When Bitcoin recently broke through the $10,000 mark, investor interest spiked, and the get-rich-quick crew piled in. I hope you didn’t buy at the recent high of around $10,600, because now it’s back down to $9,000. And tomorrow, it could be anywhere. Cryto-currencies are too volatile to be treated as a serious investment, in my view.
Similarly, the National Lottery also sells dreams of overnight wealth, but hitting the jackpot will only ever become a reality for a tiny few.
To make a serious attempt at building long-term wealth, I’d recommend investing in a Stocks and Shares ISA instead. Share prices are also volatile, as we’ve seen this week, but history shows that, in the long term, equities beat almost every other investment.
I’m a long-standing fan of investment trusts, and the two I’m tipping here have grown nearly 600% over the last decade, turning a £10,000 investment into £70,000. They’re worth a closer look and could help you win financial freedom.
Baillie Gifford Shin Nippon
Whenever I look at the Japanese smaller companies sector, it always seems to be generating outsize returns, and Baillie Gifford Shin Nippon (LSE: BGS) has grown a quite stunning 640% in the last decade, according to the Association of Investment Companies.
Manager Praveen Kumar aims to deliver long-term capital growth from a spread of between 40 and 80 attractively-valued smaller companies he believes offer good growth opportunities.
Unlike many smaller companies funds, it also boasts a low ongoing charging figure, just 0.77% a year and, despite its success, still trades at a tempting discount of 8.6% to net asset value. If you want to add some exciting diversification to your portfolio, this growth-focused Japanese trust looks like an exciting way to achieve it.
Allianz Technology Trust (LSE: ATT) has also had a storming decade, rising 599% in that time, again, purely from capital growth, as it doesn’t pay a dividend.
This trust invests primarily in large US companies, with tech giants Amazon, Microsoft, Tesla and Apple all featuring in its top 10 holdings, alongside some familiar names such as MasterCard.
Naturally, Allianz Technology has benefited from having direct exposure to the world’s most high-profile sector so, before diving in, you should check where you stand on its future prospects.
Do you believe the tech boom is played out, or could it have further to run? Nobody can say for sure, as the tech giants could face regulatory threats, or simply become too unwieldy. Despite that, big tech is generating huge sums from selling global products and services that people crave, and there’s little sign of that changing yet.
Check how much exposure you have to this sector already, as well as the US stock market in general, because 85% of this fund is invested Stateside.
I’d put my money on either of these two investment trust winners or, better still, split my cash between them, rather than have a hopeful punt on Bitcoin or the Lotto.
Harvey Jones 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.