More Risk More Potential Gains Required

danield

Hi,

I wonder if anyone could help me choose an investment that fits my requirements.

Currently I have a fair bit of money sitting in a Savings Account. I would like to invest a very small amount (maybe 1 or 2 grand) in something that offers greater returns (potentially 10% +). I am prepared to risk the capital for a better potential rate of return.

I have already used up my ISA allowance and have a regular savers account. Additionally I have money tied up in Premium Bonds.

I would like to try investing a couple of grand to experiment with riskier investments. I can afford to lose this money if it all goes tits up.

Any advice would be greatly appreciated. Otherwise I'll put it on 3:40 at Chepstowe.

danield

pkrnts

Have you invested in the full £7ks worth of ISA or just the 3k cash part?

If just the cash part then get yourself a mini S&S ISA and look into unit trusts/oeics/investment trusts. Lots of threads around on these topics too.

dunstonh

Well, you currently have around 10,000 areas to pick from. Rsk is not an on/off situation. It is a sliding scale. Usually you would do best to pick a range of funds and build a portfolio of funds that average out to your risk profile.

After deciding where you want to invest, you then look at the best tax wrapper for doing it. This could be ISA, Collective (OEIC, UT etc), Investment bond, investment trust or pension.

cheerfulcat

danield, a better place to look for investment discussion is the Motley Fool. Both the discussion boards and the main site provide a lot of information. There was an article a while ago on investing smallish sums; it's two years old but still valid IMHO. A less risky approach would be to buy a small selection of ETFs.

Chrismaths

The capital shares of split cap investment trusts are geared, so structurally have a higher risk/reward profile. Also listed CFDs (which have a guaranteed stop loss) are high risk and reward. If your alternative is gambling, then these are other ways of doing it.

EdInvestor

Have a look at this idea

Very suitable for a "starter" investment.

moneyandmountains

Chrismaths wrote:

The capital shares of split cap investment trusts are geared, so structurally have a higher risk/reward profile. Also listed CFDs (which have a guaranteed stop loss) are high risk and reward. If your alternative is gambling, then these are other ways of doing it.

However, this was meant to be a starter investment.

No novice investor should go anywhere near capital shares of split-caps, unless they have someone doing the investment for them. Zeros maybe, but as a starter investment it is probably not worth the complication.

Better to learn about investment with standard funds, and progress onto structured products once the basics have been understood.

All fund investment is going to be higher risk than cash.

There are a few free portfolio planner tools on the web, that may allow you judge what sort of investor you are. Note: this is not a recommendation of the IFA / fund managers that provide these.

See: https://www.bestinvest.co.uk
and https://www.fidelity.co.uk

danield

Thanks for all the replys.

pkrnts - You're right - it's only the £3000 cash mini-isa i've invested in so far this year, so hopefully I can use an s&s ISA tax wrapper with the investment I choose. Never heard of oeics before so I'll be researching that.

Thats plenty for me to start my research, however any other ideas would be much appreciated.

Thanks again for all the advice. Much appreciated.

danield

pkrnts

One place/page I found invaluable for s&s ISAs was http://www.incademy.com/training/ISAs/Introduction/1008/10002/

Explains pretty much everything, dos and donts, terminology etc.

Chrismaths

However, this was meant to be a starter investment.

No, this was an alternative to the 3:40 at chepstowe

Better to learn about investment with standard funds, and progress onto structured products once the basics have been understood.

A capital share is not a structured product, it's a class of share of an investment trust. It's no different from investing in normal geared investment trust. The guy said he had most of his money in cash, and wanted to generate some super-dooper returns on his 'play' money. If the markets go up, these will go up more. If the markets go down, they will go down more. That's all gearing means. So long as you have limited liability, it's not rocket science.

All fund investment is going to be higher risk than cash.

And this is less risky than the 3:40 at Chepstow, which is a negative sum game.
Cash in a portfolio lowers the overall risk. When you have cash you can afford to take risks with small parts of your wealth.