Are you looking for the best place to invest £10,000? Building a cash position may seem like a safe and sensible solution in troubled times, but it offers no growth potential. Particularly when interest rates are close to zero.
Is Bitcoin a good investment?
The allure of Cryptocurrencies when the world is in chaos is understandable but highly debatable. Cryptocurrencies have been around for over 10 years and have come a long way since a Bitcoin cost £10. There are now too many to choose from and they are far from mainstream. One of the driving forces behind their implementation was to create a coin of the people in a decentralised network with a transparent set of rules. A reason it has achieved popularity is the ability to make purchases anonymously. However, I struggle to grasp how total anonymity can be guaranteed if you are paying for your Bitcoin with your own credit or bank card. Yes, you could buy a prepaid card and use that, but it is a convoluted process to go through. Buying cryptocurrencies is more complex than opening a traditional bank account or a Stocks and Shares ISA. If you want to liquidate back into cash, it is not a quick and easy process. And Bitcoin has also seen crazy price volatility, which makes it risky.
Value investing for the win
Billionaire investor Warren Buffett is a big advocate of value investing. It is how he has compounded his considerable wealth over several decades, as have many of his followers. The premise of it is to buy stocks at a price lower than their intrinsic value. Choosing stocks in this way can be difficult because if a stock is undervalued, it often has issues that make it look a risky buy. However, given the uncertainty surrounding global financial markets today, this means many stocks have fallen to create value investments that could be worth it for the long term.
The future is electric
A FTSE 100 stock I like the look of today is SSE (LSE:SSE). It has a dividend yield of over 8%, a price-to-earnings ratio of 8 and earnings per share are £1.38. Fundamentals like that are what Warren Buffett would consider a value investment.
It is focused on growing in the renewables space and has been making significant moves to do so. Its profits on revenue for 2019 were £1.7bn, and it is heavily invested in building renewables infrastructure. Renewables are undeniably in vogue and set to become even more so as climate change concerns grow. The government must reach a net zero carbon target by 2050 and to do so it will need the help of big players in the renewables area. SSE should be one of them, I feel.
I think the FTSE 100 offers many bargain stocks right now. These could bring you much better long-term wealth generation opportunities than cash or cryptocurrencies. If you have a lump sum to invest, I think the FTSE 100 is the best place to invest £10,000 today. It would be a shame to miss out.
Kirsteen 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.