The 1 stock I’m buying for my Lifetime ISA to try and beat the stock market in 2024

Stephen Wright thinks the advantages of a Lifetime ISA are too good to pass up. And there’s one stock in particular he’s buying this year.

| More on:
Calendar showing the date of 5th April on desk in a house

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

I’m a big believer in the merits of the Lifetime ISA (LISA). Each new financial year, my top priority is making sure I use the full £4,000 contribution limit.

The next question is which stocks to buy. And unlike my other investing, there’s typically only one company on my list when it comes to my LISA.

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.

Outperforming the market

Beating the stock market over a long period’s extremely difficult. But investing using a Lifetime ISA gives me a big advantage that I think changes the equation in my favour.

Whenever I add cash to my ISA, I receive a 25% boost from the government. So if I deposit the full £4,000 in a year, I get a total of £5,000 to invest. 

As a result, if I can do better than 75% of the overall market’s return, I’ll achieve a better end result than if I’d invested £4,000 in an index fund. And this changes how I think about what to buy.

When I buy shares using my LISA, I’m looking to keep my risk lower than I would elsewhere. And that points me firmly in the direction of one particular stock.

Berkshire Hathaway

As billionaire investor Warren Buffett notes, the way Berkshire Hathaway‘s (NYSE:BRK.B) run makes it unlikely to be the top-performing stock in any given year. But it’s also extremely unlikely to do badly. 

The company owns a diversified portfolio of businesses, including a railroad and a utilities operation. Many of these are limited by regulation, but their cash flows are highly predictable as a result.

Berkshire’s insurance operations expose it to a risk of significant losses in the event of a natural disaster. But the excess cash on the firm’s balance sheet puts it in a stronger position than its rivals. 

I think this makes Buffett’s company the perfect stock to buy in my Lifetime ISA. If I had to predict one company to generate solid returns consistently for the next 30 years, it would be this one.


Ordinarily, I’d look to diversify my investments to try and limit the damage to my portfolio if anything goes wrong with one particular company. But I’m focusing on Berkshire in my Lifetime ISA.

There are a couple of things to note though. One is Berkshire’s shares bring a degree of inbuilt diversification with its insurance, railroad, and utilities subsidiaries part of a much bigger picture.

Another is that my LISA is only part of my overall portfolio. In my regular Stocks and Shares ISA I own other stocks and this goes some way towards diversifying my investments as a whole.

Berkshire Hathaway however, has an unusual set of advantages over other companies. And the fact it doesn’t pay a dividend – and I don’t expect it to – makes it a natural choice to use in my LISA.

Cashing out

The last point’s important. I can’t easily withdraw cash from my LISA until I retire, so aiming for passive income to boost my buying power next year isn’t a realistic option.

Instead, I concentrate on buying shares in companies I think are most likely to do well over time. And, realistically, that means Berkshire Hathaway.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Stephen Wright has positions in Berkshire Hathaway. 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.

More on Investing Articles

Young Black man sat in front of laptop while wearing headphones
Investing Articles

Investing just £10 a day in UK stocks could bag me a passive income stream of £267 a week!

This Fool explains how investing in UK stocks rather than buying a couple of takeaway coffees a day could help…

Read more »

Investing Articles

A cheap stock to consider buying as the FTSE 100 hits all-time highs

Roland Head explains why the FTSE 100 probably isn’t expensive and highlights a cheap dividend share to consider buying today.

Read more »

Investing Articles

If I were retiring tomorrow, I’d snap up these 3 passive income stocks!

Our writer was recently asked which passive income stocks she’d be happy to buy if she were to retire tomorrow.…

Read more »

Investing Articles

As the FTSE 100 hits an all-time high, are the days of cheap shares coming to an end?

The signs suggest that confidence and optimism are finally getting the FTSE 100 back on track, as the index hits…

Read more »

Investing Articles

Which FTSE 100 stocks could benefit after the UK’s premier index reaches all-time highs?

As the FTSE 100 hit all-time highs yesterday, our writer details which stocks could be primed to climb upwards.

Read more »

Investing Articles

Down massively in 2024 so far, is there worse to come for Tesla stock?

Tesla stock has been been stuck in reverse gear. Will the latest earnings announcement see the share price continue to…

Read more »

Young Caucasian woman with pink her studying from her laptop screen
Dividend Shares

These 2 dividend stocks are getting way too cheap

Jon Smith looks at different financial metrics to prove that some dividend stocks are undervalued at the moment and could…

Read more »

Investing Articles

Is the JD Sports share price set to explode?

Christopher Ruane considers why the JD Sports share price has done little over the past five years, even though sales…

Read more »