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I’m pretty happy with the size of my Stocks and Shares ISA and Self-Invested Personal Pension (SIPP) right now. Thanks to regular savings and strong investment returns in recent years, I’m on track for retirement.
Of course, like everyone else, I’d like to have more money stashed away – that would provide more financial security. So for a bit of fun, I asked ChatGPT how I could double the value of my portfolio.
ChatGPT’s strategies
The advice ChatGPT gave me was quite generic in nature. Its three main tips were:
- Increase my returns
- Increase my contributions
- Extend my timeline
Now, tip one makes sense. But the AI app didn’t give me any valuable insights on how to do this. For example, it said I should maximise my equity exposure. I’m already doing this however.
As for tips two and three, these are not very useful for me. Because I’m already contributing as much as possible into these accounts and I’m not looking to extend my timeline.
My take
So let’s forget about ChatGPT for a minute and talk about some other strategies I could employ to double the size of my account over time. Here’s a three-step strategy I think is more actionable:
- Remain invested for the long term as stocks have historically generated high returns
- Own a diversified portfolio to reduce company-specific risk and minimise the chances of big losses
- Allocate some capital to growth stocks with significant potential but size positions here carefully (keeping them small) so they don’t blow up my portfolio if things go wrong
With this kind of strategy I could potentially target returns of 10%-15% a year. How long would it take to double my money with this kind of return? Timeframes are shown in the table below (I did use ChatGPT for this).
| Annual return | Time to double (approx.) |
| 10% | 7.2 years |
| 11% | 6.5 years |
| 12% | 6.0 years |
| 13% | 5.5 years |
| 14% | 5.1 years |
| 15% | 4.8 years |
I’ve been buying this growth stock
One growth stock I’ve been buying lately in an effort to turbo-charge my returns is SkyWater Technology (NASDAQ: SKYT). It’s a small-chip manufacturer in the US that supports customers from early development to volume manufacturing.
There are a few reasons I’m bullish on this stock. One is that the company recently acquired Infineon’s ‘Fab 25’ manufacturing plant in Austin, Texas. This has added around 400,000 wafer starts a year of capacity, increasing its scale significantly.
Another is that the company is positioning itself to be a key manufacturing partner for quantum computing companies. In its most recent earnings, it said it had signed four quantum companies since the second quarter.
I also like the valuation. Next year, sales are expected to be $610m. Yet the market-cap’s only $805m at the moment. So the price-to-sales ratio’s only around 1.3.
Now, I need to point out that this stock’s higher up on the risk spectrum. One reason for this is that the company isn’t profitable today.
Given the risk level, I’ve kept my position size very small at less than 1% of my portfolio. So if things go wrong, the max I can lose is 1%.
If things go right however, I think I could potentially triple or quadruple (or more) my money here in the years ahead, so I like the risk/reward skew. If an investor has a high tolerance for risk, I think this stock could be worth a look.
