£20,000 to invest

[andersonx]

Hey.

I'm pretty annoyed - I was on holiday when Citigroup stock hit $1 dolllar a share. All my friends bought in at $1, then watched it hit $4 in about 2 weeks. They made probably about $200,000+ in those 2 weeks. I could have made $120,000.

By the time I came back, it was too late. I've got £20k to invest, and I think the 3% return I can get in a savings account is a joke.

My question is: If you had £20k to invest, what would you do with it? I'm actively researching my own ideas, I've signed up to MoneyWeek which is great for stock tips and I've registered some good domains I think I can resell for a profit.

Total cost: about £60!!! So there's still a lot more to do with the cash.

Any genuine ideas appreciated. If you have something exceptional, I'll set up a contract with you to pay you 25% of the profit.

I know there are a lot of smart, genuine people on this board so I look forward to your replies.

***However, I also realise a lot of scammers use the internet, so honestly - I'm hyper paranoid about my due diligence, so don't even bother trying to scam me! ***

[AuspiciousEight]

My answer would be dependent upon what your goals and risk tolerances are.

If your goal is to get the largest potential return on your investment, venture capital is definitely the way to go. Find someone who is intelligent and business oriented, who has good ideas but who is lacking the capital required to put them into action.

If you have a long time horizon(20+ years) and want to minimize risks, buy some stock index funds. If you have a short time horizon (1-10 years) and want to minimize risks, buy some bond index funds.

If you really have no clue what to do with your money, you can always give it to me and I'll put it to good use. [J/K]

[Kanzeon]

Originally Posted by andersonx

Hey.

***However, I also realise a lot of scammers use the internet, so honestly - I'm hyper paranoid about my due diligence, so don't even bother trying to scam me! ***

I have some friends who are trying to unload their house in Detroit. You can buy a house there for less than the cost of your average SUV. Like here:

12484 Laing Street, Detroit MI - Trulia

There is no way that Detroit real estate can do much but go up. I'm toying of the idea of buying a rental there. I'd have to resign myself to not renting it for awhile, and having maintenance costs and property management fees, which makes it a close call.

If you have connections in real estate, you can get weekly lists of foreclosed properties. I know there's a housing crisis in the UK. I don't know if you can get into anything for that sum, but real estate, if it isn't a bargain now, soon will be.

There are companies that make hard money loans to stop foreclosure. Some of them are pretty small and bring in small investors on particular deals (sometimes for duplexes and apartment buildings). I don't know if they exist in the UK, or if you can find them, but I'd look into it.

I've never had much luck picking killer stocks.

[Rebecca800]

Beware of investing in stocks right now - smart analysts forecast further decline in the markets over the next few months, starting now and potentially ending by October. We could see a further 20% drop in a number of waves. In volatile markets there is money to be made. But its very high risk - there is also a lot of money to lose.

PS AndersonX I've sent you PM about a friend's start-up looking for an angel investor

[Brutha]

There is no way that Detroit real estate can do much but go up.

The market can always go down further.

Nobody wants to live in ghost towns.

[ballhit2]

Buy a boat, figure out how to make stuff that people eat or need to have a comfortable home life, make it on the boat, make something else that people will want in a faraway place, sail the boat there, repeat.

[James81]

I'd focus less on stocks and more on mutual funds and/or bonds right now. The market is far too volatole (god, I can't spell that word lol) to be risking individual stocks unless you really know what you are doing.

[Daffy Duck]

Originally Posted by andersonx

They made probably about $200,000+ in those 2 weeks. I could have made $120,000.

Or the stock could have dropped to $0.50 and you'd be down to £10k. Who knows. Warren Buffet himself recommended that most investors should just go with an index fund. Picking individual stocks is a hard science and the people who do well often just got lucky, like gambling in Vegas.

With that said, I have a coworker and some friends who pick individual stocks, and they have been able to come out ahead a little bit so far. I've also picked some stocks and traded using virtual/fake money. I've been able to do okay as well.

Bank of America was recently low and a lot of people bought in. My friend made some money from them.

To answer your question -- If I had £20k to invest, I'd consider Vanguard's retirement lifecycle funds. Maybe set aside some to play around in the market. It all depends on your mindset. If the risk of losing your cash bothers you and keeps you up at night, then picking individual stocks is not a good idea.