Buying shares? Read this to find out which are gaining from the weak pound…
I’m thinking of investing in shares this year even though I have never done so before. The pounds fall against the dollar has left companies reaping rewards and there could be further profits as the trend continues.
Investors are benefitting from a number of ways since sterling lost 7pc against the dollar in January. Of all dividends paid to FTSE companies, 42pc are paid in dollars. This means an income boost for British blue chips and a benefit for UK equity income funds.
I expect the pound to be under pressure for some time as the bank of England continues to try to stimulate recovery through low rates and ‘money printing’ quantitative easing. This in effect weakens the demand for the currency which then falls in value.
My advice is to invest in established, shareholder focused, dividend paying companies. Royal Dutch Shell and GlaxoSmithKline are two to consider.
Also in my favourites list are BP and British American Tobacco. Both are global firms where the dividend is paid in dollars.
If you want to invest in a less common name, try Spirax-Sarco engineering, Spectris and Halma – all members of the FTSE 250.
Now’s the time to buy shares – and I’m jumping in with both feet.