How you’d invest £1,000 until 2030

(Image credit: A fistful of fifties ©)

published 25 May 2020

First of all, thank you so much. Our inbox has been swamped with suggestions for our “invest £1,000 for ten years” challenge. Merryn has chosen the winner in her editor's letter this week, but you sent in so many ideas that we thought we’d review them and get a feel for what MoneyWeek readers are buying now.

Gold, silver – and bitcoin

This being MoneyWeek, the most popular single asset – chosen by just under a fifth of entrants – was gold. Most of you opted for bullion, with a few opting for funds (Merian Gold and Silver seemed to be a popular catch-up play due to its relative overweighting in silver), or even individual stocks (royalty-streaming play Wheaton Precious Metals (NYSE: WPM) was noted by more than one reader). Concerns about the inflationary impact of post-coronavirus policy played a big role here.

Several of you also spotted silver’s potential to catch up with gold, with many noting that silver is unusually cheap relative to gold. That catch-up appears to have started this week, so hopefully you’d already invested.

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Bitcoin was also popular. It’s clear that many of you view the cryptocurrency as a form of digital gold and a way to hedge against central bank money printing – though other cryptos look like pure punts: ideas included ethereum, ripple and IOTA.

MoneyWeek view: We always think you should have a bit of gold as portfolio insurance and while we can’t have any idea of how much it’ll be worth ten years from now, we can be sure it’ll be worth something. Silver is riskier – it looks like a promising catch-up play now, but we’d be inclined to agree with T Ferguson, who noted that he might have gone for silver had the holding period not been a decade, “but it’s just as likely to crash again in that timescale”. As for cryptocurrencies – while we’d still favour gold over bitcoin, it’s been around long enough now that it’s very hard to dismiss and it has certainly proved its value in terms of moving money out of countries afflicted by hyperinflation. As for the others – if you don’t mind losing your £1,000, gambling on a fledgling crypto isn’t a bad moonshot. As M Baker, who opted for IOTA, put it, “obviously if it was my last £1,000 my answer would be very different!”. That said, if you just want to gamble, premium bonds (another popular choice) still offer a slim chance of winning a million – but at least you get to keep your £1,000.

Investment themes

Baillie Gifford’s Scottish Mortgage Investment Trust was your most popular fund pick by a long way and no surprise there – it’s a core holding in our model investment trust portfolio and also the most successful. Terry Smith is also very popular, with many readers citing his new Smithson Investment Trust, and his Fundsmith Equity Fund.

Clear themes include technology in general and health technology in particular, both because of Covid-19 and because tech has been so strong for so long. Tips include a simple Nasdaq index tracker, or the Polar Capital Technology Trust, as well as the likes of International Biotech and Biotech Growth Trust. A niche fund that cropped up more than once was Smith & Williamson Artificial Intelligence. On individual stocks, meanwhile, in the hope of hitting a “home run”, J Gardner opted for gene-editing group CRISPR Therapeutics.

Another big theme was “green” energy and storage. Ideas included Gresham House Energy Storage on the latter, while Renewables Infrastructure Group was a popular choice for the former. As for individual stocks, fuel cells and hydrogen power look popular: Ceres Power and ITM Power cropped up more than once. On the commodity side, A Kotadia suggested investing in palladium as a play on electric cars, while R Winter liked junior copper miners as a play on both the green new deal and money printing.

Finally, you had quite a few specific value stock tips. Insurers stood out – a few of you like Aviva and Legal & General. Other tips included Carnival (brave, but maybe right); Johnson Matthey (a play on a platinum revival); BT; the UK banks in general; and National Express (more tourism within the UK).

MoneyWeek view: We hold Scottish Mortgage Investment Trust to offset our naturally bearish tendencies – it’s arguably a pure play on optimism and has helped our returns over the years, so we’re not about to sell it now. As far as we’re concerned, that covers us on the tech front although in this week's magazine, Max King highlights why healthcare technology has consistently been such a good investment.

Alternative assets

You do love your whisky, so I now have lots of excellent tips for tasting wish lists, such as the rare 30-year old single malt from Glenfiddich that P Smart highlighted. T Wheal suggested Georgian furniture: “If I were younger I would fill a warehouse with it at today’s auction prices”, while other tips included 16th-century maps and diamonds. And the whole MoneyWeek team rather liked A Jones’s idea of investing in a vintage typewriter.

MoneyWeek view: alternative assets are fun – and the good thing is that, as most of you pointed out, even if their value hasn’t risen in ten years’ time you still have the asset to enjoy (unless you’ve drunk it).

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John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.