Forget Bitcoin! I’d rather make a million through buying FTSE 250 growth stocks today

Although the price of Bitcoin may have surged higher in 2019, it continues to offer an unclear outlook for investors. Risks such as a lack of fundamentals, the prospect of a change in sentiment, as well as the uncertainty regarding its potential to replace traditional currencies may weigh on its performance over the coming years.

As such, buying FTSE 250 shares could be a better idea. Not only do they provide greater diversity and lower risk than the virtual currency, they also offer strong growth potential in many cases.

With a track record of high annualised returns, as well as a relatively strong dividend yield, FTSE 250 stocks could be a better means of making a million than Bitcoin.

Risks

As mentioned, the outlook for Bitcoin remains uncertain despite its recent rise in price. There are a number of question marks surrounding the future of the cryptocurrency, with its lack of infrastructure and potentially limited size meaning that it may be unable to replace traditional currencies. This could cause a decline in demand among investors over the coming years.

Of course, since Bitcoin lacks fundamentals, a reduction in investor demand for the virtual currency would be likely to cause a drop in its price. Since investors have no way of knowing what it is worth, it is difficult to know at what price the virtual currency represents good value for money. A lack of a clear margin of safety may mean that investors are taking significant risks in buying Bitcoin, which could lead to disappointing returns in the long run.

By contrast, the FTSE 250 provides the opportunity to diversify across real businesses that have annual reports, as well as regular updates. This allows an investor to obtain a margin of safety when purchasing stocks, which could help to reduce risk over the long run.

Returns

Clearly, Bitcoin’s returns in 2019 have been superb. This trend could be repeated in future, but the track record of the virtual currency suggests that it is likely to exhibit a high…

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