Capital growth: the key to achieving your ISA and SIPP goals

It’s a fact, the amount of capital growth you achieve each year will directly impact the time it takes to achieve your ISA and SIPP goals.

When you look at the definition of capital growth, you’ll see that it’s the increase in the market price of an asset. This is also known as its ‘capital appreciation’. However to keep things simple, I’ll be referring to capital growth as the annual gains an investor makes each year in their ISA and SIPP portfolio.

If your objective is long-term capital growth, your ultimate aim should be to outperform the stock market. The rules are simple:

Beating the stock market gives you a greater chance of arriving at your financial goals on time.
Underperforming the stock market gives you a greater chance of not arriving at your financial goals on time.

For more on the importance of out performing the stock market, please download our free Top 10 Tips for Successful ISA Investing.

Beating the stock market is extremely difficult to achieve. As a consequence, unless you have the time, talent and energy to do it all yourself, you’re probably going to be looking for some expert help.

When you’re looking for that help, one of the key things to focus on is your adviser’s capital growth goal.

The importance of capital growth goals

Traditional advisers typically aim for 7% annual capital growth, because this is roughly the rate of return the stock market has achieved per year over the last century. Unfortunately, statistics show that 80-90% of advisers underperform the market. This means that most advisers achieve less than a 7% annual return.

Remember the rule: Underperforming the stock market gives you a greater chance of not arriving at your financial goals on time.

If your aim is greater capital growth, your job is to seek help from an adviser that has historically beaten the stock market. However, even if you do find a company with a record of beating the stock market, you have to remember that there’s no guarantee they will continue to perform well in the future.

Try to find a company that aims for 12-15% annual growth. A company with a strong track record of outperforming the stock market will set capital growth aims higher for their clients.

How can ISACO help?

ISACO was established in 2001 by my brother and I. Today we specialise in providing a premium Investment Guidance Service for ISA and SIPP investors with portfolios in excess of £100,000.

Our mission is to help investors achieve better performance over the long-term, better protection in falling markets and at a better price.

ISACO aims to help clients return 12-15% annual capital growth. We have a strong track record of outperforming the stock market, so we’re able to set our capital growth aims higher. If we outperform the stock market, it lets our clients arrive at their intended goals on time and in some cases earlier than expected.