Last July I wrote about my progress as an everso small micro investor, with just a few thousand pounds to work with, trying to make more than I would save over-paying my mortgage. Here's my end of 2017 note-to-self, as I'm nearly half way through year two of what is effectively a self-run endowment portfolio.
Due to the mention of impending c. 50% job cuts at work over the next 18 months (or less) I decided in late summer that I needed a change in strategy. I was being too cautious and making meaninglessly small amounts. I thought I better figure out how spread-betting worked.
I signed up with IG and quickly lost a small amount which I never managed to make good on. I put this down to IG being sensible. In order to protect newbies from their idiot selves (which is surely a good idea?) they would rarely let me open a position, even a small one, in most small caps, which was a bit frustrating, as that was mostly what I was interested in. So I signed up with Spreadex who seemed very happy to let me face huge losses. (Thank you.) I've never quite figured out should the share price of a position totally collapse within a very short space of time if I'd be effectively stopped out due to not being able to cover the margin, or if I'd simply find debt collectors pounding on the door, as'losses can exceed your deposit' as they do point out, somewhere, in small writing.
As anyone who spreadbets knows, compared to just buying shares, the spreads are harsh, the daily financing charge ramps up as your successful bets rise, and they rarely offer guaranteed stops with small caps. Despite these downsides you can leverage, which was terrific when I eventually piled into Plus500 (LON:PLUS) (not exactly a small cap). I think my risk exposure reached nearly £38K for a few weeks (if the price fell to zero, unlikely, I know), which for someone who had only managed to scape together £6k of capital to invest at the high point, was quite a lot. It was scary-exciting holding during the re-rating, but I eventually bailed, due to suffering the effects of premature ageing and not sleeping very well, having nightmares where the share price of Plus fell to…
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