I can see a heap of nice worth FTSE 100 shares that I’d love to purchase through my Shares and Shares ISA. However what if I made a decision to go all in and make investments my full £20,000 in one among them?

As a rule, I’m in favour of diversification. It helps unfold my danger throughout totally different firms and sectors, decreasing the chance if one fails.

But it’s potential to take a superb factor too far, as Warren Buffett stated: “Diversification is protection against ignorance. It makes little sense if you know what you are doing.”

Warren Buffett would have some harsh phrases for me

He additionally stated: “Diversification may protect wealth, but concentration builds it.”

Buffett is clearly an funding genius however annoyingly, I’m not. I’m simply an unusual bloke giving it my finest shot. So I’ll proceed to diversify however with round 25 UK shares in my portfolio, I’ve gone far sufficient down that observe.

Now I’m questioning whether or not to dramatically enhance my stake in a price inventory I already maintain: FTSE 100 wealth supervisor M&G (LSE: MNG).

M&G shares have a mind-boggling forecast yield of 9.95% in 2024. If I used to be to speculate my whole £20k ISA allowance within the inventory, that ought to give me a surprising annual earnings of £1,990.

The shares are forecast to yield 10.2% in 2025. So subsequent yr I’d hopefully get a whopping £2,040. The issue is that double-digit yields like this have a nasty behavior of being reduce, as they grow to be unsustainable. And that usually wreaks havoc on the share price too.

I’m not courageous sufficient to go all make investments all of this yr’s Shares and Shares ISA into M&G, no matter Mr Buffett says. However I’ll contemplate investing £5k this yr, on prime of the £7k I already maintain. That will elevate my stake to £12k stake giving me a forecast earnings of £1,224 in 2025.

Then I’ll work in the direction of my objective by investing one other £4k in M&G subsequent yr after which £4k extra after that, lifting my whole holding to £20k. If the dividend holds, my earnings ought to exceed £2,000 a yr by 2026.

The M&G share price is down 4.45% during the last yr. Whereas the sky-high yield lifts its whole return into optimistic territory, that whole return of round 5% isn’t superb. I might have gotten related from a financial savings account.

It is a gorgeous FTSE 100 earnings inventory

Nonetheless, I purchase shares with a long-term view, and over time I feel M&G’s mixture of dividends and share price progress will beat any financial savings account. Albeit with extra volatility. But this isn’t assured and there are clearly dangers.

2024 has been robust on FTSE 100 excessive yielders like M&G. I anticipated them to fly when rates of interest have been reduce, at which level financial savings charges and yield would additionally fall. But charges now look set to remain increased for longer. That additionally makes it dearer for M&G service its £8bn internet debt.

CEO Andrea Rossi complained of a “challenging market environment of in the first half of the year”, which led to £1.5bn in internet outflows, whereas pre-tax working earnings fell 3.8% to £375m.

Capital era slipped however Rossi expects higher in 2025, lifting its forecast from £2.5bn to £2.7bn. The dividend seems safe and I’ll reinvest each one I get. I’d anticipate some share price progress too, when the financials sector will get a re-rating.