Part One: How I made 497000 profit
If you haven’t read the first three chapters of this story please proceed to the very last paragraph.
This journey is about balance and risk. It was the spread from low risk Structured Products to very high risk Enterprise Investment Schemes, that gave me a profit. My timing might have been off but I was out of the market when the big falls came. Of course my returns may have been better if I had remained invested. But I chose when to accept the risk.
The balance also had major side benefits, tax- with the EIS 20% was given in tax relief and no tax paid on the profit, if the investment failed then a farther20% was granted on the total loss. So if I doubled My money on one investment and lost it all on another I would still have the 60% tax back to give an overall profit. Problem of course is you are more likely to have more losers than winners. With VCT’s the tax relief helped balance out the poor management and resulted in an overall profit.
Structured Products gave a continuous stream of profit which would be subject to capital gains tax, but some of this tax was negated by the losses in the share portfolio. I am not talking about tax scams, these are legitimate reliefs given to all of us and in my case meant that £250.000 of tax already paid or due to be paid was either put back or remained in my account This improves the capital value of my portfolio from £497,000 to £750,000.
My big error buying and selling shares was allowing myself to be persuaded that someone else had my interests at heart. I either didn’t want to, or couldn’t, do the work required to choose the right shares, so I trusted others to do it for me. The Penny Share Letter purported to have made millions for investors, it was true providing my lucky pin landed on the right shares out of the hundreds they tipped. The Investors Chronicle is much the same, hundreds of buys- lots of money lost in oil shares which appeared to be undervalued according to IC, no mention of the ones that have disappeared in a sea…
