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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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.
-
Why Chinese stocks are so far out of favourThere’s little appetite for Chinese stocks despite low valuations.
-
The 62 UK areas where you could be priced out of using your Lifetime ISASaving for your first home in Croydon, Ealing, Brent or any one of these other locations? You could be at risk of being priced out of using your Lifetime ISA
-
Where to invest in the metals that will engineer the energy transitionA professional investor tells us where he’d put his money. This week: John Ciampaglia, manager of the Sprott Energy Transition Materials UCITS ETF.
-
Three British stocks offering all-weather incomeTips A professional investor tells us where he’d put his money. This week: Brendan Gulston, co-manager of the LF Gresham House UK Multi Cap Income Fund.
-
Incredible India: the world’s biggest democracy is set for decades of growthOpinion A professional investor tells us where he would put his money. This week: Gaurav Narain, manager of the India Capital Growth Fund, selects three favourites.
-
5 travel stocks to buy ahead of the busy summer holiday periodTips The travel sector is rebounding following a tough two years due to the pandemic and Russia’s invasion of Ukraine. We look at five travel stocks to buy that could benefit.
-
3 success stories set for long-term growthTips A professional investor tells us where he’d put his money. This week: Felix Wintle, manager of the VT Tyndall North American Fund, selects three favourites.
-
3 VCTs to consider as we near the end of the tax yearTips Venture Capital Trusts come with risks, but offer generous tax allowances that could entice investors ahead of the tax increases coming in April.
-
Profit from the rise of shareholder activism in Japan’s small companiesTips A professional investor tells us where he’d put his money. Daniel Lee, head ofJapan Research, AVI Japan Opportunity Trust, highlights three promising stocks.
-
3 stocks to buy in a high interest rate environmentTips We take a look at three stocks to buy in a high interest rate environment that should be able to navigate economic uncertainty.
