Buying and holding the best UK shares could be a sound strategy to achieve financial freedom. After all, the stock market is one of the greatest wealth-building devices available when used correctly.
And while savings accounts are offering better interest rates compared to a few years ago, they’re still not close to matching the FTSE 100‘s 8% historical average return.
As such, building a diversified portfolio of high-quality companies could be a shrewd move. And could even achieve market-beating returns in the long run. With that in mind, here are two stocks I believe can continue to deliver wealth-building value to shareholders.
Reliable self-storage income?
The self-storage industry is far from the most exciting sector to invest in. And yet, demand for such services continues to rise even during this cost-of-living crisis.
Safestore (LSE:SAFE) is one of several UK shares operating within this space. With consumer awareness increasing, management has had little trouble expanding its real estate empire. And by strategically positioning depots near urban populations, both revenue and earnings have risen drastically over the years. So much so that dividends have been hiked for 13 years in a row!
With interest rates rising, the cost of acquiring new facilities is also climbing. And this headwind could handicap the company from continuing to deliver its historical growth rates.
However, the difficulty and hassle for customers to pack up their belongings makes for a sticky relationship. And since the demand for extra storage space isn’t likely to disappear anytime soon, I believe a buying opportunity has emerged for income investors. Even more so, consider the stock is down 20% in the last 12 months.
UK shares defying expectations
Games Workshop (LSE:GAW) is the mastermind behind the Warhammer universes. For those unfamiliar with the company, it designs and sells plastic miniatures for some of the world’s most popular tabletop games and hobbies.
There’s no denying it’s one of the nerdiest companies in the FTSE 250. Yet the meteoric rise of sales and profits is pretty jaw-dropping. Speaking from personal experience, the hobby is exceptionally addictive. And it would seem I’m not alone in that opinion.
Looking at the latest trading update, sales for its 2023 fiscal year are on track to land at £440m versus £387m a year before, with pre-tax profits at £170m, up from £157m.
Needless to say, a consumer discretionary company achieving double-digit growth during a cost-of-living crisis is quite impressive. Even more so, given that Games Workshop miniatures are far from cheap. And with its latest Warhammer 40k: Leviathan boxset selling out worldwide in under 12 hours, its 2024 fiscal year is seemingly off to a terrific start.
However, like all UK shares, there are always risks to consider. In the case of Games Workshop, the firm is facing a rising threat from 3D printers becoming more widely available. Determined Warhammer fans could turn to this cheaper but illicit alternative to acquire miniatures. If a large number of customers start to print unofficial models, the firm’s impressive growth could start to slow.
Despite this threat, I remain optimistic about this business’s long-term potential. Its cult-like dedication from customers is a powerful advantage. And it’s one that I don’t see disappearing anytime soon.
