Buying the best UK shares could be a sound means to achieve financial freedom. After all, the stock market has delivered high single-digit annual returns in the past.
Meanwhile, assets such as cash and bonds currently offer low returns due to historically-low interest rates. Furthermore, the high prices of gold and UK property mean equities may offer the best investment opportunity for the long run.
As such, buying a diverse range of high-quality companies could be a shrewd move. Here are five stocks that could deliver improving financial performances in the coming years.
An improving outlook for UK shares
While many UK shares are currently experiencing challenging operating conditions, their prospects for the long run are likely to improve. After all, the economy has always recovered to post positive GDP growth following even its very worst declines in the past.
As such, companies such as housebuilder Bellway and home furnishings retailer Dunelm could prove to be profitable investments. Bellway may benefit from a prolonged period of low interest rates that helps to make housing more affordable for first-time buyers.
Meanwhile, Dunelm’s online focus could catalyse its financial performance Meanwhile, fewer restrictions on the retail sector in the medium term may strengthen its prospects even further.
Improving strategies to generate high returns
Other UK shares that could be worth buying now to achieve financial freedom over the long run include Britvic and Domino’s. Both companies have experienced mixed performances in recent months. Weak consumer confidence has the potential to weigh on their performances in the near term.
However, Britvic has a number of strong brands that may provide stable sales and profit growth over the coming years. Meanwhile, Domino’s has a solid market position and may even experience improving growth trends. Certainly as consumers trade down from restaurants to takeaways in response to a challenging employment outlook.
Another FTSE 250 company that could outperform UK shares in the coming years is gold miner Centamin. It has experienced a challenging period, with production disappointment causing its share price to fall. However, it’s forecast to post improving profitability over the next couple of years. As such, its price-to-earnings growth (PEG) ratio of 0.2 indicates that it offers good value for money at the present time.
Achieving financial freedom
Clearly, buying UK shares is unlikely to mean an investor achieves financial freedom in the short run. History shows that it can take stocks many years to fulfil their potential – especially following what has been a tough economic period.
Currently, other assets appear to offer low potential rewards and many UK stocks seem in good positions to capitalise on an economic recovery. So now could be the right time to buy a broad range of companies from across the FTSE 350 for the long run.
The post Best UK shares to buy now: I’d invest money in these 5 stocks to achieve financial freedom appeared first on The Motley Fool UK.
Peter Stephens owns shares of Centamin. The Motley Fool UK has recommended Britvic and Domino's Pizza. 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 2021