£1,000 to invest? Here’s how I’d look to make a 1,000% return investing in shares

first_img See all posts by Andy Ross Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Image source: Getty Images. “This Stock Could Be Like Buying Amazon in 1997” Andy Ross | Wednesday, 13th January, 2021 £1,000 to invest? Here’s how I’d look to make a 1,000% return investing in shares Our 6 ‘Best Buys Now’ Shares Simply click below to discover how you can take advantage of this.center_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Andy Ross owns no share mentioned. The Motley Fool UK has recommended Motorpoint. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Enter Your Email Address To turn a modest sum of money like £1,000 into £10,000 from investing in shares, you need to be a good investor. It’s possible to achieve a 1,000% return if you’re prepared to wait a very long time with an ETF or a portfolio of dividend-paying shares.However, to increase the odds of ten-bagging, then the smaller end of the market is probably the place to look. That’s because, as many growth investors point out, elephants don’t gallop.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…The benefits of smaller sharesWhen I talk about smaller shares I’m not talking penny stocks — those are a whole other ball game and come with big risks. If you suffer a 50% loss on an investment you need to make 100% to just breakeven. You can check out the maths yourself if you don’t believe me. It gets worse as your losses increase. This is why I avoid penny stocks and instead am looking to invest for the long term. This is about investing in high-quality stocks that happen to have low market capitalisations. Probably because they are small, growing businesses, or they have been previously mismanaged.The benefits of smaller-cap shares are numerous, but among the most important is greater inefficiency in the market. Because, institutional investors do less research on smaller-cap companies, there are more opportunities to buy undervalued shares. On top of that, small caps find it easier to double in size. It’s easier to grow from being worth £50m to £100m, for example, than it is to go from £10bn to £20bn.Thirdly, smaller companies can generally be more agile, less bureaucratic, and in many cases will have founders retaining significant shareholdings. This often makes them more entrepreneurial.Investing in shares: making returns from smaller-cap companies Bearing in mind all these advantages, I’d check for profitable companies on AIM as a starting point. Many of these companies are actually very high quality. The trick though is to find ones that are undervalued. One way is to find those with low price-to-earnings ratios and low price/earnings-to-growth ratios, favoured by growth investors like Jim Slater. In many ways the later is more important as the former might screen out too many high quality companies.Car seller Motorpoint is an example of a share that I think has the potential to rapidly grow. It has a PEG of around 0.4 and earns a respectable return on capital employed of 16%. Its industry has faced some problems, but its fundamentals seem strong.With a market cap just over £250m, it’s certainly not a behemoth. It’s a ship that can be turned around. When lockdowns end, I expect it could be well placed to pick up from pent-up consumer demand, which will drive sales.So, at the end of the day, growth investing isn’t without its challenges. However, I believe trying to find undervalued growth shares is the way to go for me.last_img read more