How To Invest In FTSE 100?

In 2019, Brexit average investors were possibly living in the uncertainty of the market. In the last weeks of October, the European stock markets opened lower as the investors presumed another delay in the deal.

Britain's FTSE 100 grew 0.38 per cent, mostly helped by the decline in the currency value that fell on October 22. The decline in the sterling price was caused by the failure of the Prime Minister to get the vote for the timetable motion, which would have made the deal a law in just a few days.

A no-deal could have resulted in a further decline in GBP, and it is assumed that if Brexit is passed, the rally of GBP to USD could be 1.35.

Comparing investment opportunities UK - FTSE 100 to buy-to-let

FTSE100 provides an opportunity to diversify risk by buying stocks from multiple sectors and investing in various markets to gain even when some businesses are not doing well.

One can get dividends through investing in shares which is roughly around 4.5 %, and the first step for most buyers is to get stocks that deliver better dividends and give bonuses annually.

FTSE100 has a strong track record of growth, delivering about 8 per cent annual returns in the last 35 years. It has a wide range of shares, and its historical performance shows it can deliver growth over the long run.

It provides a good option to collect investment opportunities in the UK for retirement. However, it is widely affected by changes in monetary policies, geopolitical factors and individual company/industry performance.

In the past five years, reports find the total return was 21%, and the average annual return was 3.9%, with dividends reinvested. The total in the past ten years is 121%; per annum, it delivered up to 8.8%.

After the 2008 financial crisis, in March 2009, the FTSE reached its six years low since 2003, and the investors were disappointed, but in the remainder of the year, they could get back 22% from the top 100 firms.

Buy-to-let offers relative investment opportunities in the UK to FTSE because it is easy to get a mortgage at a lower interest rate. Still, such investment ideas may not be advised when the real estate markets stagnate due to oversupply and low demand.

In the last 20 to 30 years, rental markets have delivered lucrative returns to property owners. The prices were up by 23%, on average, and in the capital city London, the boom was explosive, where the average rates grew from 450% to 650% since 1995.

It is unlikely the rates may grow at the same rate, and the unprecedented growth has been linked to the property market bubble, which raises risks. The market remained stable in the last few months, but the gains are unlike before.

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