I hold the Coca-Cola bottler in my portfolio for its delicious dividend record. And with some tax relief sitting in my Self-Invested Personal Pension (SIPP), I was thinking of buying more shares. But I decided against it in the end.

The reason? Coca-Cola HBC’s already one of my largest holdings, so I’m looking to buy Coca-Cola Europacific Partners‘ (LSE:CCEP) shares instead. Here’s why.

The twist

Like its FTSE 100 peer, Coca-Cola Europacific Partners bottles the world’s most popular soft drinks. We’re talking about Coke, a brand which is reportedly known to 95% of the world’s population. Other prominent labels include Sprite, Fanta, and in other categories, Monster Energy and Costa Coffee.

This has a number of advantages for dividend investors. Cash flows are robust across the economic cycle, as consumers buy them in huge volumes even during downturns. These labels also enjoy supreme pricing power, allowing these companies to effectively raise prices to maintain or grow profit margins.

But there’s a major difference between these two drinks giants. And it all comes down to the territories in which they operate. HBC makes roughly 70% of net revenues from emerging and developing markets in Europe and Africa.

Meanwhile, Coca-Cola Europacific makes 90% of its revenues from mature European and Australasian markets. The result? Annual earnings growth can be lower, but demand’s more stable, which can be lead to more reliable dividends.

Any other advantages?

There are some other advantages Coca-Cola Europacific enjoys over HBC too. These include:

• Greater scale, being the world’s largest drinks bottler with roughly 600m customers.
• Higher margins, with its operating profit margin rising to 13.4% last year on ongoing productivity improvements.
• Better value for money, with a price-to-earnings growth (PEG) ratio of 0.4 and 2.7% dividend yield.
• Stronger free cash flow, allowing it to pay growing dividends along with regular share buybacks.

But there are also downsides. For instance, regulation is sharper in Europacific’s regions than HBC’s, as illustrated by measures like sugar taxes in parts of Europe. Its markets are also more saturated, meaning Europacific must spend more on marketing to defend its shelf space and fend off rival drinks.

A top FTSE share

There’s more to successful passive income investing than just thinking about dividends. A growing shareholder payout has little benefit if the share price stagnates (or even reverses).

Fortunately, Coca-Cola Europacific — like CCH — has proved an excellent performer on both fronts. It means shareholders have enjoyed a healthy average annual return of 14.4% over the last five years. CCH has also delivered a juicy return, albeit at a slightly lower 12.9%.

I’m optimistic both these FTSE shares will keep delivering a healthy mix of price gains and dividend income. I’ll be looking to add Europacific to my portfolio in the coming days to diversify my portfolio and enjoy those shared benefits.

The post Here’s the FTSE 100 share I’m targeting in May for passive income appeared first on The Twelfth Magpie.

Where the UK stands globally

Each year, the Mercer CFA Institute Global Pension Index ranks systems on adequacy, sustainability and integrity.

In 2025, the UK came 12th with a score of 72.2 – solid, but not world‑beating — while The Netherlands takes the top position, thanks to generous benefits and strong regulation.

• Netherlands (1st): 85.4
• Singapore (4th): 80.8
• Australia (7th): 77.6
• United Kingdom (12th): 72.2
• United States (30th): 61.1

Among the G7 countries, our State Pension is often considered the least generous. UK retirees get only about 22% of average earnings from the state, the lowest in the group.

The upside is that our system scores better on long‑term sustainability because it leans more heavily on workplace and private pensions rather than pushing most of the cost onto the state.

Still, to supplement a State Pension, many people build private savings by investing in the stock market. How does that work?

Retirement investment accounts

For British investors, two popular options are a Stocks and Shares ISA and the Self-Invested Personal Pension (SIPP). Both allow investments in shares, funds and other assets, but they serve slightly different purposes.

With an ISA, money can be withdrawn at any time, and any gains or dividends are tax-free. A SIPP, on the other hand, is designed specifically for retirement. Contributions receive tax relief, but funds are usually locked away until at least age 55 (rising to 57).

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither 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.

In short, ISAs are more flexible, while SIPPs offer upfront tax advantages.

So how can an investor aim for the best outcome?

Building a retirement portfolio

Whether in a SIPP or ISA, stock selection is critcal. A balanced portfolio should include some defensive and income stocks to help reduce volatility.

But steady growth stocks are key to building wealth. One example is Coca-Cola Europacific Partners (LSE: CCEP). As a major distributor of softdrinks across large parts of Europe and beyond, it enjoys steady demand and revenue.

The shares are up 91.8% in five years (equivalent to 13.9% annualised), and it has 39 years of uninterrupted dividend payments. The current yield’s only 2.8% but is well covered by earnings. 

Price-wise, it looks cheap, with a price-to-earnings growth (PEG) ratio of only 0.45. Profitability looks good too, with a return on equity (ROE) of 24.42%.

So to recap:

• Steady earnings resulting in high profitability.
• A fair-to-low price with growth potential.
• Moderate income appeal.

Of course, no investment is risk-free. Consumer demand for soft drinks can fluctuate, and currency movements can affect international earnings. More recently, sugar and health regulations post additional risks.

But overall, consistent demand backed by years of solid performance is why it’s the type of stock worth considering for a retirement portfolio.

The bottom line

Building a decent retirement pot through an ISA or SIPP takes time, patience and regular contributions. Early on, growth matters most, so many people tilt towards quality companies with room to expand. Later, reliable dividends can help turn that pot into a steady income.

By spreading investments across sectors, blending defensive and growth shares, and making regular monthly contributions, the State Pension becomes a helpful safety net – rather than your only lifeline.

The post How the UK State Pension measures up against other countries — and why it’s not enough appeared first on The Twelfth Magpie.

First, let’s look at why equities could plunge in the coming days or weeks. Then I’ll explain how I plan to capitalise on any stock market plunge.

Three reasons to prepare

Share prices can crash for a wide variety of reasons. In the 21st century alone, we’ve seen markets collapse because of slumping internet stocks, a banking sector meltdown, and a global pandemic.

Any of these shocks could cause stock markets to slump once again. However, in my view the three biggest dangers to equity prices today are:

• A prolonged conflict in the Middle East, supercharging oil prices, which damages economic growth and causes central banks to hike interest rates.
• Growing concern over artificial intelligence (AI), including runaway investment on AI by tech stocks, massive disruption to software providers, and soaring joblessness that smashes consumer spending.
• Fears of escalating government debt levels in the US and Europe, which may worsen if interest rates rise.

With many stock valuations still sky high, the chances of a market meltdown are even greater today given these risks. The S&P 500, for instance, remains just below January’s record highs around 7,002 points, even after recent price volatility.

What should investors do?

As I say, I don’t think now is the time to panic. The long-term wealth-building power of the stock market is as strong today as it ever was. Don’t forget, the S&P 500 has overcome many challenges since 1957 to hit those peaks of early 2026. I expect it to reach new highs sooner or later.

That doesn’t mean investors shouldn’t get themselves prepared, though. Despite the risks I’ve described, I don’t believe that a stock market crash is inevitable in the near future. But I am building a large stack of cash to help me buy quality stocks on the cheap if prices do plunge. This could supercharge my returns when the market does eventually recover.

Coca-Cola Europacific Partners (LSE:CCEP) is one stock I’ll be looking to buy on the cheap. Its forward price-to-earnings (P/E) ratio is 19.3 times, well above the FTSE 100 average of 13-14. I reckon this will topple in the event of a market slump.

Why this FTSE 100 share?

This FTSE-listed company bottles the world’s most popular drinks like Coke, Fanta, and Sprite. Even if economic conditions worsen, shoppers should still keep buying them in huge volumes. As we’ve seen, the business can even afford to hike prices in tough times without sales dropping, helping it keep earnings moving.

Fierce industry competition is a major threat here. But I’m confident Coca-Cola’s enormous market, products, and excellent innovation initiatives should keep it in front. It’s just one of several top stocks on my shopping list of shares to buy if the market crashes.

The post 3 reasons why the stock market might crash — and what I’m doing about it… appeared first on The Twelfth Magpie.

To put this into context, a £20,000 investment in a FTSE 100-tracking exchange-traded fund (ETF) would now be worth £25,460, assuming dividend reinvestment.

The question is, can the London stock market’s most illustrious index keep rising? And are index-tracking funds the best option for investors?

Funds vs shares

Accurately predicting the near-term movement of share prices is notoriously difficult. For this reason, I’m happy to pass on guessing where the index might head in 2026!

I am however, very happy to predict where FTSE 100 shares will head over the longer term. And that’s up. History shows that — as economies grow and corporate earnings rise — leading stock indices always rise strongly over time. The Footsie’s recent highs mean it’s risen about 990% from the 1,000 points it began at back in 1984.

Tracker fund investors have enjoyed stunning returns as a result. That’s not all, as spreading their cash across a diversified selection of companies has helped them manage risk. However, investors who purchased individual shares could have made much better gains by building their own mixed portfolios.

Coca-Cola Europacific Partners (LSE:CCEP) is a large-cap stock that’s delivered FTSE 100-beating returns over time. I’m optimistic it’ll continue outperforming the broader index too, making it worth serious consideration.

The real thing

Coca-Cola Europacific bottles and distributes some of the world’s most popular drinks such as Coke, Sprite and Fanta. These remain in high demand at all points of the economic cycle, as the firm’s performance in 2025 showed.

Revenues rose 4.1% at stable exchange rates to a whopping €20.9bn, as both volume and price growth boosted the top line. The business sells its products across 31 European and Asian markets, harnessing the stability that comes with developed markets alongside the enormous growth potential of emerging regions.

In 2025, the firm’s operating profit leapt 7.5% at stable exchange rates to €2.8bn, as both revenues and margins trekked higher. Can Coca-Cola Europacific continue to fizz though? I think so, as it leverages its heavyweight product portfolio to launch new products and capitalise on growing markets.

FTSE 100 beater

With dividends included, the drinks giant’s produced an average annual return of 19.7% over the last five years. By comparison, the iShares FTSE 100 ETF — one of many UK-listed exchange-traded funds that track the Footsie — has delivered a far lower (if still respectable) one of 13.9%.

Coca-Cola Europacific faces risks like substantial market competition and rising costs. It also has to keep innovating to match changing consumer tastes, which can be expensive. Yet on balance, profits will keep rising at an impressive pace. It’s one of numerous top blue-chips I’m optimistic can keep beating the FTSE 100 over the long term.

The post £20,000 invested in FTSE 100 shares a year ago would now be worth… appeared first on The Twelfth Magpie.

Investors don’t just tend to capture superior dividend yields compared with overseas shares. They can also enjoy spectacular payout growth as earnings on many UK blue-chip stocks explode.

Coca-Cola Europacific Partners (LSE:CCEP), Alliance Witan (LSE:ALW), and BAE Systems (LSE:BA.) are three top dividend growth shares I’m considering. Want to know why?

Fizzy growth

Coca-Cola Europacific Partners has tapped strong emerging market growth to boost dividends. They rose 7% in 2024, and City analysts expect similar increases this year and next.

This leaves dividend yields of 2.7% and 3% respectively.

Coca-Cola’s other advantage is brand strength. Demand for its heavyweight labels like Coke remains high across the economic cycle. Exceptional brand power also enables it to effectively raise prices, giving earnings an additional boost.

Combined, they mean the company can be relied upon to consistently increase dividends.

That said, the company isn’t immune to shocks. In 2020, dividends fell as pandemic lockdowns hit drinks sales in pubs and restaurants. But barring some once-in-a-generation catastrophe, I’m expecting the drinks bottler to keep raising dividends for the foreseeable future.

Top trust

Investment trusts like Alliance Witan can be among the most durable dividend stocks out there. By holding a diversified basket of shares, they spread risk across regions and sectors, providing a reliable passive income stream.

This FTSE trust has one of the greatest dividend growth records out there. Cash rewards have risen for 58 straight years.

Alliance Witan’s portfolio today suggests it’s in great shape to keep this record going. It owns 224 shares in total, covering dozens of industries including financial services, information technology, healthcare, and mining.

The dividend for 2025 is tipped to rise 6%, resulting in a 2.2% dividend yield. Be mindful that dividends on equity-based trusts are less predictable than ones that hold fixed-income securities like bonds.

Defence dividends

BAE Systems has one of the best dividend growth records on the FTSE. Not only have they grown consistently each year for over two decades, they’ve also risen at a robust 8% since 2020.

Can they continue at this pace? I’m confident they will, even though high competition and supply chain problems could hamper earnings.

BAE’s market-leading positions mean sales are booming as Western nations rapidly rearm, driving earnings skywards. It’s a trend that’s set to continue — NATO chief Mark Rutte said just this week that members “must be prepared for the scale of war our grandparents and great-grandparents endured” following Russia’s invasion of Ukraine.

City analysts share my bullish take. They expect dividends on BAE Systems shares to rise 8% and 11% in 2025 and 2026 respectively.

This leaves yields of 2.1% and 2.4%.

The post 3 dynamite dividend growth stocks from the FTSE 100! appeared first on The Twelfth Magpie.

If Lloyds Bank research is accurate, a whopping 28m British adults now use the likes of ChatGPT for investing and personal finance advice. It’s a recipe for disaster, in my view.

It’s a view shared by Which?, whose recent research showed “the likes of ChatGPT, Gemini and Meta AI giving inaccurate, unclear and risky advice which could prove costly if followed“.

So what did the self-styled consumer champion find? And should investors using AI for investing purposes be afraid?

Big mistakes

Which? reviewed the three chatbots described above alongside Gemini AI Overview, Microsoft‘s CoPilot, and Perplexity.

More specifically, it asked 40 questions “to establish how well they could answer common consumer questions spanning topics as diverse as personal finance, legal queries, health and diet concerns, consumer rights and travel issues“.

Which? said that it was unclear which sources had been used for some examples, while others (like old forum posts) were “arguably unreliable“. The AI models also displayed “worrying” accuracy issues for money-related queries.

It said that

when Which? placed a deliberate mistake in a question it posed about the ISA allowance, asking “How should I invest my £25k annual ISA allowance?”, both ChatGPT and CoPilot failed to notice that the allowance is in fact only £20,000.

To compound matters, Which? said that “instead of correcting the error, both gave advice which could risk someone oversubscribing to ISAs in breach of HMRC rules“.

Red flags

Like Which?, I’ve myself put ChatGPT through its paces in recent weeks.

Some of its information on stocks and the broader investing landscape has been credible (if hardly groundbreaking). However, some of its statements and share tips have been truly baffling.

A few of its notable errors include labelling high-priced shares like BAE Systems and Centrica as ‘cheap’; describing BP (which has slashed its renewable energy budgets) as an “energy transition” stock; and presenting WPP as a top dividend share.

The latter — which admittedly carries a large 7.6% dividend yield — slashed its interim payout by half in August as revenues tanked. That pick in particular was a major red flag for me.

The human touch

I myself have resisted using ChatGPT to build my own portfolio. It’s an easy option, but one that I’m not to prepared to gamble my financial future on.

I’ll prefer to do things the old fashioned way by doing my own careful research.

One share tip that recently caught my attention was Coca-Cola Europacific Partners (LSE: CCEP). It’s the largest bottler of the world’s most popular soft drink. Yet, it’s a company that ChatGPT has never suggested to me.

It’s a share my Foolish colleague Mark Hartley recently highlighted, noting that “total revenue has almost doubled from £9.62bn in 2020 to £18.51bn this year“.

Coca-Cola’s sales have been boosted by recent acquisitions. Yet, organic sales have also been impressive. In my opinion, they should continue surging given the company’s focus on fast-growing emerging and developing regions.

City analysts share our optimism, and think company earnings will rise 33% and 9% in 2025 and 2026 alone. That’s in spite of rising cost pressures and competition from the likes of Pepsico.

The post Here’s why using ChatGPT to buy UK shares could destroy your wealth… appeared first on The Twelfth Magpie.

Rather than the usual company update, it was a poignant testament to the legendary investor’s enduring principles. It captured Buffett’s philosophy on wealth, leadership and America’s future — delivered with the same penetrating wisdom that has guided billions of investors.

He also used the opportunity to highlight his faith in his successor, Greg Abel. The core message was clear: he’s “going quiet” after stepping down as CEO..

However, he won’t disappear completely. Rather than the exhaustive shareholder letters he’s famous for, he’ll deliver annual Thanksgiving messages.

The ‘greed’ problem

In typical Buffett fashion, his last words were not all tender. He used the letter to deliver a scathing critique of modern corporate excess, warning of a dangerous pattern emerging in American business.

He noted how new disclosure rules designed to embarrass executives into restraint have spectacularly backfired. The warning came days after reports that Tesla CEO Elon Musk had been approved a $1trn pay package.

Describing the growing trend as toxic, he said: “Envy and greed walk hand in hand.”

But while this may be commentary on corporate pay, it applies to the investing world too. A world where too often, excessive greed leads to losses.

So what can investors learn from his legacy?

Taking lessons on greed from a man whose net worth is $147.1bn may seem ironic, but few understand the dangers of excess better than he does.

As one of his most famous quotes goes: “Be fearful when others are greedy and greedy when others are fearful.”

Considering the bloated valuations of many of today’s stocks, being fearful seems appropriate. A good way to take on that advice may be to look for less volatile stocks than Tesla.

Rather, it may to wise to consider one of Buffett’s favourites, Coca-Cola. In the UK, the London-listed Coca-Cola Europacific Partners (LSE: CCEP) is the largest independent Coca-Cola bottler by net revenue.

The £32.74bn company has a Beta score of just 0.7, indicating low volatility. It was listed on the London Stock Exchange (LSE) just before Covid but is already up 150% in five years.

Rapid growth with strong revenue

Since its listing, the company has expanded aggressively. It acquired the Australian bottling company Coca-Cola Amatil in 2021 and a 60% stake in Coca-Cola Beverages Philippines in 2024.

Encouragingly, total revenue has almost doubled from £9.62bn in 2020 to £18.51bn this year. Naturally, with a brand as big as Coca-Cola, that growth is unlikely to lose steam any time soon. 

But strong branding and cash flow aside, it does carry some risks. Notably, around £8.5bn debt against only £7.72bn equity. That leaves it with less flexibility in economic downturns and a risk of financial troubles if earnings decline.

A final farewell

As one of the greatest investors to ever live, Buffett will be greatly missed. But his legacy lives on in his lessons — and now more than ever, investors would be wise to take them to heart.

For investors with a long-term mindset, a stock like Coca-Cola Europacific’s worth considering. In today’s volatile economic environment, it could add stability and defensiveness to a portfolio.

The post Warren Buffett’s written his final farewell. His lessons are his legacy appeared first on The Twelfth Magpie.

Buffett looks for several things in companies to invest in. But one of the most important things is how efficiently a business generates cash – and this is something investors can assess themselves.

Returns on equity

From an investment perspective, a business isn’t just about how much profit it makes. An important part of the equation is how much the company has to invest to generate that cash.

One metric to look at is return on equity, which measures a firm’s profits as a percentage of the difference between its assets and its liabilities. But Buffett’s approach is more nuanced than this.

A high return on equity is a positive sign. But Buffett’s view on this has changed over time to focus more specifically on returns on tangible assets over intangible ones.

Tangible assets are things like equipment, manufacturing facilities, and inventory. Intangible assets are things like technical knowledge, intellectual property, and brands. 

The biggest difference is that tangible assets need maintaining and replacing over time. As such, they represent potential future costs for the business.

This isn’t the case with intangible assets, which is why Buffett has moved towards companies that generate strong returns on tangible assets specifically. And the difference can be quite striking. 

Coca-Cola Europacific Partners

A good illustration of this is Coca-Cola Europacific Partners (LSE:CCEP). The firm produces and distributes Coca-Cola products across Western Europe as well as in Australia and New Zealand.

Officially, the company’s operating income in 2024 was €2.13bn and the firm had €31.3bn in assets. That doesn’t look like a terrific return, but a closer look reveals a different picture.

At the end of 2024, CCEP had €12.1bn in what it calls “indefinite lived intangible assets”. These are essentially the firm’s agreements with the Coca-Cola company (in which Berkshire Hathaway has a huge investment).

CCEP doesn’t have to invest in these in the way it has to maintain its manufacturing facilities. So there’s a case for subtracting these from the firm’s equity base for a more Buffett-like calculation.

This brings the asset base down to around €20bn and takes the return from around 6.8% to 10.7%. And that makes the equation much more attractive for investors.

There’s a lot more to CCEP than this. The strength of the firm’s brands and the risk of GLP-1 drugs weighing on demand are also important considerations for long-term investors to think about. 

Finding stocks to buy

Warren Buffett’s investment in Coca-Cola is well-known. The stock has generated terrific returns for Berkshire Hathaway over the last 35 years.

Berkshire doesn’t own shares in the European bottling franchise. But I think the company provides a great illustration of how the Oracle of Omaha thinks about returns on equity.

The firm is more attractive in this regard than it looks at first sight. Valuable intangible assets make returns on equity seem lower than they might otherwise.

The stock is a newcomer to the FTSE 100 and I think there are better opportunities available at the moment. But strong returns on tangible assets identify it as a quality company and one to watch.

The post Here’s what Warren Buffett looks for in stocks to buy appeared first on The Twelfth Magpie.

One offers market-beating dividend yields, while the other looks dirt-cheap based on expected earnings.

Coca-Cola Europacific Partners

At first glance, Coca-Cola Europacific Partners (LSE:CCEP) shares might not look like anything to shout about value wise.

The drinks bottler’s forward dividend yield is 2.1% healthy rather than spectacular. Meanwhile, a corresponding price-to-earnings (P/E) ratio of 19.5 times suggests it’s not especially cheap based on expected profits, either.

Yet Coca-Cola Europacific’s forward P/E-to-growth (PEG) ratio tells another story. At below 1, this suggests the business is actually undervalued relative to anticipated earnings. City analysts expect the bottom line to grow 31% in 2025.

I’m not surprised by their bullish forecasts given the firm’s recent impressive trading. Latest financials showed organic revenue up 13.8% in 2024.

This is not just thanks to the immense pulling power of brands like Coca-Cola, Sprite, and Fanta, though. Sales are also taking off thanks to the FTSE firm’s vast developing and emerging markets exposure (where last year’s sales leapt 12.7% and 23.3%, respectively).

But like any share, Coca-Cola Europacific isn’t without its risks. The bottling giant could face some near-term turbulence if global trade tariffs impact consumer spending in its territories. Fresh exchange rate voliatility is another potential threat to profits.

But I’m optimistic that its packed portfolio of market-leading drinks, its presence in fast-growing regions (and lack of US exposure), and strong track record of innovation across its brands should protect it from the worst of any turbulence.

Taylor Wimpey

A strong balance sheet has enabled Taylor Wimpey (LSE:TW.) to keep paying market-beating dividends in recent years. And with the UK housing market showing signs of improvement, City analysts are tipping cash rewards to start rising again too following 2024’s dip.

As a result, this year’s dividend yield sits at 8.4%. To put that into context, it’s double the FTSE 100 average of 3.6%.

Falling interest rates have boosted housebuilders’ sales volumes more recently (Taylor Wimpey’s own weekly net private sales rate per outlet between 1 January and 23 February was up 12% year on year, latest financials showed).

Encouragingly, the Bank of England’s tipped to keep slashing rates, too, as consumer price inflation (CPI) drops closer to its target of 2%. Some analysts think interest rates will drop from 4.5% currently to 3.75% by the end of 2025.

Housebuilders are also benefitting from the boost that intense mortgage market competition is giving to borrowers. Barclays, HSBC, and Santander are among big high street banks to cut lending rates below 4% in recent days.

Having said this, a fresh downturn in the housing market isn’t out of the question as the UK economic struggles with low growth. Yet while this could impact Taylor Wimpey’s share price, the firm’s large cash pile — net cash was £564.8m as of December — means that it could still weather a mild downturn and continue paying large dividends.

The post 2 of the best FTSE 100 bargain shares to consider today! appeared first on The Twelfth Magpie.

But investing in the market may be the last thing many are thinking of as global share prices collapse. The FTSE 100 has fallen almost 7% over the past five days, on fears that escalating trade wars will smash the global economy and hammer corporate profitability. On Friday, the Footsie posted its largest one-day drop since the Covid-19 pandemic erupted in 2020.

The stock market correction may have further to go as the full impact of trade tariffs becomes clearer. But this doesn’t necessarily mean I’m planning to sell everything and run for cover.

Indeed, I’ve continued to add to my own portfolio in recent hours.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither 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.

Thinking long term

Investing in shares can be a hair-raising experience at times. Unlike people who hold their money in a Cash ISA, those who invest in a Stocks and Shares ISA can see the value of their portfolio plummet. And that’s never a nice experience.

So during volatile periods like this, it’s important to remember that, over the long term, having stock market exposure is still an excellent way to build wealth. That’s even after accounting for the sort of market downturns we’re currently seeing.

Take the FTSE 100, for instance. During the last 40 years, it’s soared 527.7% in value, providing a solid average annual return of 7.7%. That’s a better return than most other asset classes in that time, and especially that of low-yielding Cash ISAs.

In that time, it’s faced a plethora of crises, like a run on the pound, foreign wars, a banking sector meltdown, a eurozone debt crisis, Brexit, a pandemic, and more recently, the introduction of those thumping trade tariffs. And yet the FTSE’s still proved highly resilient.

Past performance isn’t always a reliable guide to future returns. But I’m confident that major stock indexes like this will continue to rise over the long term.

A top ISA buy?

As I say, I’ve continued to buy for my own portfolio in recent days. Stock markets are packed with brilliant bargains following recent weakness. Even companies in highly resilient sectors have plummeted amid the panic, proving excellent buying opportunities.

Coca-Cola Europacific Partners (LSE:CCEP) is a rock-solid share I’m considering buying soon. It trades on a forward price-to-earnings-to-growth (PEG) ratio of just 0.5.

Any reading below 1 indicates that a share is undervalued.

As a major global company, it won’t be immune to the impact of acclerating trade tariffs. Consumer spending may be affected in European and Asian markets, while production costs could also rise.

But on balance I expect earnings to remain broadly resilient. Its lack of exposure to the US, combined with the star power of brands like Coke, should see it hold up well. And over the long term, I expect it to deliver exceptional returns, driven by its substantial emerging market exposure and continuing innovation across its drinks ranges.

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