In the world of stock investments, outperforming the S&P 500 is the ultimate goal. As 2024 comes to a close, I find myself reflecting on the success of the four largest investments in my Stocks and Shares ISA, all of which have surpassed the market average. It’s a moment that has sparked introspection and contemplation.
Stocks in My Portfolio
- Citigroup (NYSE:C) stands as the predominant stock in my portfolio. The anticipation of relaxed banking regulations following the US election has driven the share price higher, cementing its position as a leading investment.
- Games Workshop, a UK-based company, has defied challenges in its industry by experiencing robust sales growth. This resilience has translated into a positive trajectory for its shares.
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Eyes are also on Amazon, with significant movements in its stock price since November. The growth in its cloud computing and online advertising divisions has contributed to the upward trend of its shares.
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Last but not least, Berkshire Hathaway remains a stalwart in my investments. Despite Warren Buffett’s views on the stock’s valuation, investors continue to be drawn to his investment vehicle.
Each of these investments has outperformed the S&P 500, which has seen a 28% increase since the beginning of the year. Citigroup (+34%), Games Workshop (+45%), Amazon (+46%), and Berkshire Hathaway (+29%) have all surpassed this benchmark.
Reflecting on Choices
The success of Citigroup has been particularly intriguing. A strategic investment made when Jane Fraser took the reins as CEO has paid dividends. The ongoing turnaround plan, focusing on core competencies and selling off non-essential assets, has positively impacted the stock price. However, the significant increase in its valuation raises questions about its future growth prospects.
While the stock was anticipated to be a long-term play, the unexpected success this year has altered the investment landscape. Despite Citigroup’s discounted valuation compared to other major US banks, the current price levels are a cause for consideration. The dilemma lies in deciding whether to retain the investment or explore new opportunities.
Challenges of Outperforming
Outperforming the S&P 500 is no easy feat, as evidenced by the mixed performance of my overall portfolio. While some stocks have shown significant gains, others like Diageo have been a drag on returns, down 17% since January. This dynamic highlights the importance of long-term goals over short-term fluctuations.
As I navigate through the complexities of investment decisions, I am reminded of the significance of a strategic approach. While the allure of short-term gains is enticing, it is the long-term vision that ultimately shapes the trajectory of my investments. Making informed choices based on thorough evaluation will pave the way for sustained success in the ever-evolving world of stock investments.
