I’m aiming for a million buying unexciting shares!

By investing regularly in long-established, proven and even rather dull businesses, this writer plans to aim for a million. Here’s his game plan!

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Midnight is celebrated along the River Thames in London with a spectacular and colourful firework display.

Image source: Getty Images

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.

Read More

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. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

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.

Is it realistic to dream of becoming a stock market millionaire? Even starting with zero, I think it is credible to aim for a million, although I think that takes a long-term approach to the stock market and also money to invest.

But what is the right approach?

Some people aim to find the ‘next big thing’ and hope that they will stumble on a Tesla or Nvidia before the share price soars.

Should you invest £1,000 in Aviva right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Aviva made the list?

See the 6 stocks

But if finding the next big thing was easy, the army of well-paid professionals who aim to do just that would be finding it with more regularity than they do! For every promising company that turns into an incredible success, there are lots that fall by the wayside.

So, how am I aiming for a million?

I am not looking for new companies. I am not focusing on emerging sectors of the economy. I am not necessarily even looking for big growth prospects.

Instead I am looking for ‘unexciting’ companies that tick over quietly year after year, churning out profits.

Doing the maths

What does it take to aim for a million?

Imagine I invested £800 every month and was able to grow it at a compound annual rate of 12%.

After 23 years I would have a portfolio worth over £1m.

Yes, 23 years is a long time. But I am a long-term investor – and for £800 a month, I think seven figures in that timeframe is a solid return!

How to earn 12% per year over the long run

A return of 12% might not sound like a lot to aim for. But remember – that is a compound annual growth rate, meaning it includes the bad years as well as the good ones.

This is where I think focussing on solid, long-term performers in the stock market can really pay off.

Take Ashtead Group (LSE: AHT) as an example.

Over the past year, the Ashtead share price has soared 33%. That is not a one-off: its long-term performance is also impressive. Over five years the growth has been 170%.

Created with Highcharts 11.4.3Ashtead Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

On top of that, the dividend yield is 1.3%. Small beer, perhaps, but compound annual growth includes dividend income as well as share price movement. Also, if I had bought at the lower price five yeas ago, I would currently be earning a markedly higher yield of 3.5%.

Does that mean I ought to buy the FTSE 100 rental firm for my portfolio now?

Not necessarily.

I do still like its industry focus, as I expect construction firms will need to keep renting equipment in years to come, though I do see a risk that a weaker economy could hurt demand. I also like Ashtead’s US business as it gives it big economies of scale. Plus its business strategy, which has performed so well, continues to impress me.

But after that leap in the Ashtead share price, the valuation attracts me less. I find the company’s price-to-earnings ratio of 22 too rich for my appetite.

But, as I aim for a million, I am looking for similarly unexciting, well-established, and proven businesses — but at a more exciting valuation!

But what does the head of The Motley Fool’s investing team think?

Should you invest £1,000 in Aviva right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Aviva made the list?

See the 6 stocks

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.

C Ruane has no position in any of the shares mentioned. The Motley Fool UK has recommended Ashtead Group Plc, Nvidia, and Tesla. 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.

More on Investing Articles

Stack of British pound coins falling on list of share prices
Investing Articles

Why hasn’t its 9.9% yield boosted the Phoenix share price?

Phoenix Group has a dividend close to double digits, but saw a weak share price performance in recent years. Christopher…

Read more »

Silhouette of a bull standing on top of a landscape with the sun setting behind it
Investing Articles

With average 10% yields, these mid-cap FTSE shares could supercharge a passive income portfolio

Some of the best passive income gems can be found on the UK's smaller indexes like the FTSE 250 and…

Read more »

A coin being dropped into a piggy bank
Investing Articles

As the Barclays share price tanks 19% in 2 days, is this a great buying opportunity?

As a trade war sends the Barclays share price into a tailspin, Andrew Mackie steps back to look at the…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

Is Fundsmith Equity still a good choice for a Stocks and Shares ISA in 2025?

Many Britons hold the Fundsmith Equity fund in their Stocks and Shares ISAs. Is this still a good move? Edward…

Read more »

Investing Articles

Nvidia stock is down 24% this year. Time to buy the dip?

Christopher Ruane has been eyeing Nvidia stock as a potential addition to his portfolio for a while. Is a recent…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Down 25% since January, this resilient dividend stock’s catching my eye

Maintaining the UK’s rail, water, and energy infrastructure isn’t the most exciting business. But it has made this a solid…

Read more »

Investing Articles

Prediction: Unilever to outperform the FTSE 100 over the next 12 months

The FTSE 100 has made a strong start to 2025, but Stephen Wright thinks a popular dividend stock could be…

Read more »

Investing Articles

I just bought this legendary S&P 500 tech stock for my ISA, 27% off its highs

This S&P 500 stock has tanked over the last month and Edward Sheldon has snapped it up for his portfolio…

Read more »