One of the biggest advantages of saving for retirement through a SIPP is that you can choose your own investments. These accounts typically offer access to a range of assets and you can select investments that align with your goals and risk tolerance.
Here, I’m going to pull back the curtain on my own SIPP and reveal four investments that form the bedrock of my retirement portfolio. I see these investments as solid, long-term plays and I’m counting on them to help me achieve financial independence.
My strategy
Before I reveal the investments, it’s worth discussing my investment strategy.
In my SIPP, I hold both investment funds and individual stocks. The funds provide diversification (and professional fund manager expertise) while the stocks offer the potential for higher gains in the long run.
Now, I still have decades until retirement. So, I’m comfortable taking on risk in the pursuit of strong long-term returns.
Quality is a focus for me, however. I like to invest in high-quality stocks, and funds focused on them, as history shows that they tend to outperform in the long run.
Fundsmith
In terms of funds, one I view as a core holding is Fundsmith Equity. Managed by Terry Smith, it has an approach that’s similar to Warren Buffett’s.
Recently, performance here has been underwhelming. Over the last five years, the fund has only returned about 45%.
The long-term performance track record is excellent, though. So, I plan to stay invested and will continue to buy more on market pullbacks.
Blue Whale Growth
Another core fund for me is Blue Whale Growth, which is managed by Stephen Yiu. This is a slightly racier growth fund, but it still focuses on quality.
I like this fund because it gives me something different. Often, Yiu picks stocks that are less well known.
This fund does tend to be quite volatile. But over the longer term it has done well, returning nearly 70% over the last five years.
I topped up my holding in the recent market pullback and plan to invest more during market weakness.
Microsoft
Turning to stocks, I see Microsoft as a core holding. One of the world’s largest tech companies, it gives me exposure to cloud computing, AI, and more.
I’ve held this stock for years and it has been a great investment. Last month, I bought some more shares near $350 and they’ve already risen about 30%.
At today’s share price, the stock looks fully valued. I plan to hold it for the long term though and I will continue to buy on pullbacks.
Alphabet
Finally, Alphabet (NASDAQ: GOOG) is another core holding for me. It’s the owner of Google and YouTube.
Many investors are writing this company off right now. They see ChatGPT and other GenAI apps as a major threat to its business model.
I don’t think Alphabet is going away any time soon, however. Recently, it has been adding a lot of powerful AI features to Google.
Meanwhile, it also has YouTube (huge potential here), a fast-growing cloud computing division, and its Waymo self-driving cars (I recently drove in one of these in Phoenix and it was phenomenal).
To my mind, this stock offers value today. Currently, the price-to-earnings (P/E) ratio is under 18.
I believe the stock’s worth considering at that valuation. I see growth at a reasonable price here.
