Forget the Bitcoin Price! Here’s How I’d Invest in Stocks to Make a Million

Buying and holding stocks could be a more profitable strategy than investing in Bitcoin.

The strong performance of Bitcoin in 2019 could cause some investors to consider its purchase. After all, it has risen by around 100% in the last 12 months.

However, Bitcoin continues to be a risky asset to hold. It could experience a volatile year in 2020, and may fail to live up to the expectations of some of its bullish holders.

By contrast, the stock market appears to offer excellent value for money at the present time. A buy-and-hold strategy has historically been a sound means of generating high returns, and could increase your chances of making a million.

Undervalued opportunities

While the global stock market has experienced a decade-long bull run, many shares continue to offer good value for money. This may be because investors have gradually priced in the risks facing global growth. For example, political uncertainty in the US and China, as well as the ongoing trade war between the two countries, may negatively impact on the operating environments of many global businesses in the medium term.

However, stock indexes such as the S&P 500 and the FTSE 100 have always recovered from periods of uncertainty to post higher highs. Therefore, recent weakness in share prices could present a buying opportunity for investors. They may be able to buy companies with solid balance sheets and impressive track records of growth at lower prices. This may lead to higher returns, as well as lower risks, since investors are buying stocks at a discount to their intrinsic value.

Buy-and-hold strategy

After a decade-long bull market, it may be tempting to take profit on some of your holdings. After all, no bull market has ever lasted in perpetuity, and a bear market is never too far away.

However, this may not be the most efficient use of your capital. It may be a better idea to remain invested in equities due to their relative appeal compared to other assets such as bonds and cash. They offer lower returns, and could fail to post positive real-terms returns in the coming years.

As such, adopting a long-term view of the stock market and holding the most attractive shares in your portfolio could be a shrewd move. It may enable compounding to impact on your overall returns, while providing the companies in which you hold shares the time they need to successfully implement their growth strategies.

Bitcoin price

The risks of buying Bitcoin continue to be relatively high. Its limited size and lack of infrastructure may hold back its performance, while regulatory change could cause uncertainty. As such, now may be the right time to pivot from the virtual currency to undervalued shares that are held over a period of many years. This strategy may not seem as exciting as holding the cryptocurrency, but it could increase your chances of making a million.

More on Investing

Dividend Stocks

3 Undervalued Canadian Dividend Stocks to Buy Now and Hold for Years

Three Canadian value ideas offer a mix of growth, income, and a real-asset discount, without relying on a “too-good-to-be-true” yield.

Read more »

House models and one with REIT real estate investment trust.
Dividend Stocks

1 Dividend Stock I’d Feel Good About Owning for the Next 7 Years

Choice Properties REIT offers a reliable 4.8% yield backed by Loblaw leases. Here is why this Canadian dividend stock is…

Read more »

holding coins in hand for the future
Dividend Stocks

My 2 Favourite Stocks for Monthly Passive Income

Unlock the potential of monthly dividends with Canadian stocks, focusing on REITs and royalty companies for consistent cash flow.

Read more »

hand stacks coins
Dividend Stocks

3 Dividend Stocks Yielding +4% Canadians Can Own Even When Growth Falls Out of Favour

These three dividend stocks are worth considering for passive income and long-term growth, particularly on market dips.

Read more »

arrows hit bullseye on target
Dividend Stocks

This 5.4% Dividend Play Pays Every Single Month

H&R REIT offers investors a 5.4% yield paid monthly. Here's what its Q1 earnings call reveals about occupancy, asset sales,…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

An Easy Way to Use Your TFSA Contribution Room to Build $757 in Annual Cash Flow

If you're looking to generate tax-free annual cash flow, put your available TFSA contribution room into these top dividend stocks.

Read more »

man looks surprised at investment growth
Dividend Stocks

4 CRA Traps That Could Reduce Your CPP Payments

A big CPP gap exists because most people won’t hit the maximum, and a few common paperwork and timing mistakes…

Read more »

Canadian Dollars bills
Dividend Stocks

How to Use a TFSA to Bring in $1,000 a Month Completely Tax-Free

Build a TFSA around quality monthly dividend stocks with growing businesses, and the journey toward earning $1,000 a month tax-free…

Read more »