If you’ve spent any time on investing forums or financial news sites over the past few years, one name has been hard to ignore: Tesla. At its peak, Tesla wasn’t just a car company – it was a movement. It promised a cleaner, tech-savvy future and, for a while, its share price seemed to rise on pure belief.  

But belief doesn’t always deliver returns.  

Last week, Tesla reported a 13% drop in global deliveries and a 20% year-on-year decline in revenues from electric vehicle (EV) sales. Once the poster child for growth, the company is now facing declining margins, inventory build-ups and stiff competition from the likes of BYD in China and a resurgent European EV sector. At the time of writing, the stock is now down over 45% from its peak and at one point was down over 70%.  

The chart below shows just how bumpy the ride has been for Tesla shareholders since the start of 2020. It shows the scale of the daily falls (drawdown) by Tesla stocks during negative periods and contrasts this with the falls by the Marlborough Blended MPS 8 portfolio during negative periods over the same period.  

It's worth emphasising that the chart shows the scale of the falls – not overall performance. Both Tesla and our Blended MPS 8 portfolio have achieved very positive returns over this period (Tesla was at the forefront of an exceptional period of outperformance for technology companies). In our chart, we are comparing the volatility holders will have experienced on their investment journey.

Why does this matter for investors?

This matters because it’s a timely reminder that putting all your eggs in one basket –especially a volatile, high-profile one – is rarely a sustainable investment strategy.

The case for multi-asset investing

Multi-asset investing gives you exposure to a diverse mix of asset classes – equities, bonds, alternatives, cash and more – across geographies and sectors. The goal isn’t to shoot the lights out with one big winner. It’s to deliver smoother returns and reduce the impact of drawdowns.

Retail investors are often drawn to ‘story stocks’ like Tesla, tempted by the promise of explosive growth. And to be fair, if you're comfortable with the risk, have time to research deeply, and can stomach the volatility, that’s your call. But all too often, people buy late, sell in panic and get burned.

A better route for many? Accessing equities – including exciting companies like Tesla – as part of a diversified portfolio, run by professionals who assess valuation, manage risk and rebalance based on fundamentals, not headlines.

That’s exactly what we offer through our MPS portfolios, multi-asset portfolios and our bespoke Personal Portfolio service (which include exposure to high-quality direct equities as part of a disciplined multi-asset strategy).

Key takeaway: Tesla's troubles show how quickly fortunes can change. We believe diversification offers the best way to manage portfolios and navigate unpredictable markets. Multi-asset portfolios are designed to balance risk and return, offering access to global trends without betting the farm on one company.

You can find out more about our Personal Portfolio service here.

‍*Eagle-eyed readers may have spotted the American spelling of ‘licence’ and the lack of apostrophe in ‘driver’s’ in our subject line and heading. This because we’re referring to the2021 song by Olivia Rodrigo.

‍

Find out more about our multi-asset solution

‍

‍

This article is provided for general information purposes only and should not be construed as personal financial advice to invest in any fund or product. These are the investment manager’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.