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Stock market investing can be a great way to build long-term wealth. This is why I invest any surplus money I have at the end of the month in a stock portfolio.
Even a reasonably modest sum like £5,000 invested today can have a huge impact on my long-term wealth. If UK shares continue to deliver an average annual return of 10% – as they have done over the past decade – I’ll be worth a staggering £87,250 after 30 years.
The intense stock market volatility of 2022 has resulted in a large number of top stocks trading at dirt cheap prices. A lot that I think can rise above current levels and deliver impressive long-term returns. Each trades at rock-bottom multiples and yields attractive dividends.
Macfarlane Group
The problem with investing in stocks around the “penny stock” realm is that they are vulnerable to high stock price volatility. But I think Macfarlane Group Excellent shareholder returns as e-commerce grows.
You will see Macfarlane (trading at 105p a share) developing and distributing generic and custom fit packaging. And it could sell its division earlier this year to invest in the fast-growing sector. Revenue at the business rose 14 percent in the six months to June.
Today, this small cap trades at a price-to-earnings (P/E) ratio of just 9.2 times to 2022. It also yields a healthy 3.2% dividend yield.
Vistry Group
London’s stock market is full of housebuilders who trade at low earnings multiples and hold large dividends. Take it Vistry Group for example. This particular operator trades at a P/E ratio of 4.8 times and carries a 9.7% yield.
Such companies are particularly vulnerable to rising interest rates. In this case, the buyer’s affordability comes under increasing pressure, which may affect sales.
But so far Vistry and his peers have been able to withstand recent Bank of England action. This particular developer reported forward sales of 10% in early September.
If the rumors surrounding stamp duty are also true, things could be better for the house builders. Media reports say the government will cut property tax in Friday’s mini-budget.
St. James’s Place
As my nerdy colleague Edward Sheldon recently commented: “High inflation, rising interest rates, stock market volatility and falling bond prices are all challenges for anyone looking to save and invest for their future.He said.
Accordingly, people are scrambling for help on how to best use their money. For this reason I want to buy FTSE 100 Stock St. James’s Place For my portfolio. I like its high 4.9% dividend yield, and its forward price-to-earnings growth (PEG) of just 0.4 makes it a steal.
Competition in the financial services space is fierce. But as one of the industry’s leading players, St James’ Place has the strength and brand recognition to thrive in this tough market. I think it will provide excellent returns for long-term investors.