Netflix is best known for smash-hit international shows like Squid Game and gritty dramas like Adolescence. But away from the screen, the streaming giant’s share price has been attracting its own binge-watchers.

The company has certainly been a box office smash for long-term investors, but there have been some dramatic scenes along the way.

Investing in individual stocks can be like that. There are plot twists, cliffhangers and unexpected heroes. And every now and then, a stock pulls off a comeback worthy of its own mini-series. Netflix did just that.

Our chart this week shows how an investment of $10,000 in Netflix when it floated on the US stock market in May 2002 would now be worth around $11m (just over £8m). That’s a return of more than 100,000%*. But it’s been quite a story. How many individual investors would have held their nerve in the months leading up to June 2022 when the share price plunged by around 75%?

Retail investors are often drawn to ‘story stocks’. If you’re comfortable with the risk, have time to research intensively, and can stomach the volatility, that’s your decision. However, all too often people buy late, sell in panic and get burned. In our view, putting all your eggs in one basket is rarely a sustainable investment strategy.

We believe a better approach for many people is gaining your exposure to equities – including innovative companies like Netflix – as part of a diversified portfolio, run by professionals who assess valuations, manage risk and adjust their holdings based on fundamentals, not emotion.

That’s exactly what we offer through our multi-asset solutions.

Key takeaway

Multi-asset portfolios are designed to balance risk and return, providing exposure to leading global companies without piling all your eggs into one basket. We believe that’s a sensible long-term approach. If it’s drama you’re really looking for, then why not subscribe to a streaming service.

*Source: Yahoo Finance

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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.