I’m now well down on my investment and signs of a turnaround are hard to come by. So should I cut my losses and move on to something else?

What’s been going wrong?

There’s been a lot going on in the insurance industry recently. But Brown & Brown has had a tougher time than its rivals. The biggest story has been staff leaving – 275 in a day, to be precise. Importantly, they took their clients with them. 

Brown & Brown is taking legal action on grounds of foul play. They’re far from alone in this and the early signs are very promising. Leaving the details of the case aside, it does illustrate something important. In the insurance industry, clients go with their brokers.

It’s not okay for a competitor to steal them. But they can decide to leave of their own free will and that creates a risk for Brown & Brown.

AI threat?

I expect Brown & Brown’s case to result in a settlement and for life to go on. But the point about human relationships is important – and it might be a good thing.

Another reason the stock is down is the emergence of artificial intelligence (AI). AI platforms have started to emerge for personal insurance lines. 

This isn’t the kind of thing that Brown & Brown deals in – it focuses on much more specialised commercial lines. But how long until AI figures this out?

That’s been weighing on the share price recently. The risk, however, might not be as significant as the stock market seems to think. 

There are a couple of reasons for this. But the most important might be to do with the staff issues that Brown & Brown has been facing recently.

Human relationships

One of the things that Brown & Brown’s recent challenges highlight is the importance of client relationships. But that might help the firm with AI. The more important these relationships are, the harder it is for AI to disrupt the existing operators. And that might be very valuable. 

Another advantage Brown & Brown has is scale. This provides value to both parties in an insurance transaction. It gives them the ability to negotiate lower prices with carriers, which helps customers. And it helps carriers with data and visibility across the industry.

It’s never wise to dismiss the threat of AI entirely. But this might be an industry that isn’t so easy to disrupt as it looks. 

Looking ahead

The situation is by no means settled. But the stock is trading at an unusually low multiple as a result of the recent challenges.

Despite this, analyst expectations for future earnings are still pretty positive. The current consensus is for $4.51 this year, rising to $5.26 by 2028.

That could obviously change. But it implies a price-to-earnings (P/E) multiple for this year of just under 13, which is historically cheap. 

On that basis, I’m interested in buying. I don’t have a strong sense of when I think the stock might turn around, but I’m happy to wait at today’s prices.

The post This S&P 500 stock continues to underperform in my ISA. What’s my next move? appeared first on The Twelfth Magpie.

It’s the thing everyone worries about before getting started. But the prospect is less threatening than it might seem.

One way to lose

The market value of houses going down doesn’t matter if you only want to live in one. It’s only a problem in two situations.

One is when people want – or need – to sell. And the other is when there’s debt involved that they need to refinance.

Outside these situations, though, lower prices aren’t an issue. And there’s no reason why either should be the case with stocks.

Investors should always make sure they have enough excess cash before buying stocks. That means they won’t have to sell in a crash. They should also absolutely avoid using debt to buy investments. That immediately takes the risk of having to refinance to zero.

The only way to lose money in a stock market crash is by selling, either to raise cash or due to debt. But these are risks investors don’t have to take.

Warren Buffett

Warren Buffett might be the greatest investor of all time. But this isn’t the result of anticipating downturns and getting out of the way. 

The Covid-19 pandemic is a great example. When shares crashed, Berkshire Hathaway didn’t look to liquidate its stock portfolio.

With a few exceptions, Buffett’s firm didn’t sell low. The company’s financial position was strong enough that it didn’t have to.

Source: Fiscal.ai

As a result, Berkshire’s book value didn’t go down during the pandemic. And it’s now at the highest level it’s ever been. 

Stock market crashes are inevitable and unpredictable. But making it to the other side is more important than seeing them coming.

Investing like Buffett isn’t easy. But investors can copy the approach of managing their finances to remove the risk of a crash.

Value investing

Buffett’s success wasn’t built on anticipating stock market movements. It’s the result of finding opportunities to buy stocks when they’re undervalued. 

That’s what I’m looking to do in my own portfolio. And one name I’m looking at right now is US insurance broker Brown & Brown (NYSE:BRO). 

The stock price is at a 52-week low. And a big reason for this is that artificial intelligence (AI) products targeting insurance are starting to appear. 

At the moment, those products mostly target generic lines, which isn’t what Brown & Brown specialises in. But that isn’t all. The firm’s size allows it to attract better rates from carriers and offer these to customers. And that’s something AI can’t replicate.

Foolish approach

Investing well isn’t about knowing when the next stock market crash is coming. But it is about being able to make it through. Investors who buy shares at low prices stand to do well over time – even if the shares go lower in the short term. And that’s my plan.

Brown & Brown has a business that I think is harder to disrupt than the market realises. That’s why I’m buying it at today’s prices.

The post Will I lose money if the stock market crashes? appeared first on The Twelfth Magpie.

The answer is simple. The most important things investors can do to have a shot at a million are invest regularly and give themselves time.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Contribution limits

The chance to invest up to £20,000 a year without having to pay taxes on dividends or capital gains is a terrific opportunity. And it becomes more and more valuable as tax rates rise and thresholds fall.

Even for someone who contributes the full amount – which I try to do each year – it takes time to get close to £1,000,000. Over the last 10 years, the average annual return has been just under 10%.

At that rate, it takes around 18 years to get to a million and that’s for someone who invests the full £20,000 a year. But it’s impossible to take the last step on a journey without taking the first one.

With my ISA, I’m focused on investing as much as I can as often as I can. And whatever return I get from the stock market, I’m convinced it’ll be better than keeping money in cash over the long term.

Getting ahead

Obviously, anyone who can earn a bigger annual return will get there faster. But while there’s nothing wrong with aiming for outperformance, investors need to be careful.

It can be easy to get drawn into what look like huge opportunities to make a 200% – or more – return within a couple of months. The trouble is, though, this can be very risky. 

The chance of losing money in the stock market is high enough without making it worse by chasing huge returns. And the cost of making a mistake compounds over time.

For the vast majority of people – me included – the best thing to do is to look for investments that can earn good long-term returns. Fortunately, I think there are a lot of opportunities in today’s market.

A stock I’m buying

One stock I’ve been buying is Brown & Brown (NYSE:BRO). The company is a US-based insurance broker that focuses on specialised commercial lines for mid-sized firms.

The stock has been falling recently because investors are worried about artificial intelligence. AI has been making progress in offering personal insurance, so how long until it cracks commercial lines?

It’s a good question and I’m not sure what the answer is. But while this is a risk, Brown & Brown’s scale does give it a big advantage that’s difficult for a competitor to emulate. 

Having a huge book of business helps the firm negotiate better rates from carriers and therefore offer better deals to customers. And that’s going to be extremely difficult for a new competitor to disrupt.

Getting rich… slowly

Shares in Brown & Brown currently trade at a forward price-to-earnings (P/E) ratio of 14. I think that’s cheap for a firm that’s been growing revenues at 11% a year over the last decade.

Importantly, though, I’m not looking for the stock to explode in the next few months. I’ve been buying because I think the cash the company is set to generate can offer me a good long-term return.

The post Here’s how I’m aiming for a million in my Stocks and Shares ISA appeared first on The Twelfth Magpie.

The stock market isn’t sure what to make of AI – and I have some sympathy with this. But in the case of one of my favourite companies, I think investors are getting it wrong in a big way. 

AI uncertainty

Exactly what AI means for software companies is difficult to work out. So it’s not a big surprise to see share prices all over the place.

Where I didn’t expect to see big movements was in the insurance brokerage industry. On Monday (9 February), though, shares in pretty much all the major US firms fell sharply. 

Arthur J Gallagher and Willis Towers Watson were among the firms that saw their share prices drop due to fears of AI disruption. But I think this is a big mistake – and a huge opportunity for me.

Saying that one of my favourite growth stocks is an insurance broker sounds like a cry for help. But I jumped at the chance to add to an investment I’ve been building in my ISA at a discounted price.

What’s the risk?

The concern is AI tools that let consumers go directly from insurers without needing brokers. These are real, but I think the market’s reaction to them is unjustified.

One reason for this is that the major brokers don’t really deal in personal lines. They focus on commercial policies that are more specialised and therefore much harder to disrupt.

The brokers are also able to offer better value to their customers. This is because their scale helps them negotiate better terms from carriers – something an AI start-up or chatbot can’t replicate. 

This is why I think the stock market is making a mistake. AI might change the personal insurance industry, but this isn’t what the brokers do and it’s much harder to match them at their own game.

Brown & Brown

The stock I like in this industry is Brown & Brown (NYSE:BRO). As well as the broader protective forces, I think it also has some unique advantages.

Willis Towers Watson has a big consulting division. This part of the firm makes money by charging for billable hours, but if AI speeds up the paperwork, the amount it can charge might go down.

Arthur J Gallagher combines its brokerage services with a claims processing division. Again, if AI agents turn this into a low-value service, that’s bad for the company’s revenues and profits. 

Brown & Brown doesn’t really do either of these – it focuses on connecting insurers and customers. But despite my scepticism at how easily this can be disrupted, it still sold off on Monday.

Dislocation

The biggest challenge for Brown & Brown right now isn’t AI. It’s the execution risk of trying to integrate a business it acquired last year into its existing operations. 

That’s not something I’m ignoring, by any means. But the risk isn’t any bigger than it was a week ago and the stock is a lot cheaper than it was.

Charlie Munger once said most investors only get around 10 truly great opportunities in their lifetimes. Time will tell, but I think this could be one of mine.

The post A ‘once-in-a-lifetime’ chance to buy 1 of my favourite growth stocks?  appeared first on The Twelfth Magpie.

But I think there’s an upside to this. Let me explain.

The AI problem

There are lots of things that could cause share prices to fall dramatically. Yet the biggest of them at the moment is artificial intelligence (AI) and I think this looks like a real problem.

Meta, Microsoft, Alphabet, and Amazon have all announced progressively higher capital expenditure plans for 2026. In other words, they’re going even bigger on their AI spending.

There was already scepticism about whether this is going to pay off. And the stock market’s general reaction to the news suggests there’s still concern about an AI bubble.

Even if they’re right though, AI growth could still spell problems elsewhere. Both the US and the UK economies rely on high employment to drive strong consumer spending. 

If AI really does take off, it looks likely to threaten a significant number of jobs. And in that case, the rest of the stock market could be in big trouble if employment falls and spending drops.

History lessons

When it comes to stock market crashes, the lessons of history are relatively clear. Investors who own – and continue to own – shares in high-quality companies tend to do well over the long term.

The so-called ‘Nifty Fifty’ was a collection of US stocks that investors thought were infallible. But they fell sharply during the 1973-74 stock market crash.

Some never recovered, but the ones that did more than made up for it. According to estimates, a $1,000 investment in Philip Morris from 1972 would be worth around $43,000,000 today.

Even if all the others had gone to zero, someone who bought all 50 before the crash would have done very well, over time. And that’s what I think investors need to remember in today’s market.

What to do

The lesson of the Nifty Fifty resonates with me. So I’m trying to build my own collection of high-quality shares that I intend to hold onto whatever happens with the wider stock market.

One of the stocks I’ve been buying is Brown & Brown (NYSE:BRO). The firm’s an insurance broker for businesses that are too big for their local broker, but too small to interest global operators. 

Its big advantage is its scale. This allows it to attract better rates from carriers and offer its customers the kind of value they can’t get anywhere else. 

It also works the other way around – having more potential customers incentivises carriers to offer Brown & Brown better rates. And I think that amounts to an extremely strong long-term advantage. 

Investing risks

Even with the best companies, investing in the stock market always comes with risks. The Nifty 50 is a good example of this – a lot of strong businesses never recovered from the related crash.

With Brown & Brown, the main thing that concerns me is the prospect of customers consolidating or going out of business. And AI automation might make that a real possibility.

I can’t guarantee that all of my investments will work out. But what I can do is build a diversified portfolio to give myself the best chance of having the ones that do make up for the ones that don’t.

The post A stock market crash might now be unavoidable. Here’s what I’m doing… appeared first on The Twelfth Magpie.

The index is heavily concentrated around a few very similar companies. And the rest of the US economy doesn’t give me much encouragement either.

Concentration

Overall, the S&P 500’s done very well in recent years. But not every company’s done equally well — a handful of strong performers have offset much weaker results elsewhere.

For example, Microsoft’s revenues grew by around 15% in 2025, while Kraft Heinz saw a 2.5% decline in sales. For the index as a whole though, the net effect’s positive.

Microsoft’s sales increased by $36bn, while the drop at Kraft Heinz was less than $1bn. In other words, growth at bigger firms offsets a lot of smaller businesses going backwards.

The trouble is, it also creates risk. If at business like Microsoft falters for any reason, I don’t think there are going to be enough Kraft Heinz-like firms to offset this. 

The US economy

Something similar is true of the US economy. Consumer spending – which accounts for around 70% of US GDP – looks resilient, but there’s more going on beneath the surface.

In reality, the overall resilience is being driven by strong contributions from the most well-off in society. And just like the index, this has the power to cover a lot of weakness elsewhere. 

A a result, the same risk emerges. If anything causes the wealthiest households in the US to rethink their consumption levels, this is unlikely to be offset by increased spending elsewhere.

As a result, I’m wary of the idea that investing in an S&P 500 fund is a good idea right now. But I do think there are potential opportunities within the index.

Insurance

One stock I’ve been buying recently is Brown & Brown (NYSE:BRO). The stock’s 37% off its 52-week highs, but I think there are some strong signs for the underlying business.

The insurance broker’s been dealing with two major issues recently: a weak market for insurers and integration costs after a large acquisition weighs on margins.

Both are genuine challenges, but I expect they will prove to be temporary. So I think the two of them combining to push the stock to unusually low levels could be a huge opportunity.

Brown & Brown aims to combine the advantages of local knowledge with the economic benefits of scale. In an industry I think will be durable, that’s a powerful combination.

Investing strategy

One of the things I want from my Stocks and Shares ISA is diversification. And that’s why I’m unwilling to just ignore US stocks even when the S&P 500 as a whole looks risky.

I think Brown & Brown could be set to benefit from a double boost. A more helpful market for insurers could push sales higher while lower integration costs cause margins to expand.

The company’s long-term competitive position also looks strong to me. That’s why it’s still on my ‘to-buy’ list as I look for stocks to scoop up during a tricky time for the S&P 500 and the US economy.

The post The S&P 500 looks risky, but I’m still buying this stock appeared first on The Twelfth Magpie.

In general, the UK has a reputation for being risk-averse when it comes to investing. But there are some terrific incentives available for those who want to participate.

Stocks and Shares ISAs

There are lots of challenges when it comes to investing. These include figuring out what to buy, working out when to buy them, and deciding how to build and balance a portfolio.

None of those questions is straightforward, even for the best fund managers. And opening a Stocks and Shares ISA doesn’t really help make things any easier. 

What it does do, however, is let investors keep more of their returns. Investors who keep their investments in an ISA don’t have to pay taxes on capital gains or dividends.

That can be a big advantage over time, especially for those who do well. And there’s another big advantage to a Stocks and Shares ISA for someone like me wanting to retire early. 

Unlike a Self-Invested Personal Pension (SIPP) or a Lifetime ISA (LISA) investors can take money out of a Stocks and Shares ISA at any time. They don’t have to wait until retirement.

That’s why it’s my vehicle of choice. As someone looking to retire early, the tax advantages and the opportunity to access my returns at any time are a powerful combination.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

What to buy?

Opening a Stocks and Shares ISA, though, is only half the battle. The other – arguably more important – half is figuring out which stocks to buy in it. 

One that I’ve got an eye on is Brown & Brown (NYSE:BRO). It’s a US-based insurance broker that UK investors might not be familiar with, but I think it’s well worth checking out. 

The stock fell 23% in 2025, for a couple of reasons. A weak insurance market meant lower commissions and the firm also made a major acquisition that it now has to integrate.

Both of those risks are ongoing in 2026, but the stock is unusually cheap as a result of its falling share price. And that’s why I’m interested in buying it.

The company has a market value of $26.5bn. Adding in another $6.5bn in debt takes total enterprise value to just under $33bn. 

In that context, $1.2bn in annual free cash flow implies a return of just under 4%. And I think there’s a lot of scope for both recovery from the ongoing challenges and future growth. 

Investing for retirement

Brown & Brown isn’t much of a dividend stock – it typically looks to reinvest the cash it generates to drive higher returns in the future. And that’s fine with me.

The key thing for the company is that there’s still a huge number of potential acquisition targets going forward. That’s why I’m expecting further growth in future.

Realistically, I’m still quite a way from retirement. But I don’t think it’s ever too early to start thinking about a Stocks and Shares ISA and what to put in it.

The post Why I’m buying cheap stocks in an ISA to try and retire early appeared first on The Twelfth Magpie.

I think it’s fair to say the stock market now has its eyes firmly set on Rolls-Royce shares. But what are the names that have fallen out of fashion despite long-term growth prospects?

Bunzl

FTSE 100 distributor Bunzl (LSE:BNZL) has had quite a fall. The firm’s a distributor of non-food consumables and it’s been having some recent difficulties with its US business.

A weak macroeconomic environment and some execution errors have resulted in the stock falling 33% this year. And there’s a risk the difficult trading conditions might continue. 

The company however, has a strong record when it comes to growth. It’s been a prolific acquirer and a fragmented market should mean opportunities going forward.

Every new acquisition boosts Bunzl’s revenues while removing a competitor. And at a price-to-earnings (P/E) ratio of 15, I’m looking to buy it before the firm’s update next month.

Wise

Wise (LSE:WISE) is another UK stock I think investors systematically underestimate. I’m hugely impressed by the way the payment processor goes about its business. 

As an example, the firm’s take rate – the amount it claims as a fee for processing transactions – has fallen from 0.67% in 2024 to 0.52%. But this just makes the firm harder to compete with.

Facilitating cross-border transactions means the risk of foreign exchange fluctuations is real. And this can have a bigger effect on profits than it would with a different company.

For the time being though, the firm is growing its users, payment volumes and revenues as a result. So with the stock down 15% since the start of the year, it’s definitely one to consider.

Brown & Brown

Outside the UK, Brown & Brown (NYSE:BRO) shares are down 31% in the last six months. This is due to a combination of a big acquisition and a weak insurance market.

The company funded its deal for rival firm Accession by increasing its outstanding share count by almost 14% and raising the same amount in debt. That makes the move risky. 

Brown & Brown however, has a terrific record of integrating new businesses. And the company issued stock at an EBITDA multiple of 19 to buy Accession at a multiple of 16.5. 

Using a higher-priced stock to buy a lower-priced one creates an immediate boost to profits. So this could turn out to be a smart move and I’m buying the stock as a result.

Opportunities?

Investors hoping to find the next Rolls-Royce should be looking for stocks that have recently fallen out of favour. And the obvious candidates are software-as-a-service companies. 

I’m wary about the threat of AI disruption for these businesses, so I’m generally staying away. But UK investors don’t have to look far to find other growth stocks that are out of favour.

From there, it’s about being willing to consider buying when others don’t want to. And the story of Rolls-Royce in recent years shows us what can happen when things go well.

The post Missed Rolls-Royce? Here are 3 out-of-favour growth stocks to consider right now appeared first on The Twelfth Magpie.

Artificial intelligence (AI) is creating huge opportunities, but it’s also threatening a number of established businesses. With that in mind, I’m looking to be careful with my investing.

Brown & Brown

Shares in insurance broker Brown & Brown (NYSE:BRO) fell 6% on Tuesday (28 October) after the firm’s earnings report. And looking at the results, I think I can see why.

Organic revenue growth of 3.5% was the weakest it’s been in some time. This was largely due to an unusually competitive insurance market, which the company can’t do anything about. 

While the past isn’t a guarantee of the future, history tells us that these environments don’t tend to last for too long. And I’m looking to use this as an opportunity to buy the stock. 

I’m really impressed by Brown & Brown as a company. It combines economies of scale with the benefits of local expertise and it operates in a market that’s undergoing consolidation.

I think that means there’s significant scope for growth, both through higher margins and via acquisitions. And the firm is in the process of working through a deal worth almost $10bn.

A deal of that size inevitably brings integration risk and they’ve paid a high multiple for it. But I’m excited to have the opportunity to buy the stock at a price below $85.

Salesforce

Analysts have pretty optimistic views of Salesforce (NYSE:CRM) at the moment. But I’m extremely wary about what AI means for the future of the company’s business. 

The firm’s Agentforce platform allows customers to build and deploy their own autonomous AI agents. And it’s saving Salesforce money in the form of 4,000 fewer customer support staff. 

The trouble is, I think it’s also likely to stunt the company’s growth. Specifically, I suspect AI is going to mean other businesses are in a position to build their own AI agents themselves.

Salesforce’s key competitive strength has been its switching costs. And I don’t expect those to disappear, which should give the company the ability to generate growth by raising prices. 

The firm’s ability to do this, though, is going to be limited if customers can do something similar at a lower cost elsewhere. And this is showing up in estimates of future earnings.

Analysts expect earnings per share to grow at 9% a year up to 2028. That’s not intrinsically terrible, but I don’t think it justifies me buying the stock at a price-to-earnings (P/E) ratio of 37.

Opportunities and threats

As an investor, I want to own shares in companies that are going to be worth more in the future. And that means ones that are going to be able to grow their earnings for a long time. 

I think Brown & Brown fits the bill and I currently hold it. A fragmented US middle market should bring growth opportunities in the future and makes short-term weakness a buying opportunity for me.

With Salesforce, the story is different. The rise of AI looks like a threat to its competitive position and growth prospects, which is why I think I have better opportunities elsewhere.

The post Growth stocks: 1 I’m buying in November and 1 I’m staying well away from appeared first on The Twelfth Magpie.

I think however, there are long-term opportunities in the shares that are out of fashion at the moment. And one stock I’ve started buying recently is Brown & Brown (NYSE:BRO).

Insurance

This is an insurance broker or, more accurately, a collection of businesses that connect people looking to insure specific risks with companies selling protection.

The firm focuses on mid-market clients. These are customers needing more than a local broker can offer but benefitting from a more bespoke service than large multinationals offer.

That speaks to Brown & Brown’s business model, a decentralised approach allows its individual operations to use local knowledge and maintain close relationships with clients.

The firm however, also benefits from the kind of scale that helps it negotiate preferential terms with insurers. And that’s another important strength of the business.

Growth

Acquiring other businesses is a key part of the company’s growth strategy. This immediately boosts revenues, but it also brings in valuable expertise and established client relationships.

This can be risky and the range of available targets is decreasing as both Brown & Brown and Arthur J Gallagher are making acquisitions. But I think there’s still reason for optimism.

Importantly though, the insurance brokerage industry is more fragmented than most, with at least half the market distributed among thousands of smaller operations. That means there should be opportunities available for Brown & Brown to pursue for some time. And that’s even before getting into a huge international market beyond the US. 

Why now?

Brown & Brown shares are up 87% over the last five years, but I think now is my time to buy. And this is because of what’s going on in the insurance industry.

Insurance markets are competitive at the moment, with a lot of carriers competing for business. And that’s resulting in lower prices – and lower commissions for brokers. There are signs of this continuing too. Last week, Progressive – a US insurer with a disciplined approach to underwriting – reporting premium growth below expectations last week.

Brown & Brown reports earnings next week and a modest update could make the stock fall. But I think the share price is attractive where it is and I don’t want to risk it going up.

Long-term investing

Brown & Brown’s the kind of stock I like to buy – a growing business in an important industry. And the combination of scale and local expertise is also a strong one.

Most of the time, the stock market recognises this and reflects it in the share price. But more competitive insurance markets can create unusual opportunities. That’s what I think I’m seeing at the moment. And that’s why I’ve been buying the stock.

The post Meet the S&P 500 stock I’ve just added to my portfolio appeared first on The Twelfth Magpie.