The last two years have been quite a bumpy ride for my Stocks and Shares ISA. As a predominantly growth investor, I’ve seen many of my once-thriving positions fall from grace, wiping out a large chunk of wealth in the process. And even in 2023, my growth portfolio limps on.
As frustrating as this is to see, I haven’t lost any sleep at night. That’s because short-term volatility isn’t actually a problem when taking a long-term perspective. I’m not interested in what’s going to happen a few months or even years from now, but rather how the next decade is going to shape up.
With that in mind, I’ve been using the recent volatility to top up on my existing positions. In fact, in some cases like Shopify, I’ve been waiting years for a chance to add more shares at a sensible valuation. And there are plenty of British companies I’ve been busy buying as well.
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A massive turnaround play?
One business that I’ve owned for many years now is Keywords Studios (LSE:KWS). The picks-and-shovels company provides the critical talent used by the world’s largest game development studios to complete projects.
The video game service industry is highly fragmented. But with management continuously executing bolt-on acquisitions over the years, Keywords now offers solutions across the entire development pipeline, including asset creation, programming, localisation, and bug testing, among others.
With the recent hype surrounding generative artificial intelligence (AI) models, investors are getting increasingly concerned about the potential long-term redundancy of Keywords’ role in the industry.
But the existing technology still has a long way to go before it poses a real threat. And Keywords has already been positioning itself to adapt to the introduction of AI technologies in the long run.
Another recent stumbling block to performance has been the ongoing SAG-AFTRA strikes in the US that have had knock-on effects on the game development industry. But given this is ultimately a short-term slump, I don’t think it merits the Keywords’ near-50% drop since the start of 2023.
And that’s why, in my mind, a terrific buying opportunity has emerged, especially considering the growth stock has traded at a premium for years.
Capitalising on ISA-boosting opportunities
Keywords isn’t the only company I’ve been topping up on. Other firms in my ISA have seen similar or even greater downward pressure in the last couple of years. Yet the underlying businesses and their long-term strategies remain intact, even in a higher interest rate environment. At least, that’s what I think.
Capitalising on buying opportunities during a volatile market can be a bit tricky. After all, when emotions are driving the market, a heavily discounted stock can still fall further. That’s why I’ve been drip feeding my capital over time, ensuring I always have capital at hand to take advantage of better buying opportunities as and when they emerge.
