Picking the right stocks can really pay dividends, and if you happened to have picked some of the top performing ones five years ago, then you may well have found yourself in profit by as much as 4,501%.
Although investing consistently over the long term and making the most of your stocks and shares ISA is important, investors who made informed decisions on their stocks may find they have done well on some of their picks five years ago.
We reveal the top performing stocks over the last five years and just how much return you will have seen if you took a stake of at least £1,000.
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The stocks that have grown the most since 2018
These stocks, which may not come as a surprise to some investors, have had the strongest growth since 201, according to investment platform Saxo.
| Stock | Five-year growth |
|---|---|
| Enphase Energy | 4,501% |
| Tesla | 1,069% |
| ChemoMetec A/S | 1,039% |
| Advanced Micro Devices | 875% |
| Sea | 668% |
While second-placed Tesla is something of a household name, others may not be one that investors are commonly aware of - a useful reminder that sometimes the biggest returns can come from spotting businesses before they truly break out, something often overlooked by cautious investors.
How much cash would you have made with top stocks?
If you had put £1,000 in Enphase Energy stocks five years ago, you would now have £45,010 in your portfolio.
A £1,000 investment in Tesla would have made £10,690 since 2018.
ChemoMetec would have made you £10,390, Advanced Micro Device would have bagged you £8,750, and Sean would have earned you £6,680.
Past performance is no guarantee of future success
With all forms of investing it is important to bear in mind that past successes are no guarantee of further gains to come.
Just because certain stocks have had a fantastic few years, and delivered significant returns, that does not mean they will continue to deliver at the same rate ‒ or even at all ‒ for investors in the years ahead.
In fact, chasing stocks based on their previous gains can be an expensive mistake, should circumstances change and the business hits issues.
However, you can take lessons from individual stocks that have performed well, and apply those lessons when determining which stocks to invest in future. For example, there is a ‘green’ energy theme to the top two performing stocks according to the research, with Enphase Energy a manufacturer of renewable energy technology, and Tesla a manufacturer of electric cars.
With the UK’s push towards reaching net zero, it may be that certain businesses involved in this sector enjoy further success in the years ahead.
Making the most of your ISA allowance
If you really want to make the most of the returns from your investments, whether they are strong performers like Enphase Energy or not, then it is important to utilise your ISA allowance.
Everyone enjoys a £20,000 annual ISA allowance, which can be split across different types of ISA. The allowance runs from the start of the tax year, and can not be carried over.
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