My friend made £11k from one stock, but I’m sticking to my plan (through gritted teeth)

Imogen Tew
I’m tempted to add a few single stocks to my portfolio in the hope that I’ll get my Nvidia moment - Heathcliff O'Malley

Telegraph Money’s Millennial Investor Imogen Tew, 28, has a new baby and hopes to buy a bigger house. After years of neglecting her portfolio, she needs help to become a better investor. Can you offer her any words of wisdom?

I’ve never been very good at resisting the “fear of missing out” – more commonly known as Fomo. If two events clash, I’ll do everything in my power to make an appearance at both, even if it doesn’t make sense logistically and I end up spending more time travelling between the parties than actually enjoying them.

When it comes to investment decisions, I’ve tried to be stronger. My husband convinced me to buy Bitcoin back in 2021, when the cryptocurrency’s hype was at its strongest. We gave up and sold for a loss a few years later when it felt like we had bought at the peak. Besides that, I’ve been sensible and followed the golden rules.

I have a rainy day fund, a well-diversified portfolio within a tax wrapper, a pension and I don’t spend more than we bring home (most months). As far as the financial planners are concerned, tick tick tick.

For the past week, however, my Fomo has been nagging me. At the pub, my friend mentioned that his portfolio had been doing rather well, by which he means making thousands and thousands of pounds. I asked him what funds he was invested in.

“Funds? I only do single stocks.”

He has owned Nvidia, the computer chip designer turned AI superpower, for three years and has made about £10,700 from his original stake – a return of 550pc.

He’s also made £1,200 (365pc) from Rolls-Royce. There are others that have done well, he said, but these are the “decent wins”. His main loss is on Chinese tech company Alibaba, which has dropped about £200 (16pc).

He is faring better than me. My best performing fund is Fidelity Index World, a global tracker fund, which is up 35pc and has made me about £1,000. I’ve lost 41pc on my Baillie Gifford China fund, my biggest loss, and 34pc on Amati UK Listed Smaller Companies.

My rational side understands that knowledge, timing and a sprinkling of luck play a huge part in my friend’s success. I also know that he hasn’t actually made this money until he cashes out (although he has taken his original stake, so only profit is at risk).

A set of quarterly results that confirmed the company would be increasing its chip production to meet surging demand in the spring of 2023 spiked Nvidia’s share price, which has moved skyward ever since.

If this hadn’t happened, my friend’s portfolio would look very different. But my irrational side, or my Fomo, is screaming at me to add a few single stocks to my portfolio in the hope that I’ll get my Nvidia moment.

For now, however, I’m going to play it safe. While investing in single stocks is certainly not gambling the same way buying a cryptocurrency is, this is only really true for those that have the time and knowledge to track the news flow of those companies.

With a young baby at home and work that keeps me plenty busy, I can’t guarantee that I would be able to keep on top of trading performance and broker forecasts. There’s also the risk with single stocks that you could lose the lot. Take “safe” bank stocks in 2007-08, where in many cases 90pc of an investor’s money was wiped out.

It’s worth mentioning that, in a less extreme way, my portfolio benefited from Nvidia’s rising share price as well. Nvidia is listed in the US and I have hefty exposure to US markets thanks to my two global tracker funds. It also makes up about 10pc of the Blue Whale fund, which I also have money in, so any win for Nvidia is a win for me.

But in my portfolio any “win” is diluted. I’m slowly moving towards a portfolio structure where 60pc is in “core” investments (my global tracker funds) and the remaining 40pc is in “satellite” holdings, which are typically riskier.

This provides me with the diversification to ride out any big losses – my China fund is struggling at the moment but my investments are up overall because it forms a small part of my portfolio – but it also dampens any big wins.

Take the Nvidia example. The company’s share price is up nearly 200pc in a year, and it barely moves the needle in my portfolio. And overall, she says through gritted teeth, I think this is a good thing.