Today’s world is increasingly captivated by the allure of cryptocurrencies. It’s perhaps no surprise considering the price of Bitcoin has skyrocketed by 77% since the beginning of 2023.
Nonetheless, today’s price of around £24,355 is still well below the all-time high of £48,005 achieved back in November 2021. As such, some might argue that now presents a prime opportunity to invest in the cryptocurrency before another bullish surge.
But I’m not convinced. In fact, I think a superior path to serious wealth accumulation over the long term lies within the familiar realm of buying high-quality UK stocks.
Bitcoin is a risky asset
Don’t get me wrong, there may be a place for cryptocurrencies like Bitcoin as part of a well-diversified portfolio. However, when it comes to the core of an investment strategy, I think having a large allocation to Bitcoin is very unwise.
After all, cryptocurrencies are notoriously volatile, making them a risky venture. By contrast, the stock market has a track record of relative stability and growth.
Generally speaking, stocks have shown resilience over time, weathering various economic storms. They represent tangible ownership in companies that produce actual goods and services, generating revenue and profits.
So while stocks also experience fluctuations, they tend to follow a general upward trajectory over the long term. That’s why when it comes to aiming for substantial growth and wealth preservation in the long run, I find the potential of UK shares far more appealing.
High-quality UK shares
In my view, the FTSE 350 is packed with companies that represent compelling investment opportunities. Many have solid fundamentals, strong market positions, and a history of generating substantial revenues and profits.
For example, take multinational consumer goods company Unilever, or global leader in alcoholic beverages Diageo. Both firms enjoy rock-solid market positions and have a long history of generating revenues and profits.
Moreover, some companies boast attractive dividend yields. And holding these stocks could allow me to benefit from regular dividend payments, providing a steady income stream.
Reinvesting these dividends can significantly enhance the compounding effect over time. In turn, this enables my relatively insubstantial pot to grow into a large sum of money.
Targeting high returns
All things considered, while cryptocurrencies may offer the potential for quick gains, they lack the stability and historical performance of the stock market.
With this in mind, when it comes to aiming for consistently high returns, I’d opt to construct a diversified portfolio primarily consisting of shares in well-established and high-quality UK companies such as Unilever and Diageo.
In doing so, I’d also be aligning my approach with the proven strategy of many successful long-term investors like Warren Buffett. And ultimately, by allowing my investments to grow steadily over the years and weather short-term market fluctuations, I’ll increase my likelihood of achieving bumper returns over time.
The post Forget Bitcoin, I’d load up on UK stocks to target high returns instead appeared first on The Motley Fool UK.
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Matthew Dumigan has no position in any of the shares mentioned. The Motley Fool UK has recommended Diageo Plc and Unilever Plc. 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.
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