you need to think about what your long-term financial goals are. For example, if you want to take as little risk as possible - you're going to be better suited for established blue-chip stocks like British American Tobacco and Procter & Gamble. However, if you're looking to target much higher returns - growth shares like Tesla and Square might be more up your street.
Which shares pay the best dividends?
At the time of writing, British American Tobacco is offering one of the best trialling dividend yields of around 8%. This is because on its proposed dividend distribution of near-on £5 billion.
What are the best shares to buy for beginners?
The best shares for beginners are those that carry the least risk and possess proven, long-standing business models. Think along the lines of Coca Cola, Disney, Ford Motors, Nike, and IBM.
What are the best FTSE 100 shares to buy?
The FTSE 100 has had a hard time in 2020 - with the wider index still failing to get back to pre-pandemic levels as of January 2021. With that said, several firms stand out - especially British American Tobacco for its generous dividend yield.
What are the best penny shares?
Penny shares offer a much higher risk/reward spectrum - as these are generally smaller up and coming companies that have a business model that is still unproven. As such, you are best advised to stay away from penny shares as the vast majority fail to make it big.
What are the best AIM shares?
Investors are once again hot on 'King of the Aim' retailer Boohoo - with the shares back on track after its media scandal. For those unaware, it was reported that the firm was behind slave-like conditions - which subsequently resulted in a rapid market selloff. However, Boohoo shares have since recovered these losses and are now reapproaching 52-week highs.
What are the best shares to buy during coronavirus?
Although investors typically flock to blue-chip staple stocks during market uncertainties - it's actually been the tech space that has led the way. The likes of Tesla, Netflix, Amazon, and Square have each performed incredibly well in 2020.