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Stock markets were on a roller-coaster ride in 2022. During this time I have tried to capitalize on the volatility by buying beat-down shares for my Stocks and Shares ISA.
Buying on dips is a favorite tactic of successful investors like Warren Buffett. By following his wealth-building strategies I hope to have significantly increased my long-term returns. These are the two UK shares (in no particular order) I’ve invested in so far this year.
1. Rio Tinto
I’ve been looking for ways to capitalize on the next commodities supercycle for a while. So over the summer I exploited severe price weakness Rio Tinto (LSE:RIO) to start building a position.
This FTSE 100 The business is one of the world’s largest miners. Unlike small-cap commodity producers, it has the financial strength to weather any market downturn. A strong balance sheet also gives it the opportunity to supercharge earnings growth through mine expansion and acquisitions.
Rio Tinto produces a wide range of metals and other raw materials. These include iron ore, copper, aluminum, lithium, borates and salt. This broad portfolio protects the group’s profits from weakness in one or two of these markets. It also offers many white-hot infrastructure opportunities to the company.
For example, increasing demand for electric vehicles and consumer electronics is likely to increase demand for copper. Iron ore consumption should increase due to increased urbanization in emerging markets. And sales of borates should benefit from increased fertilizer production.
An increase in supply may pose a risk to the prices of certain commodities. And this could hurt profits at Rio Tinto.
Brazilian iron ore miner wellFor instance, it plans to increase production steadily over this decade to over 360m tonnes in 2030. That would be more than 50m above this year’s expected level.
That said, I still believe that the potential benefits of investing in Rio Tinto outweigh this risk.
2. Games Workshop Group
Buying retail stocks during a cost-of-living crisis can be risky business. But I believe that the miniature wargaming business Games Workshop (LSE:GAW) may continue to trade strongly. This is why I bought it for my ISA.
Niche retailer products often outperform the broader market during recessions. This particular model is the market leader in manufacturing and selling game systems. This is a market that commands a large and loyal following.
its Warhammer 40,000 And Warhammer: Age of Sigmar Lines sets the standard when it comes to tabletop gaming. And sales here look set to grow strongly in the long term as the business expands internationally.
Games Workshop this week forecast headline revenue growth of £18.5m, to £210m in the six months to November. This underlines the strength of its market and the rewards of its push into new markets.
I am also excited by the firm’s efforts to promote the licensing of its intellectual property to mass media such as video games. This could supercharge royalty income and give a big boost to interest in his miniatures and other fantasy products.
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