How I plan to invest in 2024 to target a £1m Stocks and Shares ISA

One of my financial goals is to build a £1m Stocks and Shares ISA. There are now more than 4,000 ISA millionaires in the UK and that number will likely keep growing. I’d like to be part of that!

It’s important to realise that it will take some time to reach this target. But as investing is a long-term activity, this suits me fine.

My plan in 2024 and beyond is likely to be the same as in previous years. A timeless process that I hope to continue.

Let’s discuss further.

Funding the pot

First, I’d aim to maximise my Stocks and Shares ISA allowance. Currently, there’s a maximum limit of £20,000 per tax year.

The great benefit of the ISA wrapper is that investments held within it are free from capital gains tax and dividend tax.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Whatever amount I decide to invest, it’s important to be comfortable leaving it a long time. Any withdrawals are likely to extend the time it will take to reach millionaire status.

Avoiding sleepless nights

I’d spread my investments across a range of geographic regions and sectors. Diversification spreads risk and avoids putting all my eggs in one basket. So if one investment falls in price, I’d still be able to sleep at night.

Also, there isn’t just one region or sector that performs the best every year. It often changes. In the near term, stock market investments are affected by factors that include geopolitical events, central bank monetary policy, and government regulation for instance.

It’s difficult to consistently predict every move. So most investors would be better off focusing on adding money to the ISA pot and keeping it there rather than trying to time the market.

This points to the well-known investment phrase, “time in the market beats timing the market”.

What I’d buy

I’d spread some of my money across a range of exchange-traded funds (ETFs) like Vanguard S&P 500 UCITS ETF and ishares FTSE 100 UCITS ETF.

This is a low-cost way to own a large number of shares in one go.

I’d also buy a selection of high-quality shares. By this I mean those that demonstrate profitability, stable earnings, a strong balance sheet and a positive long-term outlook.

By doing so, I’d aim to beat the market and give a boost to my ISA performance. The key is to consistently own shares for a long time.

For instance, the oldest investment in my Stocks and Shares ISA is Apple. With a gain of 940% over the past decade, it has considerably beaten the average investment.

Targeting £1m

The long-term average stock market return is around 10%. But by carefully selecting high-quality shares I’d aim to beat this. That said, bear in mind that it’s still possible that I could earn less than average.

The table above shows how many years it would take to reach a £1m ISA depending on annual return and investment amount.

As we can see, I won’t get there any time soon, but millionaire status is within reach for patient investors.