Forget Bitcoin! I’d buy cheap FTSE 250 shares to make a million

first_img Enter Your Email Address Rupert Hargreaves 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. The recent stock market crash may have pushed some investors to own alternative assets such as Bitcoin rather than FTSE 250 stocks. However, despite the short term appeal of assets like Bitcoin, their long term prospects are far from certain. Indeed, due to the way Bitcoin is structured, it is almost impossible to predict how much the cryptocurrency is really worth. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Bitcoin vs the FTSE 250The price of Bitcoin is determined by supply and demand. If there are more buyers than sellers in the market, the price will go up. If there are more sellers than buyers, the price will fall. The same is true for FTSE 250 stocks, to some extent, although there is one key difference. Their underlying businesses underpin the value of FTSE 250 shares. These firms have a fundamental value, which is relatively straightforward to calculate. It is impossible to do the same for Bitcoin. For example, as FTSE 250 firms earn income from their operations. It’s quite straightforward to place a multiple on this income to arrive at an estimate of intrinsic value for the company. Bitcoin does not produce any income. Therefore, we can’t value the crypto-asset based on its profitability. Long term prospectsThe long term prospects for FTSE 250 stocks are also more attractive than cryptocurrency.Cryptocurrency has been around for quite a few years, but as of yet, it is not widely used as a currency. Regulatory demands and illegal activity have hamstrung its adoption. What’s more, there’s no guarantee it will ever replace traditional money. Regulators could even decide to ban it if it becomes the go-to currency for criminals. On the other hand, stocks and shares have been around for hundreds of years. They are a tried and tested way of creating and building wealth. The FTSE 250 has only been in existence for three-and-a-half decades, but during this time it has produced an average annual return for investors of 12%. At this rate of return, it would take six years to double your money. An investment of £100,000 would grow to be worth £1m within 20 years. Steady growthWhile it is impossible to tell what the future holds for stocks, there is a high chance investors will continue to see similar returns going forward. Company earnings should grow in line with inflation over the long term. This should help support share price growth of around 3% per annum.Including dividends paid to investors, as well as any other form of shareholder return and technological advantages, which may lead to improved profit margins, it is not unrealistic to suggest that company earnings could grow in the 5% to 10% range for the foreseeable future. That’s why FTSE 250 stocks are likely to be a better investment than Bitcoin over the long term. As such, buying a basket of these companies could help you grow your financial nest substantially in the years ahead. Forget Bitcoin! I’d buy cheap FTSE 250 shares to make a million Simply click below to discover how you can take advantage of this. See all posts by Rupert Hargreaves Image source: Getty Images Rupert Hargreaves | Sunday, 28th June, 2020 | More on: ^FTMC center_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Our 6 ‘Best Buys Now’ Shares I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! “This Stock Could Be Like Buying Amazon in 1997”last_img

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