Forget retiring early with gold! I’d invest money in these 2 UK shares now to get rich
The Motley Fool
Published Sep 10, 2020 14:20
Updated Sep 10, 2020 14:40
Forget retiring early with gold! I’d invest money in these 2 UK shares now to get rich
The soaring gold price may convince investors to avoid UK shares to buy the precious metal. However, its high price may mean that scope for similar gains to those experienced so far this year are somewhat limited.
As such, while many FTSE 100 shares currently trade at low prices after the market crash, building a portfolio of high-quality businesses may be a better idea. Here are two such companies that could improve your retirement prospects in the coming years.
A buying opportunity among UK shares Taylor Wimpey’s (LSE: TW) recent half-year performance highlights the difficulties many UK shares have experienced this year. The housebuilder’s share price is down 42% year-to-date, while its half-year results showed a 56% fall in revenue, due in part to lockdown measures that forced the closure of its sales sites.
Despite this, the company’s prospects appear to be improving as the economy reopens. Its results showed it retains a solid financial position, while government support for the sector is pushing demand for homes to higher levels.
With Taylor Wimpey’s shares currently trading on a forward price-to-earnings (P/E) ratio of 9, the company seems to offer good value for money. As such, now could be the right time to buy a slice of the business as it embarks on a long-term recovery following its recent stock price fall.
Defensive investing potential United Utilities (LSE: UU) has also recorded a share price fall relative to other UK shares this year. The utility company is down 10% since the start of the year as investors have become more cautious about regulatory change within the water services industry.
Although this could lead to a changed dividend policy for the business, its recent results highlighted a solid operating performance. For example, its underlying after-tax profit increased by 5% despite a challenging period for the wider economy.
This resilience could make it more appealing to investors during an uncertain economic period when other FTSE 100 companies are struggling to maintain sales and profitability.
As such, now could be the right time to buy shares in United Utilities. Its defensive characteristics may mean it outperforms other UK shares over the long run.
Building a diverse portfolio Of course, building a diverse portfolio of UK shares is crucial due to the insecure outlook for the economy. It can help to reduce overall risks and improve long-term returns for investors who are seeking to retire early.
Therefore, buying United Utilities and Taylor Wimpey (LON:TW) as part of a broader portfolio that contains shares from a variety of sectors could lead to outperformance of other assets such as gold.
Get The App
Over the long run they may offer higher return prospects than the precious metal that improves your chances of building a generous nest egg for retirement.
The post Forget retiring early with gold! I’d invest money in these 2 UK shares now to get rich appeared first on The Motley Fool UK.
us better investors.
Motley Fool UK 2020
First published on The Motley Fool
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.