As of February 2025, I split my wealth according to: cash, two pension funds, a rainy-day fund in a good interest-bearing account, and my stocks & shares ISA. Since this blog focuses on stocks, let's look at how I've decided to cultivate that ISA and why it is set up the way it is. I'm taking a high level approach, so don't expect every single holding to be listed or gone into excruciating detail.
Underpinning my approach is a core philosophy of: I do not intend to liquidate this ISA for a very long time; ideally the next 35 years. I have a long time horizon and I want to see it grow in terms of returns, dividends, and continued investment on my part; ideally seeing the value of my investment double every 10 years. With that in mind, I take the following approach:
ETFs: buy them and hold them for at least 10 years, regardless of what happens.
Individual Shares: buy them and hold them for at least 1 year, unless they superbly crash beyond a % of my deciding and I believe I need to cut my losses. I have done this only once, right at the start of my investing journey. Take profits whenever, but do let your runners run (I have sold once and been glad I did, and I sold another time and wish I'd held... One time I sold, made a profit, and I'm glad I sold when I did).
I invest thematically based on what I believe is going to dominate the next decade. I go through every page of my broker's ETF offerings to find the funds which I believe will still be receiving commercial and strategic interest 10 years later. For my current portfolio, I identified the following areas to consider:
Which industry will benefit the most over the next 10 years apart from 'tech'?
The answer which immediately sprung to mind was defence; specifically European defence. It was a no-brainer. The developing tensions (and then outbreak of war) in Ukraine, and that the geopolitical stability we'd enjoyed since the 1990s was out the window, point clearly in the direction of investing in defence companies and suppliers. Companies like BAE Systems, which is also a dividend king, would certainly benefit from increased geopolitical tensions, the use of arms, and an increasingly isolationist America.
Emerging markets - but which ones?
I do not have the time to explore every country's stock exchanges, and also know I will never understand some of these countries, thus I find investing in emerging markets is best left to ETFs. The world as a whole has spent much of the 2020s fighting pandemics, facing high interest rates, or dealing with generation defining problems, so I decide to only go for countries or operations in countries that I believe will still relatively stable enough and have a 'reliable history' to provide confidence for the next 10 years. I'm not looking for a little-heard of country that is going to explode in value. Instead, I'm realistic and see that Western countries are turning away from China to many other Asian countries' gain. Naturally, with its huge population, growing middle class that is increasingly consuming goods, and considering the overall size and scale of its economy, India looks to be a sensible bet if I'm holding for the long run.
I am also a big fan of Africa but, owing to Chinese and Russian influence in Africa, I am weary of exposure to funds that could be afflicted by future geopolitical risk. I have therefore taken advantage of Africa's growing demand for comms and mobile financial services via a UK-listed company: Airtel Africa.
Technological advances and threats.
My view was that given long-term horizons I could take risks on tech if done sensibly. Thus, I waited a while to buy individual equities, but at the start I needed some tech focus in my portfolio. This one was a lesson for just scrolling through what's on offer and seeing what jumps out. I saw Cyber Security ETFs and they just made sense. In 10 years we will still be fighting hackers, data thieves, and cyber criminals. In fact, the demand for cyber security will probably have intensified even further as data becomes more valuable than it already is, and hacking becomes an integral part of warfare between states. In my view, cyber security is one of the surest bets for the next decade. As for individual tech companies, here is where I have to say: I did not buy Nvidia at any point. After a small tech crash in 2022, I kept waiting for a bigger crash. This has yet to materialise in the blood bath which I imagine will come, and I have tried to play safely around tech. I did, however, try to consider 'which of the Magnificent Seven' is likely to continue being influential 10 years down the line?' I did this by deduction: Nvidia will not, it's having its time right now. I'm not exactly sure Meta is much beyond personal data. Amazon could have been a good shout, but I felt it was overvalued - or the realisation of what it can offer has already been priced in. Tesla was/is far too marmite - and I think misunderstood - to take a risk on. Microsoft has been listed for too long for my liking. Apple had its time and has been waning on its flagship product, the iPhone, for some time without a clear viable alternative unique product offering. At the same time, I'm seeing a huge increase in market share for Google Pixel phones, Alphabet is literally the front page of the internet meaning its application of AI to search has an advantage, it has a military research wing, and so on. Alphabet was my bet, and it seems to have paid off, at least for now.
Overall
... then, of course, there are the blue chips, the other ETFs likely to pay off over time. I could have gone on for ages, but you should be able to see what the core of my investment philosophy is: is the company or industry relevant now, and is there enough of a case to suggest its relevance is likely to be sustained across the next 10 years. If the answer is 'yes', then I have to ask myself if I understand, or want to try to begin to understand, the company and industry it's in, and how it relates to global trends. This is why I don't bother with house builders in the UK - it's too boring and also complex for me to want to get into, so I avoid them, even if they will be relevant. Finally, the question comes to whether the price is right - and oftentimes I will pain over this until it's a bit late; but that is better than jumping in and making a mistake, at least as far as my personal risk appetite is concerned!
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