Higher risk for £10k what would you do?

Grouchy

Having come into some money and placed most of it 'sensibly' I would also like to invest around £10k in higher risk (but not silly) options but for a maximum timeframe of 1 year. I have read the Tim Hale book as suggested on here to me in the past, found it useful, but find he is best at safe-ish investment advice.

The way I'm looking at it is this is a bit of money to dip my toe in the water of a potential higher return options and at the same time learn through experience of investiment money which is not just in 'normal' savings ways. I won't be relying on income from this money for the year. I am also thinking (perhaps wrongly?) that is might be fun/interesting.

What would you do in my situation or what are the best options for me to consider?

Thanks in advance.

Lokolo

For 1 year? Stay out of the markets. Stick to cash.

Robin_TBW

One year isn't long enough.

kidmugsy

Gold in Zurich, silver in Perth (Western Australia)?

Too tame for you?


P.S. Why a year?

chewmylegoff

Depends what you mean by high risk. If you are prepared to lose 100% of your capital then personally I would simply take it to the casino and stick the lot on either red or black on the roulette wheel, depending on which colour you prefer.

If this doesn't sound like what you are looking for then you're probably not really prepared to invest in a high risk investment for a maximum of 1 year, as the outcome could well be exactly the same (but with higher transaction costs and tax on any gains).

brasso

Lokolo wrote: »

For 1 year? Stay out of the markets. Stick to cash.

I don't agree with this view, though I know it's often expressed. I don't go along with the idea that you shouldn't buy equities unless you have at least 5 years available.

5 years is a totally random number. You could still lose money over 5 years. Equally, if you'd put your 10K into UK or US equities in December 2012, you would be looking at 11K or 12K now, just 3 months later.

The OP has already said s/he has invested most of his windfall safely and wants to 'have a bit of fun' with 10K. I do something similar. My SIPP is very dull and 'safe' but I use my ISA to try different, riskier things.

If I was the OP I would spread the 10K across 3 or 4 choices. Emerging markets, and the BRIC countries, have not done as well as Europe/US over the last few months, so could be due a bounce. Someone here the other day was talking about an Indonesia ETF being a good short-term punt for those with a bit of appetite for risk.

Best go to Trustnet or similar, and run some screeners on performance over the last 1,3,5 years to get a possible feel of what might work for you, and buy more than one. Funds focusing on small companies tend to attract higher rewards (but higher risk) than the big blue chips.

If I were the OP I would have a figure in mind at which point to sell. If you think you would be happy with a 20% increase, then sell if you hit that mark -- even if it's only half way through the year. If you let such a healthy gain ride on, you are likely to see it dip back down again.

westy22

chewmylegoff wrote: »

Depends what you mean by high risk. If you are prepared to lose 100% of your capital then personally I would simply take it to the casino and stick the lot on either red or black on the roulette wheel, depending on which colour you prefer.

If this doesn't sound like what you are looking for then you're probably not really prepared to invest in a high risk investment for a maximum of 1 year, as the outcome could well be exactly the same (but with higher transaction costs and tax on any gains).

Ignoring fraud and the the mis-selling of extremely high risk ventures, I would be interested to know of any collective investment that has ever lost 100% of its capital value.

CKhalvashi

westy22 wrote: »

Ignoring fraud and the the mis-selling of extremely high risk ventures, I would be interested to know of any collective investment that has ever lost 100% of its capital value.

If the markets they were in were to collapse at the same time, then this would be the case.

I have around 40% of my stock investments in Russia and CIS (and 70% of total investments, as I have shares in private companies), and I'm trying to hedge back at the moment, as whilst they've performed remarkably well, I am feeling a little overexposed.

If Russia were to collapse tomorrow, I know I'd lose as much as 60% of my total investment pot, and this is, in effect, one company investing in others, so roughly the same thing!

Over a year, it's too high risk for me (most of the holdings, we've held for 3+ years now)

CK

Lokolo

brasso wrote: »

I don't agree with this view, though I know it's often expressed. I don't go along with the idea that you shouldn't buy equities unless you have at least 5 years available.

5 years is a totally random number. You could still lose money over 5 years. Equally, if you'd put your 10K into UK or US equities in December 2012, you would be looking at 11K or 12K now, just 3 months later.

The OP has already said s/he has invested most of his windfall safely and wants to 'have a bit of fun' with 10K. I do something similar. My SIPP is very dull and 'safe' but I use my ISA to try different, riskier things.

If I was the OP I would spread the 10K across 3 or 4 choices. Emerging markets, and the BRIC countries, have not done as well as Europe/US over the last few months, so could be due a bounce. Someone here the other day was talking about an Indonesia ETF being a good short-term punt for those with a bit of appetite for risk.

Best go to Trustnet or similar, and run some screeners on performance over the last 1,3,5 years to get a possible feel of what might work for you, and buy more than one. Funds focusing on small companies tend to attract higher rewards (but higher risk) than the big blue chips.

If I were the OP I would have a figure in mind at which point to sell. If you think you would be happy with a 20% increase, then sell if you hit that mark -- even if it's only half way through the year. If you let such a healthy gain ride on, you are likely to see it dip back down again.

I didn't say anything about a minimum of 5 years. But 1 year IS way too short.

I too don't believe 5 years, that's 20% of the life I've lived! I'm not waiting that long. I go for a minimum of 2-3 years. In the short term mad things can happen. One of my stocks I am following rose 16% yesterday. I expect it to raise another 5-10% today at least. Lloyds has doubled lately. But this could quite easily be the opposite. Having a minimum timescale can get rid of these bumps.

Yes the last couple of years have been good, but what about the couple of years before that? Would you really have said "Yeh stick it in a few funds and you'll do great!".

westy22

Lokolo wrote: »

Yes the last couple of years have been good, but what about the couple of years before that? Would you really have said "Yeh stick it in a few funds and you'll do great!".

Thankfully, I did tell myself that - and today I'm very glad of it!

brasso

Lokolo wrote: »

I didn't say anything about a minimum of 5 years. But 1 year IS way too short.

5 years is the usual mantra.

2-3 years is no less arbitrary. Where will your 16% gain investment be in 3 years? Who knows. So 1 year is "way too short" but 2 years is just fine?

The OP wants a "higher risk" punt. He is not asking the usual question: "What can I do with my money for 1 year that will ensure I preserve my capital?" If he had asked that question, my reply would have been different.

Lokolo wrote: »

Yes the last couple of years have been good, but what about the couple of years before that? Would you really have said "Yeh stick it in a few funds and you'll do great!".

I wouldn't say that then, and I wouldn't (didn't) say that now.