£500-£1000 risk / investment?

tux130582

Hello


please can you advise where you think £500 to £1000 should be invested for the biggest gains / losses?

Ive done share trading before but dont like the fact every transaction costs £12 + to buy/ sell. (not really worth it for a small amount?)

Would a small unit trust be the best way in a high risk fund?

Any information much appreciated!

thanks

cepheus

If you want large potential gains with a limited loss of £1000 try a traded option. If you think the price of the stock or commodity is going down buy a put option, or up a call option. It could easily double, triple or more in value alternatively you could end up with nothing! More of a gamble than an Investment though!

Another way is buy exposure to say £10,000 worth of stock through a spread better, using the £1000 as margin. To buy £10,000 worth for a 100p stock you bet £100 per point. You could place a stop at 90% of the present price which should limit your loss to £1000.

Note, with stockbrokers and shares it is worse than just the fees, since you pay £5 of stamp duty every time you buy, and the spread on top, so a round trip might cost you £30+ or 3%. With spread betting it should be much less and you will have £10,000 worth of movement.

If your happy to bet on the indices such as the FTSE100 it can cost about 0.02% of your effective exposure per round trade compared with 3% using your present method!

Linton

This IMHO is gambling, not investing.

If you have £500-£1000 I suggest you buy one broadly based growth fund and start saving for your next fund purchase.

You dont want to be looking at individual shares because you could not buy a sufficient range to spread your risk. Also, the costs are disproportionately high.

Loughton_Monkey

tux130582 wrote: »

please can you advise where you think £500 to £1000 should be invested for the biggest gains / losses?

I can't help with the 'biggest gains' bit.

But if you want to invest for 'biggest losses' then I can put you in touch with some nice Nigerian-based operations that could meet your requirements.

To ask where you can get the 'biggest gains' is tantamount to asking what is the quickest way to get from the 25th floor of a building down to the ground floor. There are several answers, but none of them will answer your 'real' question.

atush

I am with Linton on this one. Buy a fund (or investment trust) with each lump sum then save for the next.

Alternately, you can save per month into an investment trust savings plan. 50 quid a month into one, then when yo have more money per month buy another. buying costs are very low, and the drip feeding into the market will help you smooth ot market volatility and when prices drop you jut get more uniters per month.