In fact, even someone who’s just turned 40 with zero savings can potentially turn this dream into a reality, securing a far more comfortable long-term lifestyle of financial freedom.

But how big does a SIPP need to be? And how much money is needed to build it?

Aiming for a £5,000 retirement income

As a general rule of thumb, investors should aim to withdraw no more than 4% of a retirement portfolio each year. So if the income target is £60,000 a year, then a portfolio would need to be roughly £1.5m.

Obviously, that’s a pretty substantial chunk of change. But by drip feeding £750 each month into a SIPP and earning a 10% annualised return in the stock market, this wealth-building journey can be completed in roughly 27 years – just in time for retirement.

Don’t forget, any money deposited into a SIPP receives tax relief from the government. So anyone paying the Basic rate of income tax automatically receives a 20% top up, turning £750 into £937.50. And after 27 years of compounding at 10%, a retirement portfolio will grow to £1,542,846.

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.

Earning 10%+ returns

On average, the UK stock market has historically generated 8% annualised returns for investors over the long run. Therefore, in order to enjoy gains closer to 10%, investors will have to turn to a stock-picking strategy rather than an index-investing one. And when executed correctly, the results speak for themselves.

Let’s take a look at the shipping broker Clarkson (LSE:CKN) as a prime example.

Over the last 27 years, this critical shipping logistics group has evolved into a global titan. And shareholders who bought and held through this journey have enjoyed an impressive 7,174% return. But for anyone who reinvested dividends, the profit is actually a jaw-dropping 20,252%!

That’s the equivalent of a 21.8% annualised gain – more than double our target of 10%. And drip feeding £937.50 into Clarkson shares each month since March 1999 has built a £14.1m SIPP – enough to unlock £562,195 annual retirement passive income!

Still worth considering?

With its market-cap now sitting north of £1bn, Clarkson isn’t likely to deliver another 203x return between now and 2053. But that doesn’t mean the growth story’s over.

Shipping remains essential for the global economy – a structural demand driver that isn’t likely to disappear anytime soon. And in 2026, the firm’s broking and analytics solutions are proving more essential than ever as businesses seek to navigate the geopolitical chaos of the Iran war.

However, as 2025 demonstrated perfectly with a near-20% single day sell-off in March, the firm’s revenue stream remains almost entirely tied to global trade volumes. Slowdowns in emerging market demand, or tariff-induced trade disruptions, can quickly compress earnings.

This cyclical risk’s unavoidable when investing in a business like Clarkson. Nevertheless, management’s demonstrating an incredible knack for navigating such tough times, even with a leveraged balance sheet.

So for investors looking to outpace the UK stock market over the long run inside a SIPP, Clarkson may be worth mulling. And it’s not the only promising business I’ve got my eye on right now…

The post How much do you need in a SIPP to aim for a £5,000 monthly retirement income? appeared first on The Motley Fool UK.

The size of this relief ultimately depends on which income tax bracket an investor falls into. But for someone paying the Basic 20% rate, leveraging the power of a SIPP with just £500 a month could unlock a nest egg of over one million pounds!

Here’s how.

Crunching the numbers

£500 after 20% tax relief translates into £625 of capital to invest in the stock market. For those wanting to keep things as simple as possible, drip feeding money into an index fund can have a profound impact on wealth.

For example, let’s say an investor buys £625 worth of shares in a FTSE 100 tracker each month starting from today. We’ll also assume that the UK’s flagship index continues to deliver an 8% annualised return over the next 25 years.

By 2050, this investor would have deposited a chunky £150,000. However, thanks to the magic of compounding, their SIPP would be worth a staggering £594,391.50.

That means even a 40-year-old investor starting from scratch today can build a retirement nest egg worth almost six times the £107,300 the average 65-year-old has today.

But this could be just the tip of the iceberg.

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.

The power of successful stock picking

Rather than relying on boring index funds, investors can opt to get their hands dirty and invest directly in individual businesses. There’s no denying this comes with more risk and demands far more discipline. But when executed correctly, the results are life-changing.

A perfect example of this over the last 25 years is Clarkson (LSE:CKN). Today, Clarkson’s one of the largest shipbrokers in the world, allowing businesses to transport materials and goods across the planet, as well as gain access to crucial data and analytics, among other services.

Global trade volumes have expanded drastically over the last 25 years. And during this time, shipping has only gotten more complicated due to evolving supply chains, geopolitical conflicts, and sanctions.

This growing level of complexity has made it far harder for smaller shipbrokers to compete. And subsequently, through continuous bolt-on acquisitions, Clarkson’s been consolidating the market into its perceived safe hands.

The result? Twenty-three years of consecutive dividend increases which, when reinvested, have generated an average annualised return of 17.8%. That’s enough to transform £625 each month for 25 years into a staggering £3,449,737.54.

Put simply, successful stock picking can be the difference between earning £600k and £3.5m!

Still worth considering?

In 2025, Clarkson continues to deliver solid performance even with a less-than-ideal macroeconomic environment. And with a market-cap still at only £1.2bn, the firm has plenty more room to grow.

Having said that, expecting further near-18% annualised returns might be a bit too ambitious. What’s more, the company’s benefited massively from globalisation, but as nations like the US now lean more towards protectionism, global trade volumes could suffer, harming Clarkson’s growth.

These are risks investors need to consider carefully. However, given its quality and experienced leadership, I still think this FTSE stock could offer some pleasant long-term performance inside a SIPP.

The post Not using a SIPP? Here’s how much money you could be missing out on… appeared first on The Motley Fool UK.

The power of a SIPP

Let’s say an investor’s just turned 40. And following a brief mid-life crisis, they’ve decided retirement planning is essential before they turn 67. So much so that they’re going to start putting aside £850 each month to fund a SIPP.

Unlike a general investment account or ISA, SIPPs provide tax relief on deposits equal to an individual’s income tax band. That means someone paying the basic rate of 20% will receive a 20% top-up from the government on each deposit, transforming a £850 lump sum into £1,062.50.

Investing this capital each month at the stock market average rate of 8% will grow a pension portfolio into an impressive £1,212,717 after 27 years. Following the 4% withdrawal rule, that translates into a retirement income of £48,509 a year.

Topping it up with the £11,973 from the UK State Pension brings the total to £60,482 a year. But while earning £60k can go a long way today, that’s not likely to be the case 27 years from now due to inflation. Luckily, this is where stock picking offers a potential solution.

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.

Investing for the long run

Rather than using index funds, investors can take control and craft a custom portfolio of only the best businesses. This process is far more hands-on and undeniably comes with more risk. But it can also open the door to phenomenal returns.

Looking back at the last 27 years, Clarkson (LSE:CKN) is a perfect example of how stock picking can deliver game-changing returns.

Since 1998, the shipping brokering business has delivered a jaw-dropping 14,505% total gain. That’s the equivalent of 20.3% a year. And anyone who invested £1,062.50 each month into Clarkson shares over the last 27 years is now sitting on a staggering £14.3m. Fun fact: that’s enough to earn £573k a year without needing to lift a finger!

Still worth considering?

Today, Clarkson is the largest shipping service provider in the world. And it plays a critical role across multiple tailwinds, including offshore wind power deployment, shipping re-routing, fleet financing, and even global vessel upgrades.

Yet, shipping’s also a cyclical sector. US tariffs and growing geopolitical tensions have already had an adverse impact on demand. And with freight rates starting to drop, Clarkson’s broking revenue has suffered, causing some volatility in its share price. And given that the stock trades at a premium, more volatility could be on the horizon. Even more so if seaborne volumes continue to suffer in the near term.

Nevertheless, given Clarkson’s impressive track record of navigating down cycles, these drops might be lucrative long-term buying opportunities. Having said that, with a market-cap now above £1bn, its days of delivering 20% annualised returns might be in the rear view mirror.

So while I think this FTSE stock’s definitely worth investigating further, investors hunting for such strong double-digit gains may need to look elsewhere. Fortunately, there are plenty more exciting growth opportunities to explore today.

The post Worried about retirement? Investing in a SIPP could unlock a life of luxury. Here’s how appeared first on The Motley Fool UK.

Yet, those concerns need to be taken seriously. Rising inflation and signs of economic slowdown are troubling on their own. With fiscal challenges in Western economies mounting, and war threats rising in Europe and the Middle East, the outlook for markets is especially precarious.

A stock market crash is by no means certain, of course. But it pays to be prepared, by reviewing one’s portfolio for risk, and by building a list of stocks to buy if equities retrace. While unnerving, price corrections also provide some of the best opportunities to buy great companies on the cheap.

Here are two stocks I’ll look at buying if share markets plummet.

AG Barr

AG Barr‘s (LSE:BAG) shares have risen 10% in the year to date. This means they change hands on a forward price-to-earnings (P/E) ratio of 16.1 times.

That’s above a reading of roughly 13 times for the broader FTSE 250. And it’s a premium I’m not willing to pay right now.

Barr makes some of the UK’s most popular soft drinks like Irn Bru and Rubicon. They benefit from exceptional brand power that keeps them in high demand even during downturns. Indeed, latest financials showed revenues up 3.1% in the six months to July, even as broader pressure on consumers’ wallets endured.

The drinks maker can therefore be a great stock to buy to enhance a portfolio’s robustness. Having said that, I am concerned about its growth prospects compared to rivals like Coca-Cola CCH, given its lack of a significant international presence.

For this reason, I’m happy to sit on the sidelines for the moment.

Clarkson

Clarkson‘s (LSE:CKN) share price has headed in the oppositive direction in 2025, down 7% since 1 January. Trade tariffs have exacerbated economic pressures and regional conflicts have emerged, causing weakness across the shipping market.

It’s perhaps no surprise that the shipbroker has slumped in value. It’s a drop that’s caught my attention, but not roused my appetite to consider opening a position. A forward P/E ratio of 17.3 times is still a bit high for me given ongoing risks.

I’ll take a fresh look if Clarkson’s shares reverse again, however. As the world’s largest shipbroker, it’s in pole position to capitalise on improving trade flows when the economy picks up. A dearth of new shipping supply in recent years will give freight rates a huge shot in the arm too when the recovery happens.

The FTSE 250 company also stands to capitalise from the rapid energy transition. This is driving segments like LNG carriers and vessels that support offshore wind farms, and provides significant long-term earnings opportunities.

The post 2 stocks I’ll look to buy in the event of a stock market crash appeared first on The Motley Fool UK.

But 250 is a lot to sift through. So, to narrow down my options, I asked ChatGPT for the best FTSE 250 comeback stock.

Here’s what the AI chatbot came up with.

The pick

After its usual chatty preamble, where it buttered me up by using my name and saying I was smart to consider the mid-cap index, ChatGPT plumped for shipbroker Clarkson (LSE:CKN).

Now, in the past, the bot has made glaring mistakes when I’ve asked it stuff like this. For example, it has highlighted penny stocks that were trading above £3 per share and comeback stocks that were near all-time highs (i.e., nothing to come back from).

However, this time I was pleased that Clarkson is indeed in the FTSE 250, and that its share price is down 21% since February. That’ll do, criteria matched.

Global powerhouse

It described the company as not just a shipbroker, but a “global powerhouse in maritime services”, offering research and intelligence, finance and advisory, port services, and green-shipping solutions.

I’d say this is accurate, as Clarkson operates from 67 offices in 25 countries on six continents. It says it plays “a vital intermediary role in the movement of the majority of commodities around the world”. 

ChatGPT pointed to Clarkson’s resilience last year. Despite a challenging global trading environment, revenue increased 3.4% to £661.4m, with an underlying pre-tax profit of £115.3m.

Meanwhile, the annual dividend was hiked for the 22nd consecutive year. The forecast dividend yield is a respectable 3.2%.

Another thing the generative genie mentioned was that there was significant insider buying in May. Two directors bought over £200k worth of shares between them, with the last purchase made at similar price to the current level. 

Obviously, this is encouraging, as it means these insiders think the shares are undervalued.

Where’s the comeback?

ChatGPT’s comeback case seems to just centre around cyclicality: “Shipping markets are notoriously boom-bust, and Clarkson tends to rebound strongly when trade activity picks up again“.

It failed to mention that tariffs are causing incredible volatility in the global shipping industry. In its recent H1 report, Clarkson said it was navigating a “highly complex global environment”, amid a “backdrop of shifting economic conditions and evolving trade dynamics”. This is where the main risk lies.

However, there’s also opportunity to help customers navigate this volatile environment. For instance, complex trade rules mean more clients need advisory guidance on hedging and compliance.

Consequently, its data services are in hot demand, while it’s rolling out AI solutions for its digital shipping platform (called Sea). 

Our presence and reach in all key shipping markets means we are uniquely placed to help our clients navigate uncertainty and capitalise on emerging opportunities.

Clarkson

Quality compounder

I think this is a solid pick from the bot, though I wouldn’t go as far as saying Clarkson is the best comeback candidate in the whole FTSE 250. It’s only down 8% over one year.

The stock is trading at 15 times forecast earnings, which isn’t too pricey. All said and done, I see this as a quality compounder worth considering.

The post I asked ChatGPT for the best FTSE 250 comeback stock. Here’s what it said appeared first on The Motley Fool UK.

Yet that is exactly what I am doing. In fact, not only have I been hunting, I have been buying.

Here are a couple of reasons why I think now could turn out to be a lucrative moment for doing that.

1. One share does not make a market

In the past few years, a lot of stock market commentary has focussed on just a few shares, like Apple and Nvidia.

Their strong performance for much of that period had a big impact on how the S&P 500 did. The same has happened this year, just in the other direction.

As an investor, though, I am not ‘buying the index’.

I could if I chose to, for example, by investing in an index tracker fund. Instead, I prefer to buy individual stocks that I think are significantly undervalued relative to their long-term business prospects.

No matter how well or poorly the stock market may be doing overall, at any one moment some individual shares are likely overpriced, while others are potential bargains.

2. The unknown is harder to price than the known

A lot of the recent volatility in the stock market is easily explained. Both buyers and sellers are uncertain about what will happen next in key economic markets and what it may mean for companies’ financial performance.

I think many investors have focussed too much on trying to price those uncertainties. Instead, I think it’s better to price what is at least well-established, if not certain.

As an example, consider storied shipbroker Clarkson (LSE: CKN). Its share price has fallen 16% so far this year.

There are indeed uncertainties here. Tariffs could hurt demand for shipping. Customers may try to take advantage of weaker shipping demand by asking for lower rates. Increasingly erratic US policy on port charges could make it hard for brokers to match demand with supply.

But, as I see it, a lot of relevant facts for the Clarkson investment case are both well-established and easy to consider.

Global seaborne trade is huge and likely to remain that way. Ship owners, operators, and shippers need efficient ways to match cargo demand with empty space.

Clarkson has the contacts, expertise, trusted name, and customer base on both sides of the deal to play an important role in shipbroking not only for years but likely decades to come.

Part of the advantage a long-term investor enjoys in the stock market, even if only putting a few hundred pounds to work, is that they can find stocks to buy and hold based on an analysis of the long-term outlook, not short-term noise.

The post Looking for cheap stocks to buy? 2 reasons now might be the ideal moment! appeared first on The Motley Fool UK.

Any business that can do this shows the sort of reliability that many higher-yielding stocks lack, making the former an arguably less risky proposition.

With this in mind, I’ve picked out three examples from the FTSE 250 for Fools to ponder buying.

Uninterrupted growth

As a business, meat supplier Cranswick (LSE: CWK) isn’t remotely sexy. But it’s been a wonderful source of rising and uninterrupted dividends over the years. Even a global pandemic couldn’t stop management from returning more cash to shareholders.

A “record Christmas trading period” suggests this form shows no sign of ending. I also like how Cranswick’s vertically integrated business model gives it a significant amount of control over its supply chain.

So what are the downsides? Well, Cranswick shares yield just 2%. A valuation of 18 times forecast FY25 earnings, while not exactly frothy, could also come back to haunt new buyers. That’s if inflation bounces for longer than expected or there are any unexpected operational disruptions.

Still, I see no reason why it can’t continue to outperform its index over the long term. The shares are up almost 47% in five years compared to a near-6% rise in the FTSE 250. And that’s not including the income investors will have compounded over that period.

Profits (and dividends) jump

Wealth manager Rathbones (LSE: RAT) is another dividend-growth superstar. Out of interest, it announced some analyst-beating full-year numbers yesterday (26 February).

Underlying pre-tax profit hit £227.6m in 2024. That’s a rise of 79% compared to 2023 — no mean feat considering the multiple headwinds it faced last year, including a change of UK government and armed conflict in the Middle East.

A lot of this uplift is down to what appears to be a very successful integration of Investec Wealth and Investment (UK) with only 0.3% of the latter’s clients declining to move to Rathbones.

But it’s the 6.9% uplift to the final dividend that caught my eye, bringing the full payout to 93p per share. That gives a yield of 5.6% at the current share price.

Dividends can never be guaranteed, especially if they operate in a cyclical sectors such as finance. But Rathbones has shown itself to be more reliable than most of its peers.

Trading ahead

A final FTSE 250 stock to consider is shipping services provider Clarkson (LSE: CKN). The 2.5% forecast yield isn’t huge. However, at least some of this is down to the share price enjoying some great positive momentum. It’s up 14% in 2025 so far, significantly outperforming the index.

Much of this movement has come thanks to an encouraging, if exceptionally brief, recent update. Back on 10 January, the firm announced that full-year numbers for 2024 would now be “slightly ahead of current market expectations” with underlying pre-tax profit coming in at “not less than £115m“.

One key risk here would be an increase in global trade tensions. However, knowing that Clarkson managed to weather the storm during President Trump’s first term in the White House bodes well. In fact, it recently registered 21 years of consecutive dividend growth!

The post 3 reliable FTSE 250 shares to consider buying for rising passive income appeared first on The Motley Fool UK.

Clarkson

Helped by strong trading news in early January, Clarkson‘s (LSE:CKN) share price is up a healthy 10.4% since the start of 2025.

And despite the threat of global trade wars, I think the shipbroker could have further to go.

Last month’s update showed that Clarkson expects full-year underlying profits to be “slightly ahead of current market expectations“. The firm’s impressive form is due to a variety of factors, including strong sale and purchase activity in the newbuild and second-hand markets, and robust charter rates.

With supply growth issues persisting, the outlook for charter rates in the short-to-medium term looks robust as well.

Clarkson is a share I think patient investors should consider buying. Its share price might experience turbulence during economic downturns. But over a longer time horizon I expect it to grow, supported by the significant structural opportunity of rising global trade.

At £43 per share, Clarkson’s share price has near enough doubled in the last decade alone.

The broker’s enduring commitment to raising dividends provides a not-insignificant bonus for investors, too. In 2023, it increased cash rewards for the 21st straight year. It’s a record City brokers expect to continue for the next few years at least, too, resulting in a healthy 2.6% dividend yield for 2025.

Clarkson shares trade on a forward price-to-earnings (P/E) ratio of 15.5 times. This isn’t exactly cheap on paper, but in reality I think it’s good value given the firm’s leading role in a growing market.

Babcock International

Positive noises around defence spending have helped Babcock International (LSE:BAB) gain value in 2025 too. At 545p per share, this FTSE 250 stock is up 8% since New Year’s Day.

Babcock provides an array of training and engineering services to armed forces around the globe. Since war broke out in Eastern Europe in 2022, it’s witnessed a significant pick-up in business. Latest financials showed revenues up 11% between April and September.

The geopolitical landscape has become even more dangerous during the last few years. What’s more, Donald Trump has reclaimed the US Presidency. It’s a blend that could support further strong growth in Babcock’s sales.

Trump’s demand that NATO countries raise defence spending to 5% of their GDP could be especially significant. Members of the defence bloc currently only spend 2%, leaving room for substantial growth. As well as the UK, Babcock provides services to fellow NATO members Canada and France.

Cost overruns remain a constant threat to businesses like this. Just last year, Babcock absorbed a £90m charge due to higher costs of building Type 31 frigates for the Royal Navy.

But a bright demand outlook still makes the company an attractive stock to consider. And given its sub-1 price-to-earnings growth (PEG) ratio of 0.3, I think it’s worth a particularly close look from lovers of value shares.

The post 2 flying FTSE 250 shares to consider buying in February! appeared first on The Motley Fool UK.

However, with economic conditions improving throughout 2024, the index has delivered some impressive returns year-to-date. Since January, the FTSE 250’s up around 11% including dividends. But how much money could investors have made if they bought an index tracker fund at the height of the pandemic in March 2020?

Capitalising on a market crash

When lockdowns were deployed around the world, the stock market crashed. In the case of the FTSE 250, the index tumbled by almost 40% between 20 February and 20 March 2020. However, as prudent long-term investors know, buying when stocks are in freefall can be a lucrative strategy to capitalise on the eventual recovery.

In the case of the FTSE 250, since its Covid lows, the index has gone on to generate a 52% return. However, when the extra returns generated from dividends are included, the total gain for patient investors is closer to 82%. In other words, If I’d invested £5,000 in a low-cost FTSE 250 index fund, I’d have around £9,100 today.

That roughly translates to a 16.2% annualised return. And considering that’s almost triple the average return generated by this index over the last decade, it goes to show that capitalising on market volatility can be very lucrative in the long run.

However, the returns for stock pickers may have been even greater.

Seeking higher returns

Instead of buying shares in a passive index fund, investors can take matters into their own hands and consider investing in individual businesses directly. This does require a far more hands-on approach and dedication towards research and portfolio management. But this higher risk comes paired with the potential for generating market-beating returns.

That’s certaintly been the case with Clarkson (LSE:CKN). The global shipping services firm saw its operations disrupted as the pandemic decimated supply chains. However, the group’s cash-rich, low-debt balance sheet gave it all the financial resources needed to weather the storm. And as supply chains were repaired, demand for international shipping services rebounded.

As such, the FTSE 250 stock’s up just over 90% over the period, or 125% after including the impact of dividends. That’s the equivalent of a 22.5% annual average return, which would have grown a £5,000 initial investment to over £11,200.

Shipping is a notoriously cyclical industry with a lot of moving parts. Freight rates have started to fall in recent months as the shipping industry adapts to the ongoing conflict in the Red Sea. As such, Clarkson’s profits, in the near term, could start to slow. In other words, maintaining this double-digit return for new shareholders today seems unlikely.

Nevertheless, it goes to show that by researching the right businesses, investors can potentially unlock far superior returns, especially when buying during periods of economic uncertainty.

The post £5,000 invested in a FTSE 250 index fund during Covid would be worth this now appeared first on The Motley Fool UK.

That said, there is one part of the economy that I’ve had my eye on. The maritime industry has been in the news lately amid rising geopolitical tensions and higher supply chain costs.

Once I saw a beaten down FTSE 250 stock in that industry, I had to investigate: the good, the bad, and the ugly.

Industry I like

Clarkson (LSE: CKN) is an integrated maritime powerhouse. The company offers integrated services covering ship broking, research, finance, digital tools, port services, and green-driven advisory services. 

I have had my eye on maritime services for a while now. There’s potential for growth with increasing global trade and an ongoing reliance on shipping for a large part of that.

The operating environment has stabilised and freight costs have fallen. Additionally, the company is pushing into emerging areas including offshore wind, as well as base and battery metals.

Strong financials

One thing that caught my eye was Clarkson’s interim 2024 results. Revenues and underlying pre-tax profit were under pressure in the six months to June, with the latter sliding 3% to £109.2m. That’s not bad considering a fairly bumper year was had in 2023.

Underlying earnings per share of 129.1p, alongside £178.4m of cash and liquidity, saw the board declare a 32p per share interim dividend. That represents a 7% increase from last year and an incredible 22nd consecutive year of dividend increases for the FTSE 250 stock.

With unchanged full-year guidance and a robust balance sheet, I thought I’d take a look at Clarkson’s valuation.

Valuation

The FTSE stock has a price-to-earnings (P/E) ratio of 13.5 right now. That looks to be a touch on the cheap side for me, particularly given the historically strong dividend growth.

Throw in a 2.9% dividend yield for the income investors out among us and there’s a bit to like.

The catch

There’s no such thing as a free lunch in investing and Clarkson is no exception.

One thing that stood out is a price-to-book (P/B) ratio of 2.4 which is always worth noting. However, as it is a services provider, I can look past this based on the nature of its balance sheet and service offering.

The FTSE 250 stock is up nearly 30% in the past 12 months and sitting at 3,685p despite a recent wobble. That was largely because investors weren’t too impressed by the half-year results.

I think a big part of that may have been the bumper 2023 period that year-on-year figures were being assessed against. A cyclical business like Clarkson isn’t without its risks, but the progressive dividend policy and forward outlook have me kicking the tyres a little more.

The verdict

Investing in a FTSE 250 stock like Clarkson isn’t without its challenges. Looking through the short term, I do see some long-term potential and diversification opportunities.

While I don’t have the cash available at the moment, I’ll be looking to invest before the end of the year if I can. Any further share price declines towards the 3,000p mark would put it even more firmly in the buy zone for me.

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