FTSE 100 watch: I’d buy these 5 UK shares to double my money in the new bull market

These FTSE 100 (INDEXFTSE:UKX) stocks could outperform other UK shares in a new bull market. I think they’re worth buying today.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The FTSE 100 has rallied in recent months, but a number of UK shares could deliver impressive returns in a new bull market.

With the index having recorded an 8% annual total return since its inception in 1984, investors could realistically double their money over a nine-year period.

However, through buying high-quality companies such as those discussed below, it may be possible to outperform the market and obtain 100% returns in a likely stock market rally.

Improving market conditions for FTSE 100 stocks

FTSE 100 stocks such as Diageo and Burberry could beat the investment performances of other UK shares over the long run. Both companies have suffered major disruption this year. Lockdown measures have caused demand for their products to fall, which could continue over the short run.

However, they both have competitive advantages over their peers. For example, they’ve high levels of customer loyalty that may mean they can ride out short-term challenges and deliver long-term profit growth.

Moreover, Burberry’s focus on sustainability and digital growth may further improve its market position. Similarly, Diageo’s recent acquisitions may strengthen its capacity to generate high sales growth in the coming years.

Retail opportunities among UK shares

FTSE 100 retailers Next and Sainsbury’s may also deliver higher returns than other UK shares. Even though consumer confidence is weak, their performances this year have shown the resilience of their business models.

Looking ahead, both companies are investing in digital growth opportunities. For Next, this means a wide platform that incorporates third-party sellers to create a destination for UK consumers.

Meanwhile, Sainsbury’s is expanding the availability of its delivery slots as an increasing number of shoppers are likely to stick with home deliveries or click and collect options post-coronavirus. This may set both companies up for strong growth as the world increasingly heads online.

A chance to benefit from a new bull market

FTSE 100 stocks such as WPP have suffered to a larger extent than many UK shares in the 2020 stock market crash. The main reason for this is its dependence on the world economy’s outlook for its growth.

However, it could be among those businesses that stand to benefit the most from a likely global stock market recovery. Rising global GDP growth may mean it can generate higher returns. Meanwhile, its focus on reducing debt and pivoting to becoming a technology specialist may provide it with a stronger growth opportunity in the long run.

As with all FTSE 100 stocks, UK shares such as WPP may experience further difficulties in the short run due to a weak economic outlook. However, their strategies, market positions and likely recoveries in a new bull market may enable an investor to double their money in the coming years after what has been a tough 2020.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of Diageo and WPP. The Motley Fool UK owns shares of Next. The Motley Fool UK has recommended Burberry and Diageo. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

My top 2 stock market predictions for 2025

This writer didn’t receive a crystal ball for Christmas, but he still has a couple of stock market predictions for…

Read more »

Investing Articles

3 companies that could emulate Nvidia stock’s success in 2025

Nvidia stock has generated market topping growth over the past two years. But investors need to be asking themselves, who…

Read more »

Runner standing at the starting point with 2025 year for starting in new year 2025 to achieve business planing and success concept.
Investing Articles

Here’s my plan for maximising the returns from my Stocks and Shares ISA in 2025

After a good 2024, Stephen Wright has two key ideas he wants to implement in his Stocks and Shares ISA…

Read more »

Investing Articles

3 key FTSE 100 stock updates to watch for in January

My 2025 investing focus is on key FTSE 100 stocks in key sectors, and we won't have very long to…

Read more »

Investing Articles

Why the Diageo share price fell 10% in 2024

The Diageo share price fell 10% last year. But Stephen Wright thinks the stock market's being too pessimistic about a…

Read more »

White female supervisor working at an oil rig
Investing Articles

Why the BP share price fell 16% in 2024

Oil prices have been falling since April causing BP shares to do the same. But Stephen Wright thinks there’s much…

Read more »

Affectionate Asian senior mother and daughter using smartphone together at home, smiling joyfully
Investing Articles

Could these UK shares help investors beat the FTSE 100 and S&P 500?

I reckon these brilliant blue-chip UK shares might just beat both the FTSE 100 and S&P 500 indexes over the…

Read more »

The flag of the United States of America flying in front of the Capitol building
Investing Articles

Best US stocks to consider buying in 2025

We asked our freelance writers to reveal the top US stocks they think investors should think about buying in 2025.

Read more »