Investment High Risk Idea

whambamboo

dunstonh wrote:

Investment trusts do it frequently. Many investors have investments and a mortgage and just look at the number of people doing mortgaged buy to lets.... hmmm, maybe that last example supports your case exactly

To be fair, in this case, you are spot on.

It is a very high risk strategy and only for the experienced investor.

It's not that bad. If I have £20k on deposit, and I borrow £8k from M&S and invest it in let's say Indian equities, even if I lose the £8k, I can still pay it back.

As long as it's not your only money it's not too bad.

For me the issue is that the interest wouldn't be tax-deductible, and also you wouldn't get that much from one card.

But this idea had occurred to me too.

ManAtHome

Isn't this a similar idea to spread betting?

DocProc

When they see people on forums and bulletin boards talking about borrowing money to buy shares, because they feel making money on the stock market is so damned easy, there are a lot of people like me, who feel now is the time to 'SELL'.

I am deadly serious here.

whambamboo

DocProc wrote:

When they see people on forums and bulletin boards talking about borrowing money to buy shares, because they feel making money on the stock market is so damned easy, there are a lot of people like me, who feel now is the time to 'SELL'.

I am deadly serious here.

I don't think a single one-off post constitutes a trend....

dunstonh

It's not that bad. If I have £20k on deposit, and I borrow £8k from M&S and invest it in let's say Indian equities, even if I lose the £8k, I can still pay it back.

I'm not ruling it out as a concept. I save my annual tax bill in unit trusts but I accept the risk plus I have the ability to trade daily if required. However, the average individual hasnt got the ability, knowledge or risk profile to do it that short term.

High risk investments are high risk for a reason. If you invested in tech stocks/funds at the 2/3rds growth point you would now need around 900% growth to recover your initial investment (probably a little less than 900% now as that data is around 12 months out of date - 885% is probably closer to the mark ).

How many people invested in techs when they didnt have the risk profile for it? Its one thing to say you are high risk (or any other risk profile) but you need to know what it actually means.

whambamboo

dunstonh wrote:

I'm not ruling it out as a concept. I save my annual tax bill in unit trusts but I accept the risk plus I have the ability to trade daily if required.

Hmm, are you really saving your tax bill in unit trusts?

Surely you have a decent sum on deposit as well, so it's not really possible to say that it is your tax bill that is in unit trusts or in cash.

dunstonh

Hmm, are you really saving your tax bill in unit trusts?

Surely you have a decent sum on deposit as well, so it's not really possible to say that it is your tax bill that is in unit trusts or in cash.

Technically you are correct and back in 2003 I did use the savings accounts to pay the tax bill rather than the unit trusts. So, I had a reserve available for bad years. However, this year, like last and providing there is no change between now and January, it will be the unit trusts paying the bill.

To borrow money that you have to get a return of at least 5% on just to break even and for a period of only 6 months is something I wouldnt do.

Conrad

DontDoDebtKids wrote:

]i.e. don't invest what you can't afford to lose.

I aboslutely do not agree with this.

So many property investors I know say "if only Id borrowed Id now be so much better off'

Secondly 'none of us can afford to loose anything. I would'nt want to loose a penny, however you must confront this reality in order to make money investing.

So far I have'nt paid a penny of my main resi mortgage, its been all about building a portfolio of investments, which I cant do when Im 50 as the timeframe is too short