Top UK growth stocks has received a lot of attention so far in 2020. One reason for this is that the divergence between share price performance has been very large. Due to the pandemic, some share prices have fallen 50%! On the other hand, some growth stocks have registered a 50% climb. The difference between the two (a 100% gap) is large, hence why more focus is being put on the positive outperformers.
Investing in some of these stocks can be life changing, to such an extent that you may be able to retire early. Obviously the exact amount of time it will save you from your planned retirement age will vary depending on the amount you invest. It also depends on how much you’re planning on spending during retirement! But even using £94 a week can go a long way to reaching that goal faster.
£94 a week
Investing little but often is a good strategy when it comes to stocks. That’s why I suggest doing it on a weekly basis. This isn’t a hard rule, but it serves two purposes. First, from a psychological point of view, it’s easier to fund £94 a week than to get to the end of six months and have to fork out £2,444 into investments. Second, it enables you to smooth out the swings in share prices to get a better average price.
For example, if you just invested at the beginning and middle of each year, you’d have bought UK growth stocks in January and July. Yet the best time to have bought was during the stock market crash in March. If you’d been investing weekly, you’d have managed to buy during the sell-off at lower levels.
Over time £94 a week can go a long way. Take one of my favourite top UK growth stocks, Ocado. The share price has doubled this year, and I think the future looks bright. You can read the similar view my colleague Rupert Hargreaves has by looking at this article. If you’d been investing one of your £94 weekly allotments into Ocado once a month throughout 2019, it would be currently worth over £2,250. That is just from one stock!
Top UK growth stocks for the future
Now some of you might be reading this and say the Ocado investment was impossible to call ahead of time. I actually disagree, as the stock has been growing in a strong way for at least the past three years. An investment into it as a growth share last year would have been a sensible and straightforward play.
This leads me to conclude that for the other £94 weekly investments, sometimes the simple stocks are the best. Take a look at Polymetal International, which again has been growing strongly since 2018. It’s perfectly rational to invest here on the premise of further potential gains.
If you manage to achieve a 10% average share price growth a year, investing £94 a week would get you a pot of over £250,000 in 20 years time. This is enough to help early retirement regardless of how expensive membership to the golf club is!