Elon Musk’s venture made electric vehicles (EVs) cool for the first time. Today, its market cap is a stonking $1.5trn, making it the eighth-largest firm in the S&P 500.

In comparison, Joby Aviation (NYSE:JOBY) is a stickleback, with a $12.4bn market cap. However, I do see a couple of similarities with a young Tesla.

So, could buying Joby stock today at $13 be like investing in the EV giant years ago?

Tesla of the skies

Toyota-backed Joby Aviation is a US firm that has pioneered electric vertical take-off and landing (eVTOL) ‘flying taxis’. These can travel 100 miles on a single charge at speeds up to 200mph in almost total silence, save for a rushing wind sound, like the rustling of leaves.

Similar to Tesla’s EVs then, these eVTOLs are a play on the green revolution, as they fly without needing fossil fuel. This means they could be very disruptive, replacing noisy, polluting helicopters while also creating an entirely new mode of transport.

Another similarity is the company’s vertical integration. Like Tesla, which builds its own batteries and software, Joby designs and manufactures its own electric motors, propellers, and proprietary ElevateOS software.

Also, Joby is eying markets beyond flying taxis, including selling aircraft to third parties like the US military and hospitals (organ transport). This would open up aftermarket maintenance revenue opportunities.

Finally, Joby aims for autonomous flights one day (similar to Tesla’s robotaxis). It’s also developing hydrogen-electric technology, and has already completed a 523-mile test flight, with water as the only by-product.

Unproven model

Having said all that, I see a couple of key differences. One is more initial competition, including from Archer Aviation in the US and China’s EHang. So it won’t have key markets to itself like Tesla largely did in the early years.

Second, Tesla is primarily a product company whereas Joby is a service company. In other words, I can buy an EV but (alas) it’s highly unlikely I’ll ever own an eVTOL. This makes the business model far more unproven, multiplying the risks for investors.

The final stage

After flying more than 9,000 miles in 2025, Joby expects to begin a commercial air taxi service in Dubai in 2026. Then possibly the US afterwards, helping shepherd Delta Air Lines passengers to and from international airports.

It’s currently into the FAA’s final stage of certification.

The company ended Q3 with nearly $1bn in cash, but it will almost certainly need more in future to build out a fleet of hundreds of eVTOLs.

Wall Street sees revenue reaching $570m by 2028, putting the stock at a lofty 22 times forward sales for that year.

Next Tesla?

I first bought Joby shares in 2023 at $4.50 each. However, after they surged to almost $20 in August, I sold a large part of my stake.

I’m holding onto my remaining shares, though, as Joby could indeed become another Tesla-like winner in future. Then again, it could crash and burn (hopefully not literally).

Investors interested in this speculative stock around $13 should know it’s very much high risk.

The post Could buying this stock at $13 be like investing in Tesla in 2011? appeared first on The Motley Fool UK.

Looking for the next Nvidia? That could be challenging as stocks like this are rare, but here are three shares with significant potential to check out.

Exploring Nvidia’s success

Before I list the stocks, it’s worth quickly exploring Nvidia’s success. What has driven it?

Well, in short, it’s had market-leading products (chips) in a huge growth industry (AI). This had led to spectacular revenue and earnings growth.

The low-altitude economy is about to take off

Looking at things through that framework, one stock worth highlighting is Joby Aviation (NYSE: JOBY). It’s a leader in all-electric, vertical take-off and landing (eVTOL) aircraft (aka ‘flying cars’).

This stock is insanely speculative. Because right now, flying cars aren’t exactly a mainstream concept.

But things could change quickly. In the years ahead, the ‘low-altitude economy’ (activity below 1,000 metres) is projected to see enormous growth. According to Business Aviation, the industry could be worth $41.5bn by 2035.

It’s worth noting that Joby – which is heavily backed by Toyota – has a working product called the Joby S4. This is an air taxi designed to carry four passengers.

Now, the valuation here is crazy. Currently, it has a market cap of $15bn but a 2026 sales forecast of just $53m.

Still, I think it could be worth a look as a highly speculative investment. In the long run, it could deliver explosive returns.

The nuclear industry is booming

Another industry that looks set to boom in the years ahead is nuclear energy. Today, both governments and companies are looking at nuclear as an alternative to fossil fuel energy.

A stock in this industry that looks interesting to me – and is flying right now – is BWX Technologies (NYSE: BWXT). It’s a specialty manufacturer of nuclear components.

This company offers products for small modular reactors (SMRs) and advanced reactors, naval nuclear reactors, nuclear fuels, and more. So, it could potentially play a major role in the nuclear revolution.

One thing I like about it is that it’s already profitable. This reduces risk for investors.

It’s still risky as there are no guarantees that nuclear energy will take off. Still, I think it’s worth a closer look today.

An autonomous driving and humanoid robotics play

Finally, check out Hesai Group (NASDAQ: HSAI). It’s a global leader in LiDAR technology.

Looking ahead, this company appears well positioned to benefit from the growth of two industries – self-driving cars and humanoid robotics. Over the next decade, these industries are expected to explode.

Note that today, the company has partnerships with businesses in both of these industries. And it’s already seeing huge revenue growth.

This stock is really risky as it’s a Chinese ADR. So, risks include restrictions on the use of its products in the US and the possibility of a US de-listing.

I think it looks really interesting, though. I bought a small position myself recently as a ‘moonshot’ growth stock and I think it’s worth a look.

Big potential

I’ll point out that I don’t expect any of these companies to become the largest in the world, like Nvidia has. But, taking a long-term view, I see the potential for substantial gains.

The post Looking for the next Nvidia? Here are 3 exciting growth stocks to check out appeared first on The Motley Fool UK.

Underneath though, at the portfolio level, some of the trust’s holdings are absolutely rocketing. Here, I want to highlight three of them to assess whether any are worth considering.

Hitting $4trn

Let’s start with the most high-profile, which is AI chipmaking juggernaut Nvidia (NASDAQ: NVDA). Shares are up 83% since the start of April, giving the company a mind-bending market cap of $4.22trn.

For context, that’s nearly 20 times the size of HSBC, the UK’s largest listed firm.

The news that recently sent Nvidia to a $4trn valuation — the first company to ever reach this milestone — was related to China. Namely, the US is allowing Nvidia to once again export its modified H20 AI chips to China. This was part of trade negotiations over rare earth metals.

According to Reuters, internet giants Tencent and TikTok-owner ByteDance are already lining up to get their hands on these chips. I doubt they’ll be alone in the queue. So this is great news for Nvidia shareholders. 

The company remains at the epicentre of the AI boom. But there are risks, which Scottish Mortgage manager Tom Slater recently highlighted: “If AI is to become truly transformative, it also needs to become ubiquitous and that points to commoditisation. A world built on $70,000 chips and 60% margins isn’t likely to endure.”

Here, Slater is casting doubt on whether Nvidia can sustain its pricing power as the AI revolution matures. In response, the trust has been trimming its Nvidia stake, having made over 100 times its money since 2016.

Despite this, the stock remained a top 10 position at the end of June.

Two other high-fliers

Elsewhere, Joby Aviation (NYSE: JOBY) has taken to the skies, fittingly for a flying air taxi firm. It’s gone from $5 to $17 since April — a gain of 240%.

The stock has been buoyed by news that Joby has successfully carried out trials of its aircraft in Dubai, ahead of a planned launch in early 2026. It then intends to expand its air taxi service globally, from the US and UK to Japan.

Earlier this week, Joby also announced that it will double its manufacturing capacity, allowing it to produce up to 24 aircraft per year (nearly one every other week).

Finally, global gaming platform Roblox is on fire. Shares have more than doubled year to date.

The company recently launched a new intellectual property licensing platform, enabling brands like Netflix, Sega, and Lionsgate to integrate their characters and worlds into the Roblox ecosystem. 

Hefty valuations

The strong performance of such stocks obviously bodes well for Scottish Mortgage (it reports the current period in November). But are any of them still worth a look?

Unfortunately, I’m not convinced they are, despite me holding all three. Joby has a $14.5bn market cap but no revenue (yet), which makes it highly speculative. And if Roblox disappoints with its revenue growth, the market could punish such missteps very severely.

For exposure to these stocks (and around 95 others), I think investors could consider Scottish Mortgage shares.

While there’s a risk the 10% discount to net asset value could widen further, the portfolio of growth companies looks incredibly strong today.

The post 3 booming growth shares in the Scottish Mortgage portfolio appeared first on The Motley Fool UK.

One that certainly fits into this category is Joby Aviation (NYSE: JOBY). Shares of the flying air taxi pioneer have gone from $5.93 on 11 April to a 52-week high of $12.33.

For those keeping score, that’s a gain of 108%!

It means any brave soul who loaded up on £10,000 worth of shares back then would now have about £20,000, even after adjusting for a weaker US dollar.

Dubai launch on track

I didn’t invest in Joby back in April, but it still leaves me with a dilemma. You see, I bought shares of Joby on three separate occasions last year. My cost basis was just over $5, meaning I’m now sitting on gains of more than 100%.

I’m bullish on the company’s long-term prospects. It recently carried out successful piloted test flights of its electric vertical take-off and landing (eVTOL) aircraft in the United Arab Emirates (UAE).

This is ahead of a planned launch next year in Dubai, where Joby has exclusive rights to operate air taxis for six years. It intends to charge passengers the same as a premium Uber ride.

Founder and CEO JoeBen Bevirt announced: “Our flights and operational footprint in Dubai are a monumental step toward weaving air taxi services into the fabric of daily life worldwide.”

The company aims to introduce its service at Dubai International Airport, Palm Jumeirah, Dubai Marina, and Dubai Downtown, with vertiport construction already well underway. Management says the airport-to-Palm Jumeirah trip will only take 12 minutes, significantly cutting down a 45-minute car ride.

That’s not surprising, as Joby’s aircraft can transport a pilot and up to four passengers at speeds of up to 200 mph, while emitting almost no noise and zero emissions. 

Meanwhile, Saudi Arabia is exploring the purchase of Joby’s eVTOLs, in a deal worth up to $1bn.

What dilemma?

All of which begs the question: what dilemma am I referring to? Well, Joby’s market cap is now north of $10bn, despite the firm being pre-revenue and still needing to gain full certification from the US Federal Aviation Administration (FAA).

The UAE news is great, but there’s risk that a delay in regulatory approval in the US sends the stock down sharply.

As for profits, we have no idea when those might emerge because Joby is building out a brand new mode of air travel. That’s going to take time and a lot of capital.

Thankfully, Joby has around $1bn on the balance sheet, as well as the expertise of manufacturing partner and backer Toyota.

According to Grand View Research, the global eVTOL market could be worth over $28bn by the 2030s. Joby is currently leading the race to capture a large chunks of this.

Taking chips off the table

What I will do here is sell half my position and redeploy the profits into other stocks. That way, I get to keep a sizeable position in Joby, while also minimising risk in my portfolio.

Investors interested in Joby should understand the risks here, and expect massive volatility. It’s a fascinating stock, albeit now a very speculative one at $12.

The post £10,000 invested in this hot growth stock 3 months ago is now worth… appeared first on The Motley Fool UK.

Here are two slightly unusual stocks in my ISA that are up by double digits in 2025.

eVTOL pioneer

First up is Joby Aviation (NYSE: JOBY), which has risen by just over 16% (more than both the S&P 500 and FTSE 100).

This company is unconventional because it’s attempting to commercialise a brand new industry, namely eVTOLs or electric flying taxis. It has over $1bn on the balance sheet, and is backed by Toyota, Uber, and Delta Air Lines.

Joby’s aircraft, which is getting closer to full regulatory approval, can carry one pilot and up to four passengers at speeds up to 200mph. The firm plans to launch its air taxis in Dubai in late 2025 or early 2026, then the US, Japan and elsewhere.

Of course, the idea of flying in comfort above busy roads for the price of an Uber Black trip, and potentially saving an hour or more of time, is an exciting one. And there have been three bits of news that have sent the Joby share price up 39% in the past month.

As part of a strategic manufacturing alliance, Joby closed the first $250m of a previously announced $500m investment from Toyota.

Next, it announced a deal with Saudi conglomerate Abdul Latif Jameel to explore sales of its eVTOLs, potentially worth around $1bn.

Finally, President Trump signed an executive order earlier this month designed to accelerate the development of drones and eVTOL technology.

Recently, Morgan Stanley analyst Adam Jonas said: “We don’t think investors are prepared for the scope of this revolution…We estimate 1 eVTOL aircraft can generate as much revenue as approximately 15 ride share vehicles.”

Under-the-radar tech firm

The second stock doing even better this year is Oddity Tech (NASDAQ: ODD). It’s up 69%.

Beyond the name, what’s unusual about this direct-to-consumer cosmetics firm is that it uses AI and machine learning to personalise product recommendations. And it’s still growing strongly, despite weakness in the overall global beauty industry.

In Q1, revenue jumped 27% to $268m, powered by double-digit growth for both its brands (IL MAKIAGE and SpoiledChild). This strong performance allowed management to raise full-year guidance to $790m-$798m (up from $776m-$785m).

Another unusual aspect about Oddity is that it’s solidly profitable, which is rare for a fast-growing tech firm that only went public two years ago. In Q1, it achieved a net income of $38m and free cash flow of $87m, despite investing heavily in growth.

One risk here is limited brand diversification. If consumer preferences shift or a new rival brand gains traction, growth could slow sharply.

My current pick

For me, Joby stock is getting risky at just under $10, as it puts the pre-revenue firm’s market cap at $8bn. Any regulatory setbacks could delay the upcoming launch, quickly souring investor sentiment.

At $4bn, Oddity’s market cap is half that of Joby’s. Yet the AI-powered beauty firm is set to generate nearly $1bn in revenue by next year, putting the forward-looking price-to-earnings at around 30.

I think Oddity’s most worth considering of the two.

The post 2 unusual picks creating wealth in my Stocks and Shares ISA in 2025 appeared first on The Motley Fool UK.

Rubbing salt in the wounds was rival Joby Aviation (NYSE: JOBY), the stock I doubled down on with the cash from that Archer sale. Until recently, it was ‘only’ up about 40% over this period.

So I was beginning to think I might have backed the wrong horse, especially after Archer signed a deal with Palantir earlier this year to “build artificial intelligence (AI) for the future of next-gen aviation technologies“.

However, two pieces of news have recently sent the Archer and Joby share prices on divergent flight paths. Here’s what has happened.

The Archer news

Archer Aviation is aiming to launch an air taxi service in Abu Dhabi by the end of 2025 with its Midnight electric vertical take-off and landing (eVTOL) aircraft. In Q1, it said everything had gone splendidly, and it had more than $1bn on the balance sheet.

Founder and CEO Adam Goldstein commented: “Archer’s pushing the boundaries of what’s possible and reshaping the future of aviation for years to come.” The stock jumped 23% after this bullish update.

However, it plummeted 20% a couple of weeks ago when short-seller Culper Research released a report accusing Archer of misleading investors. It said the firm’s Midnight eVTOL isn’t as far along as management has claimed, while also highlighting design changes that might suggest aircraft stability problems.

In response, Archer called the claims “baseless“, and said Culper is “not a credible research institution“.

The Joby news

By contrast, Joby stock surged 27% this week following the closure of a $250m investment from partner Toyota. This funding supports the firm’s progress toward FAA certification and commercial production of its electric air taxis.

Founder and CEO JoeBen Bevirt commented: “We’re already seeing the benefit of working with Toyota in streamlining manufacturing processes and optimising design.”

Joby remains on track to launch its service in Dubai later this year, but there could always be regulatory setbacks. Meanwhile, flying passengers safely from Manchester Airport to Leeds in just 15 minutes — instead of one hour+ by car or train — is still unproven.

My foolish takeaway

In my experience, reports from short-sellers need to be taken seriously, even though they have a financial incentive to see the stock in question fall. It definitely adds risk to the investment case because Archer hasn’t addressed any of the specific accusations yet.

That said, you can normally gauge how seriously other investors take the claims by the severity of the share price reaction. In Archer’s case, it’s 20% lower than before the report, but still up 27% in the past month and 230% over a year. Heavyweight partners like United Airlines and Stellantis add weight to its technology.

For investors looking to invest in this exciting space, I think Joby is worth a look at $8. But both these stocks are high risk because eVTOLS haven’t been approved by the FAA yet, meaning each firm is pre-revenue and therefore loss-making.

Still, at least recent developments have eased my concern that I backed the wrong horse.

The post Down 20%! This US stock just got stung by a short report appeared first on The Motley Fool UK.

At $7.50 as I write, the stock is up 49% over the past year. That’s a very solid return by any stretch of the imagination.

So, why do I think I might have backed the wrong horse? Let me explain.

Revolutionising short-distance travel

Joby’s eVTOLs can take off vertically like a helicopter and fly like a drone. They transport a pilot and four passengers in near-silence at speeds of up to 200mph. A flight can replace a one-to-two-hour drive with a journey that takes 10-20 minutes, potentially saving hours sitting in traffic.

The firm’s first commercial service is on track to launch later this year in Dubai, where construction of a vertiport at the international airport is underway.

But Joby isn’t the only game in town. Another eVTOL company called Archer Aviation (NYSE: ACHR) is also racing to commercialise an air taxi service. The stock jumped 22% on 13 May, bringing its one-year gain to 253%!

Reassessment

Symbolically, this means that Archer’s market cap of $7.3bn has overtaken that of Joby ($5.7bn) for the first time. A year ago, Joby’s was more than twice Archer’s — the clear leader. So investors have reassessed the competitive dynamics here.

Like Joby, Archer is set to launch a commercial service in the Middle East at the end of this year (in Abu Dhabi). Both have similar amounts of cash on the balance sheet and are progressing well towards securing aircraft certification with the US Federal Aviation Administration (FAA).

So, what’s the difference? Well, in its recent Q1 results, Archer said it was partnering with Palantir to “build artificial intelligence (AI) for the future of next-gen aviation technologies“. It’s already partnered with defence start-up Anduril to leverage cutting-edge AI technology to make a military eVTOL.

Therefore, the company is moving quickly to secure innovative defence partnerships. There might be early evidence emerging that ambitious Archer is more forward-thinking than Joby.

None of this would have bothered me a year ago. Back then, I owned both stocks. However, I decided to get off the fence and go with one over the other. With Archer stock up over 200% since I sold it, that’s looking like a mistake.

High-risk, high-reward stock

Some analysts envision a $1trn market for eVTOLS over the next decade. But there are plenty of operational and regulatory risks to navigate for both companies. There could be delays or a safety incident that sets the whole industry back.

In Q1, Joby had completed 62% of the fourth stage of aircraft certification (of five). It had $813m in cash, plus an additional $500m commitment from backer Toyota. It also announced a partnership with Virgin Atlantic to launch air taxis in the UK.

It’s too early to say if I backed the wrong horse. But the fact one is outperforming the other by a wide margin is a little disappointing.

Long term, I’m still bullish on Joby, as eVTOLs should be a massive growth market. Fact is though, we don’t know what margins will look like, meaning this stock is only suitable for investors with a stomach for high risk.

The post Up 49%! But have I backed the wrong horse in my Stocks and Shares ISA?  appeared first on The Motley Fool UK.

Given this, I’ve been weighing up a few options for my Stocks and Shares ISA. Here are two stocks I’ve got my eye on.

Out-of-favour AI stock

The first — Nvidia (NASDAQ: NVDA) — needs no introductions. The chipmaker is the world’s third-largest firm and remains central to advancements in artificial intelligence (AI). Demand for its latest Blackwell AI chips is very strong, according to management.

Yet Nvidia’s share price has fallen 27% in less than three months. This puts the stock on a forward price-to-earnings (P/E) ratio of 24, which is an undemanding multiple for a top-notch growth company.

Investors seem to be worried about a few things here. First, there is uncertainty around tariffs, which admittedly may impact Nvidia’s operations. And the chance of a US recession has risen considerably, according to most economists. An economic downturn would be bad all round.

Meanwhile, some doubts have crept in about Nvidia’s position in the inference stage of generative AI. While its chips reign supreme in the training phase, the competition may be far stronger in inference (i.e., when a trained model spits out a Shakespearean sonnet on the fly).

While these concerns are warranted, I currently see no evidence that Nvidia won’t keep benefitting from rising AI infrastructure spending. The market still expects Nvidia to post strong double-digit growth over the next three years.

Indeed, the AI chip king’s revenue is forecast to top $300bn by 2028, up from $130bn last year. Net profit is tipped to exceed $155bn by then!

Of course, these forecasts could change. But as the stock moves closer to $100, I think the risk/reward setup is starting to look more favourable. As such, I’m very tempted to invest in some shares.

Transport disruptor

The second stock I’ve got my eye on is Joby Aviation (NYSE: JOBY). It’s fallen 41% to $6 in less than three months.

Joby Aviation is aiming to commercialise electric vertical take-off and landing aircraft (eVTOLs). In lay terms, flying electric taxis that take off vertically and travel without emissions in near silence.

Joby’s aircraft can currently do a 100-mile trip at speeds of up to 200mph. But it’s still working towards full certification, which means there is a lot of regulatory and operational risk here.

However, the company is making rapid progress and expects to start a commercial service in Dubai in late 2025 or early 2026. The first of four ‘vertiports’ is currently being built at Dubai International Airport. It aims to zip four passengers to Palm Jumeirah island in just 12 minutes rather than 45 minutes by car. 

In the UK, Joby has partnered with Virgin Atlantic to roll out air taxis, starting with regional and city connections from the airline’s hubs at Heathrow and Manchester Airport.

Yesterday (31 March), China became the first country to approve commercial air taxis. So rather than being merely science fiction, this is a massive new emerging market.

Joby has over $1bn in cash to fund its commercial launch, but the stock is still very much in the high-risk, high-reward category.

The post As the stock market wobbles, here are 2 shares I’ve got my eye on appeared first on The Motley Fool UK.

Here’s why I think it has the potential to produce big returns over the next few years.

eVTOLs

Joby Aviation is leading the race to commercialise electric vertical take-off and landing (eVTOL) aircraft. More commonly known as flying electric taxis, they can take off vertically like a helicopter, which means no need for lengthy runways. Unlike helicopters, they fly quietly like a drone.

Joby’s aircraft currently has a 100-mile battery range and carries four passengers and a pilot, reaching speeds of up to 200mph. They offer an emission-free alternative for regional transport.

For example, an eVTOL can fly from JFK Airport to Manhattan in about 7 minutes, compared to 60–90 minutes by car, saving passengers up to 80 minutes of travel time. The company is building vertiports for airport routes first to target this low-hanging fruit.

Last year, the firm signed a six-year exclusive deal to launch air taxi services in Dubai, starting in 2026. A flight from Dubai International Airport to Palm Jumeirah could take just 10 minutes, compared to 45 minutes by car. Its partners have broken ground on the first vertiport in its Dubai network. 

To start with, Joby will offer Uber Black pricing at a per-seat-mile basis. Then it plans to eventually drive prices down to the level of UberX, which is the budget-friendly service. Given the amount of wealth in Dubai, I doubt demand will be a problem!

Blue-chip backing

Speaking of Uber, Joby bought the ride-hailing giant’s eVTOL venture in 2021. As part of the deal, Uber took a stake and agreed to integrate their services, meaning Joby’s air taxis will be accessible via Uber’s app. 

Another partner is Delta Airlines, which plans to integrate the service into its app to ferry passengers between airports and urban centres.

Finally, there is Toyota. The automaker recently made another $500m capital commitment, bringing its total investment in Joby to almost $1bn. It is working closely with the firm on manufacturing and certification.

Another thing to note is that Joby recently delivered its second aircraft to the US military. eVTOLs have defence applications.

Certification

Joby is currently progressing through the fourth of five stages to get the aircraft certified. It expects this to be completed by late 2025 or early 2026. So a delay (or worse) is probably the biggest risk here right now.

Another challenge would be weak consumer demand, though a recent Honeywell survey found that 98% of US airline passengers would consider taking an eVTOL.

A positive here is the balance sheet. At the end of 2024, it had $933m in cash, no debt, plus the additional $500m commitment from Toyota. At the current cash burn rate, this $1.4bn should easily see it through to commercial operations.

More cash will then be needed, though I doubt Toyota will abandon its $900m investment. Funding therefore shouldn’t be an issue, though shareholder dilution could be.

Foolish takeaway

Joby is pioneering flying taxis and they have massive disruptive potential. But it’s pre-revenue, making the stock highly speculative. This means it’s only suitable for risk-tolerant investors with a long-term horizon to consider.

The post At $6, this growth share could be a big stock market winner! appeared first on The Motley Fool UK.

My own portfolio is on track for one of its best ever years. That said, there’s still a few trading days of the year left, so I’m not counting my chickens just yet.

Getting started early

Younger people today are investing more than ever before. According to the World Economy Forum, 70% of retail investors globally are aged under 45.

This is a smart move on their part. The earlier one starts investing, the longer investments can grow. And it’s time that turbocharges the compounding process (interest building upon interest).

For example, let’s assume two people start investing for retirement at 70, putting away £500 a month. The difference in outcomes between starting at age 35 and 25 is astonishing.

The tables show a difference of nearly £2m! And all because one investor had a 10-year head start getting the compound snowball rolling with their £500 a month.

Jumping straight in

However, some of these tech-savvy young investors might be making a mistake. That’s because around 66% of them are spending less than 24 hours deciding what to invest in.

As Andrew Prosser, Head of Investments at InvestEngine, points out: “Younger investors have been raised on digital services that are immediate and convenient, so it’s not surprising that two-thirds of young people spend less than a day deciding on where to invest their savings.”

The risk here is that rushed investing decisions might lead to poorer results. Prosser adds: “Younger generations would be wise to take some time before investing, to understand their appetite for risk, and to diversify their investments, so that when one stock falls, the whole portfolio doesn’t fall with it.”

He recommends exchange-traded funds (ETFs) as a good choice, as they track indexes, thereby reducing risk through diversification.

One of the most popular is the Vanguard S&P 500 UCITS ETF, which tracks the largest blue-chip US stocks. It’s up around 200% in 10 years.

Battling my own FOMO

The risk with making investing decisions inside 24 hours is that they might be motivated by FOMO (fear of missing out). Those are four very dangerous words for an investor.

I know this first-hand. I’ve been feeling pangs of FOMO recently with Joby Aviation (NYSE: JOBY). This is an intriguing company aiming to launch an Uber-like electric air taxi service in late 2025.

I first bought this high-risk stock at $4 in March 2023, then again this year at $5. After surging 42% in two months, it now trades for just under $8.

Yet instead of being satisfied with that, I’ve been wondering whether I should invest more money, just in case it goes even higher. FOMO, in other words.

I won’t because Joby is yet to receive clearance for its aircraft (though it’s getting closer). Plus, we don’t know what demand there’ll be for flying taxis (though some analysts see the market opportunity reaching $1trn+ by 2040).

Joby is backed by Toyota, the best-selling carmaker in the world, and Uber. It’s one of the most exciting — but also riskiest — stocks I hold.

The post 1 stock market mistake to avoid in 2025 appeared first on The Motley Fool UK.