2024 has been a great year for my Stocks and Shares ISA. Thanks to some prudent purchases in 2022 and 2023, I can now pat myself on the back as my portfolio has generated almost a 28% total return year-to-date. By comparison, the is only up around 10%, with the coming in at a more impressive but still smaller 25%.
It’s a wonderful feeling. And one shared by many contrarian investors who capitalised on the bargains of the 2022 stock market correction. However, with so much growth achieved, what am I doing now to try and maintain this upward momentum? Watering the flowers and cutting the weeds Despite having 24 stocks in my ISA, almost 65% of my portfolio is concentrated in my top five holdings: , , , , and .
Needless to say, this level of concentration is pretty extreme. And it results in a lot of volatility that most investors wouldn’t be comfortable with. However, this wasn’t intentional.
Instead it was a naturally occurring event as all five companies simply dominated their respective industries. After such tremendous gains, most investment advisors would advocate selling some shares and reallocating the capital to other businesses. That’s sound advice for ensuring investors stay within their limits while maximising the benefits of .
However, I have the luxury of a 20-year+ time horizon and a strong stomach for volatility. As such, I prefer taking a page out of Peter Lynch’s book and selling my losers rather than my winners. Bye bye underperformers Even after the .