Speculative Investments

moneyfoolish

I'm very cautious with my savings which are completely held in Cash ISAs and Santander 123 accounts. However, for a bit of fun I've decided speculate £5000 via an S&S ISA to accumulate (or not as the case may be). I'm looking for investment trusts or funds which are likely to appreciate relatively quickly and dramatically (I'm well aware they could fall equally quickly and dramatically!) and am looking for some ideas. The only area I've identified is Biotech and Heathcare. Do any of you experts have ideas on the best areas of high reward/risk at the current time?

dunstonh

I'm very cautious with my savings

Noted....

I'm looking for investment trusts or funds which are likely to appreciate relatively quickly and dramatically (I'm well aware they could fall equally quickly and dramatically!) and am looking for some ideas. The only area I've identified is Biotech and Heathcare.

So, given your cautious nature, you have decided to go gung ho into very high risk areas.

Do any of you experts have ideas on the best areas of high reward/risk at the current time?

Nobody does. That isnt how it works.

Going from one end of the risk scale to the other is a recipe for disaster. A common mistake of new investors is to invest above their risk profile and then on the first major loss, pull out to crystallise that loss and then never invest again saying that investing is bad. It isnt investing that is bad. It was how they invested that was bad.

I know you say you are looking for something to speculate with rather than invest but it just seems daft to go from 100% cash to having some in very high risk investments with nothing in between.

Linton

If you are investing seriously then I believe you should start off with a general global fund or possibly a balanced shares/bonds fund. Dont invest in the wilder areas until you can do it with a relatively small % of your total wealth.

dryhat

Bitcoin and other crypto-currencies look set to have another fantastic year based on sound fundamentals and are well worth looking at.

My particular basket of currencies are already up 9% in 2014.

jimjames

If you are cautious why would you jump straight in to some of the most risky investments going? Surely you would want to have investments that are more likely to return your capital but grow more slowly.

There are many funds you could use for a balanced portfolio inside an ISA but you are likely to get fingers badly burnt and be put off investing but just picking the most risky options.

Wouldn't it make more sense to build up with funds that are less risky like income funds, some bonds and a mix of trackers so the speculative ones are part of a bigger portfolio not the only components of it.

If you are looking for the most risk then things like gold funds have dropped hugely and some emerging market funds are way off their peaks. Buying something that has dropped may mean you buy with a big jump possible. Or may buy as it drops further. Are you prepared for 75% drop in the money you invest? If you are then I'm confused why you are not holding other investments as well.

moneyfoolish

I'm retired and have enough money to last me until I pop off without investing it in the stock market! My wife and I can live comfortably on our pensions without using our savings for anything other than emergencies. I'm talking about putting in £5k out of savings of £210k. I will never add anything to it and it is merely to give me a bit of interest. There is little point in putting £5k into something that might increase by 10% because it would make little difference to my overall position. I'm not worried if I lose the 5k but I have no interest in losing any of the rest!

gadgetmind

Both Emerging Markets and Commodities (and miners) are both pretty bombed out and I'm slightly increasing my exposure to both.

jamesd

For a chance at a high return or more likely losing it all you could look into buying options. Say buying options that pay nothing unless the UK's FTSE All Share Index is perhaps 20% lower one year from now than it is today. Those would have zero value at 20% and lower drops, then a large value if it fell by say 40%, increasing depending on how much greater than 20% the drop was. The maximum loss is the amount spent buying the options.

For something that might gain by 20-30% this year and would only lose perhaps 70% in a bad year you could try a UK smaller companies fund.

Biggles

Linton wrote: »

Dont invest in the wilder areas until you can do it with a relatively small % of your total wealth.

Heathcare certainly does sound like one of the wilder areas.

kidmugsy

One of the miners traded on the London Stock Exchange is essentially a punt on both Gold & Silver, and on Russia & Kazakhstan. Sounds right up your street.

pip895

If you want something that will hopefully get you off to a good start you could try a smaller companies fund. Less risky than other options mentioned and they are doing well right now. I like Unicorn SC or CF Miton SC - this has gone up 50% since July - so no shortage of excitement!


Biotech and Tec. funds are quite volatile and often have a heavy bias to the US -which doesn't look good value at the moment.