£2,000 to invest? Here’s how I’m trying to double my money by investing in shares

Investing in share is still Jonathan Smith’s default option to try to generate high returns, but that doesn’t mean trading high-risk penny stocks!

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January is typically the time of year when people look at what they want to do with their money for the coming year. If I had £2,000 to put to work right now, investing in shares would be my preferred way to go. I could look elsewhere to property or gold, but I don’t feel either have the potential to double my investment in the time period I’m looking at. Using a time horizon of one-to-three years, buying into a few high-quality growth stocks could tick the box. But first, let me say that I’m a long-term investor and while I’m looking for shares that could double my money in the short term, I’d still want to hold them for much longer.

Doubling my money 

When you think of trying to double your money, stocks might not be the option that immediately comes to mind. Or if it does, images of unheard of small companies might pop up. I’m not into trading penny stocks, so we can remove that thought! 

History shows me that even some of the largest companies in the UK (in the FTSE 100 index), have doubled in value over a relatively short period. For example, I could have invested in Lloyds Banking Group during early 2009 and doubled my money within the next 12 months. Sticking in the finance sector, the London Stock Exchange Group share price has gained over 100% since 2019. So in just over two years, an investment would have doubled my money. 

I chose those two examples specifically, to highlight well known names that have performed better than some might have thought. Critics may say that I’ve been selective regarding the time periods chosen. In that case, I’ll run you through some other picks that are on the rise right now, showing that investing in shares currently could still offer potential growth.

Investing £2,000 in shares right now

One stock I’m keeping an eye on at the moment is Barratt Developments. The share price is up 30% in the past three months, and I think it could keep on going. It’s seen a short-term kick higher on the news that it plans to resume paying a dividend. This is actually a product of future optimism. The forward order book currently accounts for 90% of expected home completions for 2021. I’m not counting the chickens before the egg’s hatched, but this is a great sign that should support continued share price growth for the rest of this year.

I could put half the £2,000 into Barratt, leaving the other half to invest in another share. With a forecast rebound in commodity prices, I could put some funds into a company like Glencore or Anglo American. The latter stock is up over 800% over a slightly longer five-year time horizon. Mixing up some of my exposure to more volatile growth stocks can supplement a stock such as the housebuilder Barratt.

Overall, investing in shares offers me good opportunities to try to double my money. Not just any shares, but trustworthy FTSE 100 companies. Should my calls be correct, then I could look to take out £2,000 in profit and reinvest my original £2,000 to try and go again. But I’d prefer to leave my investments in place, gathering lots of chunky dividends then add another £2,000 to try to repeat the process and build up a bigger nest egg.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. 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.

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