The Motley Fool

Forget the Bitcoin price. I think FTSE 250 stocks offer a safer strategy to make £1m

If you’d invested even a small sum of money in Bitcoin when it first became available, you’d have a vast wealth right now. However, the same thing could be said for a wide range of investments, including those found in the FTSE 250.

Looking ahead, the mid-cap index could offer a strong rate of growth in the coming years. It also provides investors with the chance to diversify to reduce their overall risk.

Claim your FREE copy of The Motley Fool’s Bear Market Survival Guide.

Global stock markets may be reeling from the coronavirus, but you don’t have to face this down market alone. Help yourself to a FREE copy of The Motley Fool’s Bear Market Survival Guide and discover the five steps you can take right now to try and bolster your portfolio… including how you can aim to turn today’s market uncertainty to your advantage. Click here to claim your FREE copy now!

As such, it appears to offer a superior risk/reward opportunity compared to Bitcoin, and may be a better means of building a £1m+ portfolio.

Return prospects

Since the FTSE 250 generates around half of its income from the UK economy, its near-term prospects appear to be relatively uncertain. Brexit may have taken place, but investors could soon turn their attention to the transition period and the prospects for trade deals with the EU, US and other major economies.

This may cause a degree of uncertainty in the minds of investors, and could prolong the trend of the past few years where UK-focused stocks have been relatively undervalued. This, though, may present buying opportunities for long-term investors.

With the UK economy forecast to grow at a faster pace in 2020 than in 2019, and with economic data such as employment levels and inflation relatively favourable, UK shares could deliver higher earnings growth than investors are currently pricing in.

Furthermore, the FTSE 250 has a strong track record of growth despite facing numerous challenges in its history. It has recorded an annualised total return of 9% over the past 20 years. When compounded over the long run, this can produce significant returns that may lead to a seven-figure portfolio.


Investing in the FTSE 250 enables an investor to diversify away company-specific risk. This is the threat of one company’s poor performance impacting negatively on the wider portfolio. Although the potential for a downturn in the wider stock market still remains from having investments in the mid-cap index, the track record of the FTSE 250 shows it has always recovered from its downturns to post new record highs.

The risks involved in buying Bitcoin could prove to be significantly higher than those of the FTSE 250. Diversification isn’t possible when it comes to buying the virtual currency, while its limited size and regulatory challenges may mean that it fails to ultimately replace traditional currencies. This could hurt investor sentiment, which may lead to a disappointing price performance in the coming years.

Furthermore, with Bitcoin impossible to accurately value, investors may be better off buying undervalued FTSE 250 shares at present. They could enjoy a wider margin of safety and, when combined with the past performance of the index, could mean you have a better chance of generating a £1m portfolio over the long run.

A top stock with enormous growth potential

Savvy investors like you won’t want to miss out on this timely opportunity…

Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business.

Not only does this company enjoy a dominant market-leading position…

But its capital-light, highly scalable business model has been helping it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 alone it returned a whopping £151.1m to shareholders in dividends and buybacks!

And here’s the really exciting part…

We think now could be the perfect time for you to start building your own stake in this exceptional business—especially given the two potentially lucrative expansion opportunities on the horizon that our analyst has highlighted.

Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Stock… free of charge!

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.