For now, I would like a lump sum payment of £700. And then I invest it in stocks and stocks. There is no question about it.
In my view, the stock market presents investors with one of the most attractive conditions in years. It has endured many stock bear markets. But I think it’s on the last gasp.
And what’s exciting to me is that bull markets tend to start quietly when everyone’s eyes are on the bear market. It doesn’t always sprint in a straight line, causing chaos. Almost unnoticed, they can hang out in the kitchen if we leave the door open.
Good business transactions from companies
But market turns can be messy. Some stocks continue to fall, some stocks surge, and some stocks stay flat. And if you read the situation, everything has happened in the last few weeks. In fact, there are some great opportunities for those who choose their stocks carefully. However, there are also some stocks that have performed poorly.
Meanwhile, many companies report strong deals and bright prospects. And when such an announcement surprises the market, it’s easy to spot as stocks surge in catch-up moves. It is clear.
But as always, it’s not a one-size-fits-all conclusion. Stock prices may decline due to poor performance of the underlying business. Nonetheless, the potential for strong long-term returns from equities has increased as valuations have wiped out the worst excesses.
regular investment
So, after investing £700, we don’t quit. My aim is to invest regularly in stock ISA. And I plan to put away as many things as possible every month. Sure, £700 a month would be ideal. That’s because you’re likely to build a £1 million portfolio over the course of your lifetime working at an average salary.
It is often said that long-term compound annual returns from the stock market have historically been around 7%.Even though it’s America S&P 500 The index improved by 10.5%. But even if he could reach 7%, it would take him about 32 years to reach 1 million with an investment of £700 a month.
However, past performance is no guarantee that the market will continue to deliver similar returns. it could be lower. Likewise, it can be high. Of course, there are also risks. All businesses can face operational challenges from time to time. You can lose money on stocks, especially if you choose the wrong stock.
Nevertheless, I accept risk and position myself to profit from the positive potential of stocks and equities. If we hadn’t started already, 2023 would have been the year we took our first steps towards building a £1m equity and equity ISA.
First published in The Motley Fool UK is an article entitled ‘How to invest £700 now’.
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Kevin Godbold has no positions in any of the mentioned stocks. The Motley Fool has no positions in any of the shares mentioned. The views expressed about the companies mentioned in this article are those of the author and may differ from the official recommendations of subscription services such as Share Advisor, Hidden Winners and Pro. At The Motley Fool, we believe that considering diverse insights makes us better investors.
Motley Fool UK 2022