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Yahoo
5 days ago
- Business
- Yahoo
Just turned 50? At retirement, investing £500 a month in a Stocks and Shares ISA could be worth…
Building wealth in a Stocks and Shares ISA is a proven strategy for securing a more comfortable retirement. And even those starting late at the age of 50, there's still plenty of time to leverage the tax advantages and grow a sizable nest egg, even with just £500 a month. Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions. Exploring the possibilities In 2025, the average retirement age is around 65. And assuming an investor intends to start enjoying retirement at this age, a 50-year-old today has 15 years to financially prepare. When it comes to UK shares, the average long-term return investors have come to expect is around 6-8% a year for the more popular large-caps found in the FTSE 100. And investing at these rates with £500 a month for 15 years is sufficient to build a nest egg worth anywhere between £145,410 and £173,000. That's almost double the total £90,000 in deposits that will have been made during the period. While this sum of money is certainly nothing to scoff at, it's hardly sufficient to live a luxurious lifestyle. After all, the estimated retirement income needed to support just a moderate lifestyle is £31,700 a year in 2025. And due to inflation, that number's likely going to be higher come 2040. Boosting performance One of the easiest ways to ensure a larger nest egg is to simply contribute more. Doubling the monthly contributions to £1,000 is enough to boost a Stocks and Shares ISA to as high as £346,000. However, what if investors could also earn more than an 8% annualised return? By adopting a stock-picking strategy, that might be possible. Investing exclusively in the best and brightest of businesses opens the door to amplified portfolio returns. And that's something the shareholders of Cranswick (LSE:CWK) have experienced first-hand. Through a combination of market leadership alongside consistent and strong financial execution, the food production enterprise has emerged as one of the best-performing companies in its industry. And in just the last 15 years, the stock's gone on to deliver more than a 500% total return, averaging 12.8% on an annualised basis. At this rate, a £500 monthly investment would have grown to £270,000, while a £1,000 monthly investment would now be worth £540,000. Needless to say, these are substantial differences compared to the results achieved by index funds. Taking a step back In 2025, Cranswick continues to be a compelling investment opportunity. Its latest trading update included a welcome upgrade to its medium-term targets with management now targeting underlying operating margins of 7.5%, up from 6%. And as the firm continues to become more cash generative, Cranswick's still slowly expanding its market share through smart capital allocation. With that in mind, it isn't surprising to see overwhelming positive sentiment coming from institutional investors. However, while opinions are bullish, Cranswick still has its weak spots. The firm operates in a highly regulated market with food safety requirements constantly in flux. Cranswick's also highly dependent on UK retail customers, creating concentration risk. And it's recent expansion into pet food through its 2022 acquisition of Grove Pet Foods, there are also strategic execution risks to consider. Nevertheless, given its impressive track record, investors building retirement wealth in a Stocks and Shares ISA may want to take a closer look. The post Just turned 50? At retirement, investing £500 a month in a Stocks and Shares ISA could be worth… appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
Yahoo
08-07-2025
- Business
- Yahoo
The 'new normal' of growth stock dominance
It pays to be big. And it's a good time to be on team growth. A key insight from recent years — from the pandemic crisis through the "Liberation Day" turmoil — is that the most well-capitalized and growth-oriented names are outperforming their counterparts. Investors who tend to favor small-cap and value stocks, because of their time horizon, risk appetite, or other preferences, might point to earlier periods of trading to show the merits of their strategy. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Last year notably featured glimmers of a small-cap revival. A broadening of the stock market rally, optimistic economic forecasts, and expectations of Fed rate cuts bolstered the case for the double-A and triple-A tickers that don't always get the major league limelight. But the call for small caps turned out to be short-lived, ill-suited for the trade conflicts of 2025 and the wait-and-see posturing of the central bank. In fact, the performance gap between US large and small caps has widened considerably over the last two-and-a-half years, according to a new analysis by DataTrek co-founder Nicholas Colas, who wrote in a recent note to clients that the duration of the relative outperformance suggests it's structural rather than cyclical. "Relative return data suggests that there is a 'new normal' at play in US stock markets, one where large caps and Growth have the upper hand versus small caps and Value," he wrote. "Moreover, enough time has passed that these differences look durable rather than being temporary anomalies." Big Tech's steadfast march to higher valuations has played a major role in the stock market's lopsided behavior. But the growth of the Magnificent Seven is only part of the story. While a broadening rally hasn't unfolded in the way small-cap proponents had hoped, the spoils of AI excitement have flowed to many other players aside from the mega-rich tech platforms. As my colleague Josh Schafer has reported in this newsletter, AI chip and data center trades not named Nvidia (NVDA) have posted some of the highest gains in the S&P 500 (^GSPC). Investments in AI energy and cloud tickers have payed off too. That's probably cold comfort for close watchers of the Russell 2000 (^RUT), which has underperformed the broader market this year, posting a loss of about 1% compared to the S&P's 6% gain. It's difficult to imagine market sentiment shifting away from Big Tech, especially amid the fresh trade uncertainty unleashed on Monday. Rejuvenated bulls see even greater gains ahead, motivated in part by the seeming invincibility of the tech trade, itself a kind of defensive play to weather realigned global trade. For a certain investor, large caps and growth names have been a part of the portfolio worth prioritizing and fussing over. Halfway into this pandemic decade and this chaotic trading year, they are increasingly the only one. Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban. Click here for in-depth analysis of the latest stock market news and events moving stock prices Sign in to access your portfolio
