While many investors may be interested in buying bitcoin as part of their retirement savings plans, the reality is that the FTSE 100 could offer superior risk/reward opportunities. It continues to be relatively cheap, and it’s possible to achieve a high level of diversification, so reducing the overall risk.
Of course, there are a number of shares which could outperform the FTSE 100 over the long run. Here are two prime examples that could do so over the coming years, thereby helping their investors’ retirement savings plans in the process.
Reporting on Tuesday was chocolatier and multichannel retailer Hotel Chocolat (LSE: HOTC). The company’s full-year results showed a rise in revenue of 11% to £116.3m, with profit before tax moving 13% higher to £12.7m. During the period, the company opened 15 new stores, which contributed 6% to group sales year-on-year. It has also continued to invest in its factory, which has helped to increase gross margin by 50 basis points.
Looking ahead, international expansion is an obvious step to make. While this could entail a degree of risk and uncertainty, ultimately it could lead to stronger financial performance in the long run. The company intends to open its first stores in the US and Japan in the coming months, although it continues to adopt a cautious approach to its expansion plans.
With Hotel Chocolat forecast to post a rise in earnings of 18% in the current financial year, its prospects appear to be impressive. Although it has a price-to-earnings growth (PEG) ratio of around 2, its long-term growth potential may mean it offers fair value for money at the present time.
Also offering growth potential within the retail sector is ABF (LSE: ABF). Although the company is highly diversified and has a range of operations including sugar and ingredients, its budget fashion retail arm Primark is the biggest contributor to its financial performance.
While many retailers may be concerned about weakening consumer confidence in the UK, ABF could be a beneficiary. Its Primark division is a no-frills operator which caters to the budget market. Shoppers may trade down to Primark from more upscale department stores over the coming months, with Brexit uncertainty set to increase. And with inflation moving higher in August, real disposable incomes may fail to rise as quickly as investors had been anticipating.
With ABF expected to deliver 5% earnings growth in each of the next two years, it appears to be delivering results which are in line with its guidance. Alongside its retail appeal, it offers a degree of diversity which few FTSE 100 shares can match. As a result, now could be the right time to buy it, with it having the potential to offer a stronger long-term total return than the FTSE 100. Accordingly, it could provide a significant boost to an investor’s retirement savings plan.