Forget gold! I’d buy the FTSE 250 to retire on

first_imgForget gold! I’d buy the FTSE 250 to retire on Our 6 ‘Best Buys Now’ Shares See all posts by Rupert Hargreaves Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Enter Your Email Address “This Stock Could Be Like Buying Amazon in 1997” Rupert Hargreaves | Saturday, 7th March, 2020 center_img Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Rupert Hargreaves 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. Image source: Getty Images. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Simply click below to discover how you can take advantage of this. The gold price is a safe haven investment — a sheltered harbour in stormy waters for investors. Indeed, over the past few weeks, as stock markets around the world have whipsawed, the price of gold has jumped. It traded as high as $1,680 per ounce at the end of February, up from $1,550 at the beginning of the year. 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…As such, the yellow metal looks like an attractive investment in the current market environment. However, gold isn’t a sensible long term investment. While the asset might offer stability in falling markets, over the past three decades, it has returned just 4.7% per annum. By comparison, since its inception three and a half decades ago, the FTSE 250 has produced a compound annual return of 12%. A better buy These numbers suggest investors would be better off buying the FTSE 250 as a long-term investment. A lump sum of £1,000 invested for 35 years, at an average annual rate of return of 12%, would become £65,000. The same £1,000 invested at 4.7% would be worth just £5,200 after three-and-a-half decades. It’s impossible to predict what the future holds for the stock market in the short term. Nevertheless, in the long term, it’s highly likely the FTSE 250 will continue to outperform gold. Gold is only worth as much as someone is willing to pay for it. That makes the asset somewhat of a speculative proposition. By comparison, the FTSE 250 is a collection of productive companies, all of which produce cash flows.Most of these companies can increase prices in line with inflation, which means earnings should grow steadily over in the long run. The same can also be said of their dividends.Gold doesn’t offer a dividend, and because it doesn’t produce any cash flow, there’s no guarantee its value will rise over time. While the FTSE 250 might have more domestic exposure than its blue-chip peer, the FTSE 100, the index’s constituents still offer broad global diversification. They also provide sector diversification. If you buy the gold price, there’s no diversification. You are just betting on the rising price of one commodity. Gold stocks If you have to add gold to your portfolio, gold stocks might be a better option than the yellow metal itself. Miners are volatile investments, but they usually offer a dividend, unlike the commodity.What’s more, some producers have costs below $1,000 per ounce. That suggests they’re making substantial profits at current levels. This cash could be returned to investors with bigger dividends, or share buybacks.Interestingly, until the beginning of February, over the past five-years, a basket of gold and silver mining stocks outperformed the gold price by around 15%. So overall, all while the gold price might look attractive after recent gains, if you’re investing with a long-term time horizon, the FTSE 250, or a basket of gold and silver mining stocks, could be the better investment.last_img

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