Inspired by Capitalists@Work, and because I enjoy a gamble, near the end of this year, I decided to start a small trading portfolio. As regular readers will know, I used to have Apple shares, which did very nicely for me (bought a few years ago at about $70 and sold the last of them in May for about $290—in order to buy shares in the company that I work for).
In order to achieve this, I started putting a small amount away every month, paying into my account with my broker—who happens to be A Very British Dude. Compared to some dedicated trading sites, of course, he is a little more expensive—but given how short of time I am at the moment, I prefer the personal and proactive service that he gives me.
Having looked around at the markets that I thought might perform well, I thought that energy companies were the best bet at present—especially given this lunatic government's current Green obsession, and the severe danger of energy shortages in this country.
However, given the relatively paltry amounts that I was able to put in, I decided to look at the "juniors"—small exploration companies with shares priced, more or less, in pennies rather than pounds. After all, if a share priced at 4p moves up by 1p, then you're 25% up (ignoring fees).
I looked at various energy companies—including Ithaca, Chariot, ITM Power and XTract Energy.
But, at the very end of September, I eventually purchased Ascent Resources at 4.35p per share. Then, at the beginning of December, I purchased Xcite Energy at 258.9p per share. So, how have they done?
So, all in all, not a bad start to this little experiment. In 2011, I intend to strengthen my holdings in both Ascent and Xcite—as well as setting stop-loss positions for both—and start looking at other energy companies too. Having recently had a decent pay rise, I am also doubling (at least) my payments into the trading fund.
My plan is to use these small companies to build up some capital, which I shall then shift into "safer", dividend-paying shares: I shall then continue to plough more money into the smaller companies to build up more capital, and so on and so on.
So, let us see what the New Year brings...