The Motley Fool | Oct 16, 2020 11:10
Many investors are avoiding UK shares at the moment. In some cases, this is understandable. The outlook for London-listed stocks is highly uncertain with the coronavirus crisis and Brexit weighing on investor sentiment.
However, the best time to buy stocks is often when other investors are selling. What’s more, not all UK shares are created equal. Some companies, particularly in the technology sector, are world leaders in their respective fields.
So, I think that buying a basket of these shares today could potentially help you retire rich.
UK shares to buy Credit rating business Experian (LSE: EXPN) is one of the world’s largest data processing businesses. It’s been managing consumer credit information for decades. This gives it a strong competitive advantage over the rest of the industry because, in the world of data, the more you have, the better.
It would be tough for a competitor to replicate Experian’s data set. It’s growing every single day. This is why I think the stock could help you retire rich. Experian is one of the few UK shares that has a truly global footprint and competitive advantage.
These advantages have helped the group produce healthy returns for investors over the past decade. An investment of £10k in the stock 10 years’ ago would be worth £51k today. As the company continues to dominate the global financial data space, I think these returns can continue.
Market leader There was one clear blue-chip winner from this spring’s lockdown. That was Ocado (LSE: LON:OCDO). While many other UK shares struggled in the first half of the year, this business prospered.
Demand for the retailer’s services was so high that it had to stop taking new customers for a while. Many companies would kill to have this problem.
Ocado’s critical competitive advantage is its technology. The group owns the tech behind its robotic warehouses, which it’s been licensing to other retailers. The pandemic has exposed one significant weakness in supermarkets’ business models — they need humans to prepare orders.
If a large percentage of the workforce is sick, then they may struggle to fill orders. Ocado’s solution removes this issue. Robots can’t get ill, and they can keep going when the rest of the world is shut down.
Therefore, I think the demand for Ocado’s tech will only increase. As well as this growth, the company should also continue to see rising demand for its home delivery service.
Over the past few years, the retailer has defied all expectations. I reckon it could continue to do so. Nothing is stopping its growth from here. The firm has the money, technology and investor support. Another shutdown could even benefit the retailer.
As such, I think it may be worth adding Ocado to a basket of UK shares today. This tech leader’s growth could only just be getting started.
The post £10k to invest? I think these UK shares could help you retire rich appeared first on The Motley Fool UK.
Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Experian. 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.
Motley Fool UK 2020
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.
More content, faster quotes and charts, and a smoother experience is available only on the App.