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3 simple steps I’d take today to turn £100k into £1m after the FTSE 100’s stock market crash

The FTSE 100’s track record highlights its potential to generate high returns for long-term investors. For example, its historic annualised total return of 8% since inception in January 1984 would mean that it takes around 30 years to turn £100k into £1m.

However, through focusing your capital on undervalued businesses with solid financial positions and dividend growth prospects, it is possible to achieve a higher return. This could improve your portfolio’s growth rate, and increase your chances of making a million.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

FTSE 100 bargains

Buying undervalued FTSE 100 shares could be a means of boosting your total returns. The index has a long track record of experiencing booms and busts, which suggests that buying shares during the latter can be a means of experiencing higher capital growth rates.

At the present time, a wide range of large-cap shares appear to offer good value for money. Investor sentiment towards many sectors, such as resources, financial services and retail, is relatively weak. This situation may persist in the short run due to the ongoing economic difficulties that are likely to continue over the coming months. However, with major stimulus packages having been announced, the long-term outlook for asset prices could be more positive than current valuations suggest.

Financial strength

Of course, buying undervalued FTSE 100 shares is unlikely to make you a million if they do not survive the challenging operating conditions faced in the short run. As such, it is imperative to focus your capital on those businesses that have a high chance of surviving what could be one of the most severe recessions for many years.

Through assessing a company’s balance sheet strength, its cash flow and access to liquidity, it may be possible to build a picture regarding its capacity to emerge from the current crisis in a relatively strong position. Doing so may enable you to buy the companies with the greatest long-term growth potential as the economy recovers.

Diversification

It may be too soon to know which FTSE 100 sectors will deliver the strongest returns over the long run. For example, some sectors may be more deeply affected by coronavirus and the subsequent lockdown than others. This may entail that some companies can return to normality sooner than others, with major business model changes not necessarily required in some industries in response to changing consumer demands.

Therefore, it is prudent to maintain a diverse spread of industries and businesses within your portfolio over the coming years. This strategy may enable you to reduce your reliance on a small number of companies for your returns, while allowing you to access a wider range of businesses from which to generate high returns. As such, it could improve your overall financial prospects and increase your chances of making a million.

A Top Share 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 (yes, despite the pandemic!).

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

But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks!

And here’s the really exciting part…

While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes.

That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021.

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

Peter Stephens 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.