Forget Bitcoin and Ethereum, I'd buy UK stocks to turn £10k into a … – Motley Fool UK

0

If I wanted to turn £10k into £100k, I would veer away from cryptocurrencies like Bitcoin and Ethereum and towards world-class UK stocks.
image source: Getty Images
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.
If I wanted to increase my money tenfold, I’d buy UK stocks long before I touched cryptocurrencies. 
I do see the appeal of cryptos like Bitcoin and Ethereum. Both coins have multiplied investments rapidly in the past. If I wanted to turn £10k of savings into a £100k nest egg then it makes sense that they might be the best investment choice I have.
But UK stocks have multiplied cash tenfold too. Some of them in only a few years as well. And I can target these monster returns without the same overarching problems that plague an investment in cryptocurrencies. Here’s how.
I first cottoned onto Bitcoin when it was $2,000 a coin. Since then, the price has risen as high as $70,000. That’s a 35 times return in only a few years, so I could be kicking myself for not throwing in all my savings at that point. 
Ethereum was similar. I discovered it when when the price was $200 a coin before it jumped up to $3,400 for a 17 times return. Another big winner thrown away? No, that’s not the way I’m looking at it. 
The coins are worth more because more people want to buy them. More demand means a higher price. But the demand here came from speculation, people buying the coins because they thought they might get rich. 
And that’s the point. Where is the future demand for these coins coming from? Is it likely that 10 times more people will buy Bitcoin to make the price go up 10 times higher? I don’t see it. 
The demand will increase if and when cryptocurrencies have a practical, mainstream use. Is my local supermarket going to let me pay with Bitcoin any time soon? It doesn’t seem likely, so I don’t see a future where demand for Bitcoin rises massively. 
Now, Ethereum is down 60% from that high and Bitcoin is down 70%. Even the worst stock market crashes aren’t that bad.
And the the thing with stocks is they actually do something. UK stocks make cash and lots of it.  If I’m standing in my supermarket cursing that they don’t accept my crypto, I might at least admire the business model and products they sell. Well, I can go home right then and there and buy the shares, each one giving me a portion of the profits it makes selling groceries. 
That money could be paid directly to me as a dividend or indirectly through a share buyback. The cash could be spent paying down debt, investing in growth or various other ways to increase the value of the company, and of course, make my shares worth even more. This kind of business growth is why FTSE 250 shares have gone up around 20 times in value over the last 30 years. 
I will say that UK stocks aren’t likely to have rapid returns and can drop in value too. My target is to turn £10k into £100k and that will take probably decades. I don’t mind though. Slow, boring-but-effective wealth generation. That sounds just dandy to me.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.
John Fieldsend has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
| James Beard
The Lloyds share price has struggled lately to get above 50p. Our writer asks whether it will reach £1 again,…
Read more »
| Jon Smith
Jon Smith spots a dividend stock that enjoyed a rising yield over the past year, but flags up a steep…
Read more »
| Edward Sheldon, CFA
The National Grid share price has fallen nearly 20% since mid-May. Ed Sheldon looks at what’s driving the weakness and…
Read more »
| Royston Wild
I’m hoping to have spare cash to invest in UK shares soon. And I’m thinking about buying the following stocks…
Read more »
| Royston Wild
A low P/E ratio and high dividend yield make Aviva shares a brilliant bargain. But these aren’t the only reasons…
Read more »
| Royston Wild
The FTSE index is packed with brilliant bargains following heavy volatility in 2023. Are these two popular UK stocks currently…
Read more »
| The Motley Fool Staff
We asked our writers to share their best AIM-listed stocks to buy in October, featuring three very different businesses!
Read more »
| Sumayya Mansoor
Our writer is looking for stocks to add to her self-invested personal pension and identifies two UK stocks she likes…
Read more »
View All
When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in. Tax treatment depends on your individual circumstances and may be subject to future change. The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice.
To make the world Smarter, Happier, And Richer
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show and premium investing services.
Read more about us >

We have taken reasonable steps to ensure that any information provided by The Motley Fool Ltd, is accurate at the time of publishing. Any opinions expressed are the opinions of the authors only. The content provided has not taken into account the particular circumstances of any specific individual or group of individuals and does not constitute personal advice or a personal recommendation. No content should be relied upon as constituting personal advice or a personal recommendation, when making your decisions. If you require any personal advice or recommendations, please speak to an independent qualified financial adviser. No liability is accepted by the author, The Motley Fool Ltd or Richdale Brokers and Financial Services Ltd for any loss or detriment experienced by any individual from any decision, whether consequent to, or in any way related to the content provided by The Motley Fool Ltd; the provision of which is an unregulated activity.
The value of stocks, shares and any dividend income may fall as well as rise and is not guaranteed, so you may get back less than you invested. You should not invest any money you cannot afford to lose, and you should not rely on any dividend income to meet your living expenses. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, administrative costs, withholding taxes and different accounting and reporting standards. They may have other tax implications, and may not provide the same, or any, regulatory protection. Exchange rate charges may adversely affect the value of shares in sterling terms, and you could lose money in sterling even if the stock price rises in the currency of origin. Any performance statistics that do not adjust for exchange rate changes are likely to result in an inaccurate portrayal of real returns for sterling-based investors.
Fool and The Motley Fool are both trading names of The Motley Fool Ltd. The Motley Fool Ltd is an appointed representative of Richdale Brokers & Financial Services Ltd who are authorised and regulated by the Financial Conduct Authority (FCA) (FRN: 422737). We publish information, opinion and commentary about consumer credit products, loans, mortgages, insurance, savings and investment products and services, including those of our affiliate partners.
The Motley Fool Ltd. Registered Office: 5 New Street Square, London EC4A 3TW. | Registered in England & Wales. Company No: 3736872. VAT Number: 188035783.
© 1998 – 2023 The Motley Fool. All rights reserved. The Motley Fool, Fool, and the Fool logo are registered trademarks of The Motley Fool Holdings Inc.

source

Leave a Reply

Your email address will not be published. Required fields are marked *