Buying UK shares is a brilliant way to try and get seriously rich. The usual long-term investor makes an awesome average return of 8-10% per year, history has shown us. You can take a gamble with volatile Bitcoin, stash your money in low-paying Cash ISAs, or get in on the cost-heavy buy-to-let market. But why would you bother when stock investing is proven to make individuals such terrific returns.
I think there’s never been a better time to get rich with UK shares either. Well not in recent memory at least. Okay, stock markets have recovered from the lows ploughed during the 2020 stock market crash. But stacks of top-quality UK shares still appear to be trading far too cheaply as we head into 2021. And this provides an unmissable buying opportunity for eagle-eyed investors.
Becoming an ISA millionaire
The number of Stocks and Shares ISA millionaires soared during the 2010s. These people bought oversold UK shares in the immediate aftermath of the 2008 banking crash. They then sat back and got very rich as the global economy bounced back, profits across UK plc recovered, and investor confidence improved.
The value of their shares subsequently rocketed from their post-crash lows. And there’s every reason to expect UK share prices to soar again following the Covid-19 crisis of the early 2020s. The economic recovery might prove lumpy and investors need to be careful to avoid companies with weak balance sheets and poor growth outlooks. However, past form shows us that global stock markets always come roaring back.
Remember that the world looked like it was caving in during the subprime mortgage crisis. Fears circulated that world’s biggest banks could be going extinct, while a sovereign debt catastrophe threatened to sink the eurozone. Yet UK share prices came roaring back in the subsequent years. Indeed, the FTSE 100 raced to record highs of 7,877 less than a decade after the bailout of Goldman Sachs.
Stimulus to boost UK shares again in 2021
The stock market recovery of the 2010s was no one off either. UK share prices have always recovered strongly from wars, recessions, pandemics and other macroeconomic, geopolitical and social crises in recent centuries.
And there’s one reason why I think stock markets could soar as strongly as they did following the banking crisis. The huge monetary support from central banks that started in early 2020. Interest rates are at record lows in major economies and are likely to remain there. Major organisations like the Federal Reserve are set to keep their quantitative easing programmes rolling too. More major stimulus from governments can also be expected.
UK share prices have recovered solidly from their 2020 lows. And I expect them to remain locked in a brilliant upswing as we move through this new decade. I’ve kept buying cheap shares despite the short-term uncertainty facing the global economy. I plan to keep investing in my Stocks and Shares ISA during 2021 too, in the hope of becoming one of those celebrated ISA millionaires.
The post UK share investing in 2021: a great chance to build a £1m Stocks and Shares ISA! appeared first on The Motley Fool UK.
Royston Wild 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.
Motley Fool UK 2021