Helena Morrissey Tortoise or the hare?

fall and to wish we had more invested when they rise. A mechanistic flow of funds prevents us from acting impulsively on either greed or fear.

The tricky part is deciding what to invest in. Intriguingly, my son is drawn to US tech stocks, my daughter to British companies. Their instincts couldn’t be more different – but they might both be right.

The US market has lapped up all the glory in recent years, with the Magnificent Seven tech stocks – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla – driving explosive gains in the S&P500. Those stocks dominate the market, comprising nearly 30pc of the index, and accounting for 60pc of the index’s overall 24pc rise last year. There are two schools of thought about US tech stocks – it’s a bubble about to burst or we’re just at the start.

In contrast, the London stock market is widely seen as moribund. The headline returns seem to confirm it – the index was up a paltry 2.4pc last year and only 20pc higher than when Isas were first launched a full quarter of a century ago. But dividends play a bigger role here – adding 3.5pc to last year’s total returns. Assuming you reinvested the dividends you would have tripled your money over those 25 years.

But the UK index lacks oomph. The FTSE 100 is a motley crew of miners, banks, industrials and a few retailers, often solid businesses but a long way from powering global innovation. Microsoft, the world’s most valuable public company, has a bigger market capitalisation than the whole FTSE 100.

But it’s not just the UK lagging behind: valued together at more than $13 trillion (£10.3 trillion), the Magnificent Seven are roughly equal in size to the German, Euronext (a pan-European index encompassing the French, Dutch and Belgian markets) and Japanese markets combined. Unsurprisingly,

Lifetime Isa allowance (counts towards main allowance)

British investors have voted with their feet. At the start of my career, 75pc of UK pension fund assets were invested in UK stocks; that number now stands at just 15pc. The Chancellor recently announced plans to create a British Isa, an extra £5,000 allowance to encourage more participation in London’s stock market. But since it’s only the wealthiest retail investors who have that extra £5,000 to spare, the proposals won’t make much of an impact.

What will I do with my money? I used to be a bond fund manager but higher risk equities tend to outperform over time. Past performance is no guide to the future – and at this stage in my life I am looking to complement other investments. I’ve needed to house a big family so property is a considerable proportion of those, alongside plain vanilla public and private global equities.

I’m a natural contrarian. My career-defining trade was buying longdated gilts before the Labour government was elected in 1997. Everyone was pessimistic about tax- and- spend policies. When the new Blair/ Brown government announced it was making the Bank of England independent, gilt prices rocketed. So does that mean I favour the UK stock market today?

Well, yes, I’m going to put half my new Isa allowance into UK stocks, investing gradually through an inexpensive tracker. I’m not expecting dramatic gains.

I will put the other half in the US market, although I’ll choose an index tracker with its 30pc exposure to the top seven stocks rather than going all- in. Those tech companies might seem fully valued but my view is that the AI theme has only just begun.

That may be a rollercoaster ride, complete with election fireworks, but with my more boring investments, let us see if the tortoise or the hare wins this race.