As stock investors, we all harbour dreams of making a fortune with our hard-earned cash. The more ambitious of us even have plans of becoming stock market millionaires. It’s a goal that very few of us actually realise, though. But it needn’t be that way. In fact the stock market crash of early 2020 has significantly boosted all our chances of getting seriously rich with UK shares.
If you want to make better returns that the broader market you need to think differently than everyone else. Right now that means buying UK shares for your investment portfolio while Mr. Market sits twiddling his thumbs amid the ongoing Covid-19 crisis.
Following the form of the FTSE 100!
I’ve not been put off from buying UK shares despite the coronavirus catastrophe and other worries like Brexit and ongoing trade wars. I buy stocks with a view to holding them for a minimum of 10 years. History shows us that this sort of time horizon allows quality stocks to recover from periods of extreme weakness like we’ve seen in 2020 and deliver significant shareholder returns.
Take the performance of the FTSE 100 as an example. Britain’s leading share index has delivered an average annual return of 8% since its inception in the mid 1980s. This is despite the global economy – and as a consequence the profits of major multinational blue chips – facing serious challenges in that time.
Significant political upheaval in Russia in the late 1990s; the World Trade Centre bombings and the dotcom bubble bursting at the start of the 2000s; the banking crisis of 2008–09 and the subsequent European sovereign debt crisis; the Chinese stock market crash of 2018… These are just a few of the troubles to have plagued the FTSE 100 since it was formed. Yet the average Footsie investor has still made huge profits from the index in that time.
Making a million with UK shares
I reckon the global economy will bounce back strongly from the Covid-19 crisis. UK share prices have always climbed from the canvas after serious social, macroeconomic, and geopolitical challenges during the 20th and 21st centuries. And you and I don’t need to spend a fortune building a five-star stocks portfolio to make millions, either.
Using that 8% average annual return that the FTSE 100 has provided since 1984 as an example, someone who invests £467 a month for 35 years in UK shares can expect to have broken the one-million-pound barrier. To be exact, they’ll be sitting on a handsome retirement pot of £1,000,579.
So don’t let the Covid-19 crisis dent your appetite for UK shares. Sure, you and I need to be more careful as the global economy enters a challenging period and corporate balance sheets come under pressure. But with the help of experts like The Motley Fool you can avoid the duds and craft a top-class shares portfolio that could help you get seriously rich. So do some research and get investing today.
Royston Wild 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.