2 shares I’d buy to try and double my money in 10 years

Stephen Wright thinks there are still opportunities to to buy UK shares that can double in value over the next decade – but time might be running out.

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BUY AND HOLD spelled in letters on top of a pile of books. Alongside is a piggy bank in glasses. Buy and hold is a popular long term stock and shares strategy.

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I think right now’s a great time to buy shares. Interest rates look set to fall this year and I expect this to send share prices higher. 

As a result, I’m looking to make the most of opportunities while they’re still there. And that applies to dividend shares as well as growth stocks.

100% returns

Doubling an investment over 10 years implies an average return of 7% a year. That’s slightly above the long-term average for the FTSE 100.

At the moment, I’m optimistic this is a realistic possibility. With interest rates still at their highest levels for over a decade, I think share prices are conducive to higher long-term returns.

That’s not going to be the case indefinitely. Interest rates look likely to fall this year and when they do, I’m expecting share prices to go higher, making buying less attractive.

To some extent, I think the market’s pricing this in already. So I’m looking to get investing while there are still opportunities that look attractive to me. 

A high-yield Dividend Aristocrat

One candidate is Primary Health Properties (LSE:PHP). The FTSE 250 real estate investment trust (REIT) comes with a 6.65% dividend yield and a strong track record.

During the last decade, the company’s increased its dividend by around 3.5% annually. If that continues, anyone who buys the stock today will average over 7% a year over the next 10 years.

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.

The risk of unpaid rent is low for a landlord whose main tenant is the NHS. But investors should be more cautious about the company’s debt profile with interest rates at elevated levels.

This brings a risk of shareholder dilution and a possibility of a dividend cut. But as long as this doesn’t get too far out of hand, I think shareholders should do well.

A tech monopoly

If I’d bought shares in FTSE 100 property platform Rightmove (LSE:RMV) a decade ago, I’d have an investment worth more than twice what I paid for it. Could the stock do the same again?

I think so – the company’s low capital requirements allow for significant share buybacks to boost growth. Over the last decade, earnings per share have gone from 10p to 24p.

Rightmove has a dominant market position, but this might be under threat from US rival Costar Group. The company has acquired OnTheMarket to compete in the UK property sector.

That’s a risk shareholders should be aware of, but Rightmove’s entrenched position means it’ll be hard to displace. As a result, I think it has a decent chance to double again in a decade.

Growth

There’s more than one way to aim for a 7% annual return over a decade. It can either be from a company that distributes its cash, or one that retains and reinvests it. 

Either way, the key is growth. Most stocks don’t offer a return that will allow them to double in value in 10 years immediately – but working out which companies will grow enough to do this is crucial.

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.

Stephen Wright has positions in Primary Health Properties Plc. The Motley Fool UK has recommended CoStar Group, Primary Health Properties Plc, and Rightmove 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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