Introduction
Angus Kirk, independent Financial Planner at transform FP, explores the risks of chasing fashionable stocks and highlights why a disciplined, goals-based investment strategy is more likely to serve you over the long term. If you’ve ever been tempted to go all in on the next “big thing,” read this first.
The Lure of the “Next Big Thing”
We’ve all heard the story. A friend makes a tidy sum on a tech stock. The news is full of a company’s meteoric rise. Social media buzzes with stories of investors becoming overnight millionaires. It’s hard not to wonder: “Am I missing out?”
One name that continues to spark these questions is Tesla. The electric vehicle giant, fronted by the ever-controversial Elon Musk, saw its share price soar by more than 700% in 2020, cementing its place as the world’s most valuable car company. It’s easy to see the appeal. Who wouldn’t want their investments to deliver that kind of return?
But while these stories dominate headlines, they don’t always make sound financial sense for individual investors. Behind every success story is a great deal of speculation, risk, and survivorship bias. The question isn’t whether Tesla (or Apple, or Bitcoin, or the next hot stock) will succeed — the question is whether piling all your wealth into a single, fast-moving investment is a strategy that aligns with your goals, risk tolerance, and long-term financial plan. Spoiler alert: it rarely is.
1. Strong Past Performance Doesn’t Predict Future Gains
Tesla’s share price boom in 2020 was extraordinary. But does that mean it will deliver similar growth in 2025? Or even in 2026?
Unfortunately, past performance is not — and has never been — a reliable indicator of future returns. It’s one of the golden rules of investing, and yet it’s a rule many investors break in pursuit of the next big win. Markets are influenced by a vast array of factors — economic cycles, regulatory shifts, consumer trends, geopolitical tensions — and many are completely unpredictable. If the last few years have taught us anything, it’s that the unexpected often shapes the market more than the expected. This makes trying to time the market — or pick a “winning” stock at just the right moment — incredibly difficult, even for seasoned professionals.
In Tesla’s case, supporters (often dubbed “Teslanaires”) argue that the company is just getting started. With its expansion into AI, energy storage, and autonomous driving, some believe it could continue to dominate its sector. But others see warning signs. Competition in the EV market is intensifying. Traditional automotive giants and new players — including Apple — are entering the space with scale, experience, and capital. Some analysts believe Tesla’s current valuation already prices in decades of growth.
A research note from JP Morgan starkly put it: “Tesla shares are, in our view and by virtually every conventional metric, not only overvalued but dramatically so.” The truth is, no one can say with certainty which of these views will prove correct. Jumping into a stock simply because it’s been successful recently is akin to driving by looking only in the rear-view mirror.
“What feels like a smart move today might be little more than emotional momentum. Successful investing isn’t about headlines — it’s about long-term alignment with your goals.”
— Shadi Kirk, Independent Financial Planner, Transform FP
2. Stock Picking Is High Risk — and Often Driven by Hindsight
Even if Tesla isn’t your focus, the challenge remains: how do you know which companies will soar and which will slump? For every stock that breaks through the noise and delivers eye-watering returns, dozens quietly underperform — or worse, collapse altogether. Remember names like Theranos, WeWork, or Carillion? Each once carried lofty valuations and enthusiastic backers. Putting all your capital into a single company — no matter how promising it appears — is not investing. It’s speculation. Or, to use a more familiar analogy: it’s placing all your chips on one number at the roulette wheel.
The danger of investing based on hype is that it’s often fuelled by retrospective storytelling. People tend to talk about the investments that worked out, not the ones that didn’t. It’s easy to praise a stock after it’s risen. Much harder to pick a winner before the growth happens. And by the time the mainstream media catches wind of a stock’s rise, much of the value may already be priced in. You could find yourself buying high — and then watching the price fall or stagnate. That doesn’t mean individual stocks don’t have a place. But for most investors, they should form part of a broader, diversified portfolio — not become the centrepiece of your financial strategy.
“When clients ask about putting everything into one hot stock, I ask them a simple question: what if you’re wrong? Diversification is your protection against being wrong — which every investor is, at some point.”
— Shadi Kirk
So What Should You Do Instead?
If you’re excited by the potential of a company like Tesla — and you have a high risk appetite — there may be room to include that stock in your portfolio. But it should be proportionate, deliberate, and balanced.
A robust investment strategy typically includes:
- A mix of asset classes (e.g. equities, bonds, property, cash)
- Exposure to different sectors and geographic regions
- A blend of active and passive investments
- A structure that reflects your time horizon and tolerance for risk
By diversifying, you reduce your exposure to the failure of any single company or market. While not as thrilling as chasing a headline stock, this approach is more likely to deliver consistent, sustainable growth over the long term.
And just as importantly, it reduces stress. You’re no longer relying on one company — or one personality — to secure your future.
With the help of a financial planner, you can design a portfolio that’s built around your personal objectives. Whether your goal is early retirement, long-term income, or leaving a legacy, your investments should be a means to an end — not a rollercoaster ride of speculation.
Conclusion: Avoid the Noise, Trust the Process
It’s completely normal to feel FOMO when you hear stories of huge stock market wins. But chasing fads rarely delivers the results people hope for — and can lead to disappointment or losses. The real question isn’t whether Tesla, Apple, or Bitcoin will rise or fall. It’s whether following the hype serves you and your goals. With a calm, diversified, and professionally guided strategy, you can invest with confidence — not noise.
Let’s Talk About Your Investment Strategy
If you’re feeling unsure about how recent market trends fit into your portfolio, or you’d like to explore how to invest in a way that aligns with your goals and values, we’re here to help.
Contact us today to book a conversation with one of our advisers. Let’s build a strategy that excites you — without relying on the next “big thing.”
Important disclaimer: This article is for general information only and does not constitute financial advice. The information is aimed at retail clients only. The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. The Financial Conduct Authority does not regulate estate planning, tax planning, or will writing. We recommend that you speak to a qualified financial planner for advice tailored to your individual circumstances and goals.
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