If you had £1,000 to invest at the beginning of 2023, what method would you have chosen?
Personal finance comparison website, finder.com, has created an annual Investment Challenge that tracks how popular types of investments are performing against each other. By (fictionally) investing £1,000 in each option, the aim is to help understand the markets and risk associated with different approaches.
Bitcoin outperforms the most popular stock, the most popular currency, the most popular fund, the highest savings rate, gold and the most popular index in the UK. An investment of £1,000 at the start of 2023 in Bitcoin would now be worth £1,614.72. Over the last four years, Bitcoin has outperformed the most popular investment vehicles three times.
Bitcoin is more volatile than other investments, falling by over 60% in last year’s investment challenge. However, £1,000 worth of bitcoin at the start of 2020, would now be worth £3,030.66, showing a strong long-term performance.
The US dollar and gold are known to be good for retaining value as they are some of the most stable investments, however their returns are typically limited. On the flip side, last year they provided the highest returns, given their stability during uncertain times.
While the US dollar was the most successful investment in the 2022 challenge, it is in last place after the first few months of 2023. It is the only investment that has currently lost money.