While many fortunes have been made through buy-to-let investing in the past, there may now be better opportunities to make a million elsewhere.
There are a range of potential growth opportunities in emerging markets, for example, while UK-focused stocks could offer wide margins of safety after a challenging Brexit period. Furthermore, a number of defensive industries such as healthcare could deliver high returns over the coming years.
As such, now may be the time to avoid the buy-to-let sector and, instead, invest in the stock market for long-term growth.
Although investing in emerging markets is not a new idea, it could still have significant potential for high returns. Major economies such as China and India continue to grow at a much faster pace than the UK economy, with wages and wealth levels rising at a rapid pace. This could mean companies with exposure to such markets, as well as many other developing economies across the world, are well-placed to generate improving levels of profitability.
With the FTSE 100 including a number of companies with exposure to the emerging world, it’s fairly straightforward for a UK-based investor to gain exposure to them. In fact, the process of doing so is far simpler than undertaking a buy-to-let, and may lead to higher returns in the long run.
While the FTSE 100 and FTSE 250 have delivered impressive gains since the start of the year, a number of UK-focused companies continue to trade on low valuations. Investors appear to be pricing in potential risks from Brexit, with weak consumer confidence and a slowing UK economy potentially impacting on returns over the near term.
Although this may mean there’s a degree of uncertainty ahead in the near term, a number of UK-focused shares may now offer wide margins of safety following their falls in 2018. This could mean they offer good value for money – especially over a long-term period. For investors who are comfortable with volatility in the short run in return for high potential gains in the long run, this could mean there’s an investing opportunity on offer at present.
While share prices have generally moved higher since the turn of the year, investor sentiment could quickly change. Risks such as a potential trade war and political risks in various major economies may cause cyclical stocks to experience a challenging period.
Therefore, defensive shares such as those found in the healthcare industry may offer investment appeal over the long run. They could benefit from the rising world population, as well as an ageing population in various parts of the globe. And with the valuations of a number of FTSE 350 healthcare shares still seemingly appealing, they could deliver higher returns than buy-to-let over the long run. As a result, they could help an investor on their journey towards making a million.
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