How I invest: prioritising my ISA, cutting costs and riding out volatility
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Sometimes the biggest challenge in investing is having the discipline to continue making contributions, even if other expenses get in the way.
Luke, a just turned 25-year-old intelligence analyst at an educational tech firm, has demonstrated a commitment to adding to his ISA pot through thick and thin.
Luke started investing in his Stocks and shares ISA in January 2023 with £1,000 he had saved up. He’s diligently added to this pot every month even during periods when he was less than flush with cash.
“I put in a pretty fixed amount and it’s the first thing I put into when I get paid,” he says.
Luke has just bought his first home using his Lifetime ISA and while he was saving for that he found it tough to continue adding to his other investment pot as much as he’d like to, but rather than doing nothing he simply changed from a monthly to a weekly routine, adding in whatever he could at the end of the week, always with the goal of adding to the pot even if it couldn’t be the ‘perfect’, systematic amount repeating each time.
His end goal? There’s no deadline yet at which he wants to retire, so long as he’s putting his money to work and it’s growing, Luke is happy. The combination of regular contributions and investment growth has taken his portfolio value to £30,000.
What is Luke invested in?
At the beginning, Luke started off in one of the ready-made investment portfolios available on his initial platform but after just over a year he switched to AJ Bell and took his portfolio into his own hands.
To stay on top of things, Luke reviews his portfolio to ensure it’s maintaining a broad, global diversification with each market around the world. Luke also really wanted to get his overall costs, down as the platform and fund fees were adding up to “tens of pounds every month”, while keeping his total growing.
The resulting portfolio encompasses the iShares Core MSCI World ETF, taking up around 60%, with the iShares Core MSCI EM IMI UCITS ETF in support, and smaller positions in the Vanguard S&P 500 ETF and Xtrackers NASDAQ 100.
He’s interested in companies but want to spread the risk.
Luke says he deliberately chose not to invest in single stocks and opted for funds instead to bolster his diversification, but that doesn’t mean he isn’t absorbed by the underlying companies themselves.
“SpaceX was an interesting one,” he says, recalling the widespread conversations going on about what became the biggest IPO in stock market history.
He chose not to participate in the IPO directly, but he says was hungry for the discussion and information around it.
Apple, Microsoft, SanDisk, Samsung and SK Hynix have all been big topics of debate in stock markets as well, especially the past year when memory and semiconductor chips have seen soaring AI-related demand and all names Luke enjoyed diving into.
“It’s interesting how such big companies can be involved in so many things. But with the memory story, how we’ve almost come into a new cycle the past two years has been really interesting,” he says.
Luke has exposure to all these stocks through his various ETFs. Apple, SanDisk and Microsoft are part of the iShares MSCI World ETF and Vanguard S&P 500 ETF and Xtrackers NASDAQ 100 funds, while Samsung and SK Hynix are both part of the iShares Core MSCI EM IMI UCITS ETF.
Avoiding more niche products
But while the chip story has intrigued Luke and he’s optimistic about the investment outlook for that theme, he made a deliberate choice to only gain exposure via these broader funds rather than a more niche products after seeing the volatility the more niche ETFs tend to experience.
“The swings would have been more violent, and that would have been on my mind,” he says. “I prefer not to have something that volatile and not be constantly thinking about it.”
Over the past 12 months, this approach has delivered a 22% return, adding nicely to the sum he’s been building over the past three years.
Out of the four ETFs, the EM fund has generated the highest returns so far, up 32% since this time last year, according to data from FE Analytics.
This is largely thanks to the likes of SK Hynix and Samsung, which have each had their strongest year on record, respectively, as they became more central to the AI theme.
It has also been his most volatile holding though, as Samsung and SK Hynix have seen wild swings as sentiment towards the AI theme as a whole waxes and wanes. So, while it’s still up materially on a 12-month view, it is about 10% off its summer highs.
Getting used to volatility
Luke hasn’t been too perturbed by this. Although he prefers to avoid volatility where he can, he understands that investing in anything comes with ups and downs and he’s learned not to let it panic him.
Luke got his first taste of this after ‘Liberation Day’ in 2025, the first time his portfolio wasn’t just rising steadily.
“When the tariffs hit, that was also the first time my portfolio had really taken a hit,” Luke says.
Going by the four ETFs mentioned above, each one would have between sitting on year-to-date losses of around 17% in the wake of the announcement of sweeping US tariffs on imported goods. With much of this damage repaired after President Trump’s rapid U-turn.
“I just had to accept this was part of it and that portfolios go up and down,” even if Luke acknowledges this was easier said than done given this was the first time he had seen any significant losses and up until that point the portfolio had just been continually “just growing and growing and growing”.
“But I think for me it was more I’ve just got to ride it out, recognise this is part of the process, just let it happen, and since then obviously it’s recovered,” he says.
Eve Maddock-Jones: Funds and Investment Trust Writer
Eve joined AJ Bell in 2026 as a funds and investment trust writer. She was previously editor at Investment Week, reporting on all major retail investor news, covering funds and investment trusts, ETFs and regulation...