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osuldo

what would you do?

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hi all,have been reading this forum and listening to financial sense for quiet a while now,have come to the conclusion that this year may turn sour a bit later on.My problem is i dont have much to invest only £10000 but am willing to gamble it as i feel it will be worthless anway if i dont do something with it.so i really dont care if i lose it or not.Would appreciate some advice from the people here, havent done much investing as i was clearing student loans an that took up the last 4 years,not intrested in property as i can rent for much less than an IO morgage.what i would like to know if it possible to buy £100000 of gold or silver with a 10%deposit(bit like buying a house)not that familure with buying shares yet as it is only now i have some disosable cash after 6 months saving would really appreciate some help.I am aware the borrowed sum will have to be paid back and it is possible it will lose value but like i said i am willing to gamble it(educated gamble)on gold or silver

Thanks for all the help so far on this forum.

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To answer the question as per your subject heading, I would do neither. You said you have 10G to gamble yet you are going to take a 100G bet. Doesn't really make much sense to me unless i've misunderstood?

 

Sure you could make a heap of money if you get it right, but the downside seems too high risk to me. Can you finance margin calls?

 

The alternative would be to play gold or silver derivatives with the 100G but using options to minimise potential losses to the 10G...of course upside is also reduced by this. However extremely complex, and you would need an expert derivatives player to help...which would cost a bit.

 

Personally, i would get into the sharemarket, not necessarily resources, and trade the 10G until it hopefully is a meaningful sum. That is how I started, with a few grand in 1997, which was probably not the best time to start, but i weathered the storm and have done very well out of the sharemarket, though after making a fair bit trading, i turned investor.

 

The other method, if you really dont mind losing the 10G, is to punt it on the hottest sector at the time and hope it continues...eg try and grab some shares in uranium floats/companies, and hope the frenzy keeps going.

 

If I had to choose between silver and gold, i'd probably choose gold, ainly because it has been hit pretty hard from its highs and so downside probably limited imo.

 

BuffetJr

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christ thats a horrible reply, i wouldnt do anything buffet advised. stockmarket takes a while to get the hang of and, coming into a recessionary period its not really the best time to start out imo. if you were going to though maybe look to gold/silver small cap miners as these will provide upside if (when) the gold spot price rises. i like the look of Galantas Gold (GAL) but am biased as i hold ;-)

 

other option is spreadbetting, you could get the leverage you wanted with that, say go £5 a point at $600, then you could afford for the price to drop to $400 before youd have lost the full 10k. thats pretty unlikely imo, while if the price got to $1000 youd make 20k profit

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Guest

 

How exactly have you disagreed with what I said?

 

I was suggesting an alternative to what 'neverbefore' was asking.

 

 

You said:

 

"christ thats a horrible reply, i wouldnt do anything buffet advised. stockmarket takes a while to get the hang of and, coming into a recessionary period its not really the best time to start out "

 

so you would suggest that a 'newbie' tries to time the market.

 

BuffetJr

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well mainly i disagree about getting into the stockmarket now. i think the next couple of years will be bad for most stocks so the time isnt right to start out imo. also disagree with punting on the hottest sector and crossing your fingers that it keeps going up, if you get in early ok but often by the time most people realise its hot and pile in the big players are selling and it tops out.

 

as for timing the market, weve all got to do that newbie or experienced. i remember when i was a novice around the last crash and it wasnt the easiest time to learn the ins and outs of trading. just my two penneth tho :-)

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fair enough, but if you have money to burn and dont mind losing it, but want to maximise your gains, then the ONLY way to do that is to punt the hottest sector. sure its high risk, but if your objective is maximum gains...ie multiple baggers in a short period of time, then its the only way

 

As for getting into the stockmarket now...if poster wants to invest now...no matter what high risk investment sector you get into, you will have a hard time. Its not just the stock market that will struggle.

 

i also started at probably the worst time, but im glad i did, learnt plenty of lessons.

 

I would not wait around 2 years for a turnaround...money can be made in a soft market, though obviously a lot harder unless you specialise in the short side of derivatives.

 

BuffetJr

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