High(er) risk investment options?

[tapandunwrap]

Found myself young, no dependents and an investment portfolio that I guess is extremely low risk.

somewhere in the region of

50% Cash
20% S&S (about 40% of which is in individual stocks and AIM and other 'what's your big gamble' type stocks, rest in funds)
30% Pension funds
0.5% Cryptocurrency

I don't own property, but will in the near future, so will use half the cash there, leaving somewhere close to 25% across each of brick & mortar, cash, shares & pension.

I don't have any exposure to any instruments that could make a significant impact on my quality of life if they were to perform well, yet wouldn't be too worried if there was 0 return. What options are there for high risk strategies and what % of your portfolios do you apply to those?

Seed funding? Early stage investment? Peer to peer lending? More AIM? Something I'm missing?

Keen to know what the rest of the PH masses do to diversify?

Edited by tapandunwrap on Saturday 3rd April 23:12

[Mr Pointy]

You don't mention ISAs. Alongside pensions they can be a terrific investment as all gains & income is tax free.

BTL is the other one but you might have missed the boat.

[tapandunwrap]

Thanks - should clarify - the cash that isn't earmarked for property and the S&S are almost entirely in ISA but at 0.4% p/a i'm not really scratching my risk itch there.

[BobToc]

Higher risk options include:
- Reducing diversification by investing in single stock names or concentrated ETFs (you'll have heard the argument that it's really very hard to out-perform the broader market)
- Private equity, which you can access through Moonfare (making an already expensive option even more expensive by layering on another 50bps of charges)
- Investing on margin in either single stocks or ETFs (IBKR or whatever will let you do this)
- Seed and angel investing (never been convinced risk adjusted returns make sense here)

Cash sitting in an ISA is a desperate waste.

[leef44]

It's a good time to ask the question.

I would stick it in global equity ETFs while the markets have dropped about 10% in the last week or so.

[xeny]

tapandunwrap said:

leaving somewhere close to 25% across each of brick & mortar, cash, shares & pension.

I'd reduce the 25% in cash rather than explicitly look for higher risk equities. Feels likely to have a better risk/reward ratio.

[bitchstewie]

How much money can you tolerate losing albeit temporarily and for how long?

Zero return isn't the same as 40% down.

[Mezger]

Wilmslowboy said:

My experience of investing for near 20 years in ‘start ups/ unlisted shares’ and the like. I’ve probably only just broken even (taking a realistic view on the paper values of what I hold today, as well as the opportunity cost of what I could have got elsewhere).

On half I pretty much lost everything (more like 50% after SEIS /EIS).
With one I quadrupled my investment in 3 years.
Broke even on another (after a year investment I cashed out), it subsequently went bust 6 months later.

Currently hold 2 which are probably up 500% (avg 2 years of hold)
One of which is now rock solid and pays out about 60% dividend (on my original investment, net of SEIS), the other my stake could be worth a 100 times my original investment at the end this year or zero (literally a toss of a coin).

One of my investments went from £30k to £300k in 2 years and by the end of the 3rd year it had gone into administration (to be snapped up the day after by a very well known blue chip retailer).


In summary it can be exciting, but get used to losing...a lot.

How have you sourced/got exposure to these types of opportunities?

[Wilmslowboy]

Mezger said:

How have you sourced/got exposure to these types of opportunities?

In the early days Angel investment networks and the like, later my personal network.
20+ years leading tech in fast growth IT companies means I'm always been tapped up for some free advice by a start up founder.

[JuanCarlosFandango]

It is PH - classic cars? Fun investment with decent risk.

[BobToc]

It ticks the risk box, that’s true.

[GliderRider]

BobToc said:

Cash sitting in an ISA is a desperate waste.

Right now I wish most of the money in my ISA was in cash. Most (of my) shares have had the trajectories of flying sheep for the last couple of weeks.

Edit: brackets & contents

Edited by GliderRider on Monday 8th March 21:54

[tapandunwrap]

JuanCarlosFandango said:

It is PH - classic cars? Fun investment with decent risk.

In which case, which 911 should I buy, and as what % of my total portfolio?

[BobToc]

GliderRider said:

Right now I wish most of the money in my ISA was in cash. Most (of my) shares have had the trajectories of flying sheep for the last couple of weeks.

Well let us all know in advance next time when shares are going to do that.

[JuanCarlosFandango]

tapandunwrap said:

In which case, which 911 should I buy, and as what % of my total portfolio?

911s aren't really my thing but an 80s turbo with a big spoiler in guards red probably wouldn't go far wrong over the long term. That's also a well trodden track though.

Cheaper buy in for 90s ones and I'm sure the last of the air cooled 993s will have a strong following.

I think the rule of thumb is the rarest and best condition example of the most iconic car you can afford and find.