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Investing in your own investment individual pension (SIPP) is a great way to build medium to long-term wealth. Even over the past five years, the stock market has produced fairly robust returns as all volatility investors have endured. With that in mind, let’s take a look at how our £5,000 portfolio works from April 2020.
Transformative benefits
The level of returns that investors enjoy will ultimately depend on where the money has been invested in the past five years. Here in the UK, large caps look far outweigh the massive caps. FTSE 100 and FTSE 250. Meanwhile, over the pond, S&P 500 and Nasdaq 100 It enjoys the rewards of stronger economic growth.
| index | Total revenue over 5 years | Annual returns | Portfolio Values |
| FTSE 100 | 55.6% | 9.2% | £7,780 |
| FTSE 250 | 27.6% | 5.0% | £6,380 |
| S&P 500 | 96.4% | 14.5% | £9,820 |
| Nasdaq 100 | 119.8% | 17.1% | £10,990 |
Obviously, the US tech sector was the stars of the show. But what’s interesting is that when FTSE 250 was ruled out, each index significantly outperformed historic average revenue. For reference, the FTSE 100 usually generates an annual gain of 8%, with the S&P 500 and Nasdaq 100 being 10% and 13% respectively.
There are many different factors at play here. But one of the biggest is the fact that today’s stock market just experienced Covid Crash in 2020, five years ago.
This shows that buying a proven high quality business at the point of fear, uncertainty and doubt can lead to a return that will win the market. So, will investing £5,000 today achieve a return that will win similar markets over the next five years?
Looking for opportunities
It is impossible to know for sure what will happen over the next five years. The tariff situation will undoubtedly cause confusion in the short term. However, I am optimistic in the long run as quality companies adapt to the new landscape.
So seeing proven industry leaders with healthy balance sheets might be a wise move to consider now. And one business I’ve been looking at for a while nvidia (NASDAQ: NVDA).
Chip designers have already seen almost a third of the market caps have been wiped out since their launch in 2025. However, as a result, the stock is ultimately trading at a much more reasonable valuation of advance revenues of just 21x. And given that semiconductors have been excluded from recent tariffs, is Nvidia a simple purchase?
Well, that’s not the case at all. Semiconductors are actually exempted, but a 25% tariff is applied to steel and aluminum. Nvidia relies heavily on data center products for these two products.
As for the impact, Nvidia’s margin could be a hit as the AI accelerator chip landscape is becoming more and more competitive. And then revenues could not meet analyst expectations and drive forward P/E as they do now.
However, with $43 billion in cash currently on the balance sheet, Nvidia appears to have enough economic flexibility to survive this storm. That’s why I think it could be a major long-term addition to SIPP while stocks are falling to discounted prices.