Is it fanciful imagining how rich one could be if only they had invested in a particular ASX stock?
I say no, because it keeps you motivated to keep researching and investing.
It also reminds you that diversification can not only reduce risk from losers, it allows spectacular winners to carry the whole portfolio upwards.
On that point, there is one small-cap stock that's been making waves in 2024.
In fact, it has almost tripled in share price so far this year.
Let's check out what's happening:
Image source: Getty Images
Cast your mind back to spring
Perth biotech PharmAust Limited (ASX: PAA) may only have a market capitalisation of around $129 million, but not so long ago it was even smaller than that.
Let's go on a very short journey in the time machine — back to November.
At that time the PharmAust share price was hovering around 7 cents. In fact, it had been more or less at that mark for a good three years.
Hypothetically, let's imagine you bought $30,000 worth of shares then.
At the start of December, the company presented some favourable results from a study of its monopetal product. The solution aims to treat motor neurone disease (MND), which is known as Lou Gehrig's Disease in North America.
The market took notice and sent the stock shooting up.
But then just two weeks ago, more positive test results came out, that really put a rocket under the ASX stock.
The wash up is that the shares are 33 cents at the time of writing.
That $30,000 you invested just four months ago? That's now worth a cool $141,428.
How does that compare to a term deposit?
This biotech stock and a bunch of losers = win
Now, no one is expecting that you'll land this sort of winner every time.
But if you can manage one or two multi-baggers within a diversified portfolio, that's all you need to grow your wealth.
Check this out.
Say, at the time you bought PharmAust shares, you also bought four other stocks for $30,000 each.
Then in the four months that PharmAust was going crazy, the other four were having a miserable time to dive 25% each.
Your overall portfolio would still be a stunning 54% up in just one-third of a year.
Good luck with your investments.
