Investment Gamble

(November 2013)

After a recent chat with a work colleague who does a bit of wheeling and dealing on the stock markets he convinced me that maybe I should invest some money in shares. As the UK is coming out of recession it would be a good time to invest. As always there is still a risk of losing your money.

Putting my vast knowledge of absolutely no idea in to a plan, I decided to take the plunge with £3,000 we can’t afford from our Mortgage loan.

I started looking at various graphs on how various companies had performed over the years. The better performing companies naturally have the higher prices so I looked into companies with cheap shares of under £0.50 hoping they will pick up over time. It seems this approach is high risk so I needed an affordable and safer way to invest. Then I came across investment funds.

An investment fund is putting money into a fund managers pot along with 1000s of other people. The fund manager is a professional stocks and shares analyst who invests the money to get a good return. Basically you pay him a yearly fee to trade in stocks and shares. This is the same as pension funds and endowment mortgages are managed. We lost a lot of value on our mortgage endowment policy through the 90’s so I’m aware of the risks. Ironically It is the compensation we got for the failed endowment mortgage that is being used to fund this investment. Will it work this time round???? We will find out in 5 years. (November 2018)

I looked at various investment funds available through UK banks and compared lots a graphs showing how the funds had performed over the years. Some where a gradual climb Granny could handle, some needed mountaineering equipment followed by a parachute, others just needed a set of ski’s. In the end I found a hiking hill. With my very limited knowledge went for a fund that I though would be profitable. Standard Life UK smaller companies. My thinking is if the UK is building up after a recession then smaller companies will gain well baring any issues with the Euro or USA defaulting again on their loan.

So with the accuracy of a blindfolded darts player who had been spun round I set up my account and opted for the chosen investment fund.

I got a starting price of £0.0423 for 701 units. As the £3000 i have borrowed will incur an interest charge I need to make more than 32% over 5 years to break even. Anything above my target of  £0.565 will pay some of the loan off.

Day 1:  I eagerly check the funds progress during my lunch break. A 3.6p loss, looks like I will be trading my hiking boots for ski’s. Thankfully by the end of the day I was up 1p on my initial price. Go Granny go!

Week 1: Yes! I made a loss, well other than the fee’s, 0.5 pence down on the initial price.

Week 2: Up 5 pence, hours of looking at graphs and data looks like it is paying off. In the grand scheme of things I have got out the Garden gate without catching my coat on the latch for the big journey ahead.

3 Months: It’s been 3 month now. The shares started off steady and quickly built up to £320 profit just after Christmas but soon after that the value dropped back to £200. Since Christmas to the middle February the price has steadily increased to £247 profit.

 

investments-hikerFebruary 2014:

Steady progress this month in the right direction building back up to the level it was just after Christmas.

 

 


 

investments-skierMarch 2014:

I have swapped my hiking boots for skies again, back down below what it was at the start of February again to £4.572. I will make it back up the hill.

 

 


 

April 2014:investment-parachute

Oh dear,I feel like I have found that big snake on the top line of the snakes and ladders board and gone all the way back to the start.

I don’t know what those city folk think they are up to but in the last few weeks I have gone from a 10% gain to 0.47% gain on my start price. 1000 2000 3000 check canopy!

 

 


 

investment-parachuteMay 2014

I think I need a another image, Roller Coaster. Through May the share prices continued to plummet. It eventually levelled out at £110 loss on my starting price, -3.67%. Then in the last week of May they started to rise to a £14 loss. Looking at the various graphs that track the funds it looks like an investment decision in February has caused the loss as the graphs start take a different route compared to the industry standard measurement.   This is now back in line but tracking below where it should be. Hopefully things will improve through June.

Start Price: £4.275 Current Price: £4.259 -0.37% Fund Profit: -£14.44

Performance Graph

Performance Graph Jan – May 2014


investment-parachuteJune 2014

No improvement in June overall, so the parachute is still a requirement. The price of the shares continued to fall to 4.19% below the start price leaving me a £125.61 loss on my “investment”.

Though for the last week there was some gains so moving in the right direction.

I looked up a few reviews of the standard life small UK investment fund and it seems that though there has been a drop in the funds performance, as some of the bigger investments such as ASOS, the online retailer, have had major losses, there is confidence that the fund will bounce back soon and was still a good fund to invest in. I’m going to have to take their word for it as I know nothing. I’m the hands of the experts!

June 1st: £4.285 + £

June 30th: £4.096 -£125.61estment article June 2014

 


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