100k to invest

john1963 · 22-06-2015 10:37pm #1

I would be happy with a net return of over 2% any suggestions
Thanks

DarkoT · 22-06-2015 10:38pm

john1963 wrote: »

I would be happy with a net return of over 2% any suggestions
Thanks

2% yearly or monthly? I'll follow this thread I'm interested too...

Nody · 23-06-2015 8:52am

Standard questions, over what time period? Do you need access to the money quickly or can you lock them away for 5/10 years? How open are you to take risks? What's your financial understanding of CTFs, shares and other three letter acronyms?

For example this account offers 3.02% with 5 year lock in but with the risk of currency fluctuations. Rabo Bank in Ireland offers 1.7% with 90 days notice for withdraw. German Novo Banco offers 2% with 12 month lock in or the Permanent TSB 5 year deposit account for 6.15% and they are all very safe and protected.

daheff · 23-06-2015 9:11am

Nody wrote: »

Permanent TSB 5 year deposit account for 6.15%

This account wouldnt meet the criteria of 2%+ return outlined by the op

Nody · 23-06-2015 9:22am

daheff wrote: »

This account wouldnt meet the criteria of 2%+ return outlined by the op

OP said he would be happy with 2% return; that does not mean 2% return is required only preferable and the accounts listed above were some examples of what can be done in today's bank market. No bank account would ever make me happy personally but as I'm not OP and I don't know the acceptable risk factors, OP's financial knowledge and requirements for access is (hence the questions asked) the only point to start is at the most secure point which is some form of savings account covered by the state guarantee.

Blue Steel · 23-06-2015 9:23am

john1963 wrote: »

I would be happy with a net return of over 2% any suggestions
Thanks

Good luck in finding a 2% rate. Besides, you have to account for a 41% tax on interests for deposits in the state:

100k @ 2% interest will yield 100 euros per month after tax.

GuitarMusic · 23-06-2015 9:28am

An Post Bonds for the long term.

john1963 · 23-06-2015 9:47am

I would like a net return of 2 %. I suppose don't want to take any huge risks. I can lock the money for 5 years if necessary
thanks

Fizman · 23-06-2015 1:09pm

Again, this isn't 2 % net pa, but maybe the 5 1/2 year savings bond is worth looking at for you? http://www.statesavings.ie/products/Pages/SavingsCertificates.aspx

Key features:

7% return after 5 ½ years (AER 1.24%)

5 ½ year term

Fixed rate of return

Tax Free to Irish Residents

No fees, charges or commission

Min purchase €50

Maximum purchase €120,000 per individual per issue.

yop · 23-06-2015 11:11pm

Fizman wrote: »

Again, this isn't 2 % net pa, but maybe the 5 1/2 year savings bond is worth looking at for you? http://www.statesavings.ie/products/Pages/SavingsCertificates.aspx

Key features:

7% return after 5 ½ years (AER 1.24%)

5 ½ year term

Fixed rate of return

Tax Free to Irish Residents

No fees, charges or commission

Min purchase €50

Maximum purchase €120,000 per individual per issue.

That seems pretty good, we have 20k for investing and looking at 10 years, that would give us a 5k gross return!
Thats pretty decent I think

Blue Steel · 24-06-2015 7:20am

yop wrote: »

That seems pretty good, we have 20k for investing and looking at 10 years, that would give us a 5k gross return!
Thats pretty decent I think

I believe it is net return. State saving is tax free if you live in Ireland.

The 10 yrs plan is AER 2.26%. That's 4520 at maturity.

Nody · 24-06-2015 8:01am

yop wrote: »

That seems pretty good, we have 20k for investing and looking at 10 years, that would give us a 5k gross return!
Thats pretty decent I think

Actually that's quite poor I'm sorry to say. Yes you get 4.2k returned after 10 years but if we assume an average inflation of 1% for the same time as average your actual return is basically zero. With a 10 year horizon I'd definitely look at shares instead either directly or through a handful of 5* morningstar funds with risk diversity instead.

yop · 24-06-2015 8:17am

Nody wrote: »

Actually that's quite poor I'm sorry to say. Yes you get 4.2k returned after 10 years but if we assume an average inflation of 1% for the same time as average your actual return is basically zero. With a 10 year horizon I'd definitely look at shares instead either directly or through a handful of 5* morningstar funds with risk diversity instead.

Oh okay, ya I'm very green on this to be honest. I must look into it further.
Sorry OP for hijacking your thread.

Blue Steel · 24-06-2015 8:32am

Nody wrote: »

Actually that's quite poor I'm sorry to say. Yes you get 4.2k returned after 10 years but if we assume an average inflation of 1% for the same time as average your actual return is basically zero. With a 10 year horizon I'd definitely look at shares instead either directly or through a handful of 5* morningstar funds with risk diversity instead.

Isn't the 10yrs investment beating the estimated inflation of 1%? (AER 2.26%)

Your money is locked for 10 years though.

Cute Hoor · 24-06-2015 11:27am

I would be reluctant to tie my money into a 5 year (or longer) product paying the kinds of interest rates that are currently available, these interest rates are at a historic low and there is surely only one way they can go from here, increased interest rates (allied to some bit of inflation) will inevitably mean that your money will lose value imo.

I know the risk is greater but I would be inclined to invest it in blue chip stocks, across a range of sectors, solid performers that will give you a reasonably secure dividend with a reasonable expectation of capital appreciation over the 5/10 year period. Another positive with stocks is that your money can be quickly realised if you need it, compared to tying it into a particular product for a 5/10 year period.

A couple of examples, everyday companies that you know about, and I'm not recommending any of these. Coca Cola pays a dividend of 3.25% roughly, it's dividend has increased every year for the last 52 years, it's share price has increased by 60% approx over the last 5 years, over 90% in the last 10 years. Proctor & Gamble pays a dividend of 3.3% roughly, again it's dividend has increased every year for the last 58 years, it's share price has increased by 30% approx over the last 5 years, over 50% in the last 10 years. Kerry Group (everybody needs to eat) , only once in the last 28 years has it not increased it's dividend, it's share price has increased by 300% approx over the last 5 years, over 400% in the last 10 years. Even CRH, very badly impacted by the recession, has paid a dividend every year and it's share price has increased by 50% approx over the last 5 years, and is flat over the last 10 years. These are just a few, there are many many rock solid (one would hope) other companies out there. Of course I could have mentioned the banks here, investing in the Irish ones 10 years ago would not have been a clever move in hindsight, so that should be cautionary to anybody thinking of investing in stocks.

IMHO you should consider a slightly higher risk to hopefully reap significantly higher rewards than currently available with banks/An Post - however it's your money I'm talking about.

john1963 · 24-06-2015 11:52am

can anyone point me towards a particular fund..... shares that have been going up for a long time are probably at their peak or maybe not.. this is a tough one indeed
thanks

Blue Steel · 24-06-2015 12:57pm

Agreed 100%

Is there a broker that you could recommend? Having a portfolio of actions is good to spread the risk but what if the broker goes down?
The one thing I like about banks is I can go to their local branch and talk to a rep.
I'm concerned about sending 100k to a one broker over the Internet.

Do you have a couple of them to recommend? Another thread mentioned DeGiro.
I have been using Goodbody but they are very expensive and I never had to invest too much with them.

Cute Hoor wrote: »

I would be reluctant to tie my money into a 5 year (or longer) product paying the kinds of interest rates that are currently available, these interest rates are at a historic low and there is surely only one way they can go from here, increased interest rates (allied to some bit of inflation) will inevitably mean that your money will lose value imo.

I know the risk is greater but I would be inclined to invest it in blue chip stocks, across a range of sectors, solid performers that will give you a reasonably secure dividend with a reasonable expectation of capital appreciation over the 5/10 year period. Another positive with stocks is that your money can be quickly realised if you need it, compared to tying it into a particular product for a 5/10 year period.

A couple of examples, everyday companies that you know about, and I'm not recommending any of these. Coca Cola pays a dividend of 3.25% roughly, it's dividend has increased every year for the last 52 years, it's share price has increased by 60% approx over the last 5 years, over 90% in the last 10 years. Proctor & Gamble pays a dividend of 3.3% roughly, again it's dividend has increased every year for the last 58 years, it's share price has increased by 30% approx over the last 5 years, over 50% in the last 10 years. Kerry Group (everybody needs to eat) , only once in the last 28 years has it not increased it's dividend, it's share price has increased by 300% approx over the last 5 years, over 400% in the last 10 years. Even CRH, very badly impacted by the recession, has paid a dividend every year and it's share price has increased by 50% approx over the last 5 years, and is flat over the last 10 years. These are just a few, there are many many rock solid (one would hope) other companies out there. Of course I could have mentioned the banks here, investing in the Irish ones 10 years ago would not have been a clever move in hindsight, so that should be cautionary to anybody thinking of investing in stocks.

IMHO you should consider a slightly higher risk to hopefully reap significantly higher rewards than currently available with banks/An Post - however it's your money I'm talking about.

Cute Hoor · 24-06-2015 8:32pm

Blue Steel wrote: »

Agreed 100%

Is there a broker that you could recommend? Having a portfolio of actions is good to spread the risk but what if the broker goes down?
The one thing I like about banks is I can go to their local branch and talk to a rep.
I'm concerned about sending 100k to a one broker over the Internet.

Do you have a couple of them to recommend? Another thread mentioned DeGiro.
I have been using Goodbody but they are very expensive and I never had to invest too much with them.

I know nothing about DeGiro - I saw the other topic and will be interested to see how the others get on with them.

I haven't used an Irish broker since Danske departed, I have used most other Irish brokers over time and as you say found them all quite expensive (all I wanted was a reliable broker to buy and sell for me in a timely efficient manner). Just as an example of the difference in fees between the Irish brokers and Interactive Brokers (as an example) - if the OP was investing his €100k in 20 stocks (€5k each) with IB he/she would pay commission of €100 (€5 x 20), with Goodbodys (online account) the commission would be €1,250. There would be the same difference again for selling so between both you are down €2.3k, that's some difference. That's for an online account with Goodbody. As far as I can see Campbell O'Connor are the cheapest Irish broker for over-the-counter transactions, using the above example CO'C's commission would be €1,500 (same again for selling), so €3k in total. I hope those figures are accurate. There may be cheaper Irish brokers (online & offline), you need to do a bit of checking. A number of people here use Saxo I think and seem to be happy with them.

I use IB for UK & Euro (any Irish shares you need to buy will probably have a dual listing here and in London, and most of the larger companies also have ADR's), the fees are 0.1% irrespective of size, there would be no monthly charges for the OP with €100k invested, but for accounts with less than $100k (dollars) there is a monthly transaction fee of $10, any commissions charged for transactions in that month are offset against this $10 - better explained here (Monthly Activity) https://www.interactivebrokers.com/en/index.php?f=4969

I also have US accounts with TDAmeritrade (open to Irish residents I think), $9.99 per trade irrespective of size of transaction (https://www.tdameritrade.com/home.page) and TradeKing (formerly Zecco but not now available to Irish residents I think), $4.95 per transaction irrespective of size - both excellent brokers imo. Don't take my word for the US brokers though, here's a comparison site http://www.stockbrokers.com/onlinestockbrokers.html?gclid=CJz7tZqGqcYCFURM2wodsZUB6w

On your worries about the security of your money, fair worry but as far as I can see no need to worry. Here's the relevant page from the IB site, all other brokers should have similar cover https://www.interactivebrokers.com/en/?f=ibgStrength&p=acc

Hope this helps

Cute Hoor · 24-06-2015 8:50pm

john1963 wrote: »

can anyone point me towards a particular fund..... shares that have been going up for a long time are probably at their peak or maybe not.. this is a tough one indeed
thanks

Can't help you on the fund I'm afraid, although I think it is probably a good idea for you.

If we could tell when shares are at their peak we would probably all be very rich people. However an SP that is going up for a long time is more likely to be a sign of a very well run and successful business. Just taking Kerry as an example, the S{ has been steadily increasing since 2009, that's 6 years of pretty much uninterrupted increase, there would probably have been many times during that 6 years when you might have mused 'shares that have been going up for a long time are probably at their peak' but you would have been wrong on every occasion, tonight your musing might be right, no way of knowing unfortunately, tomorrow Kerry might buy Glanbia for a great price and it's SP could rocket or a virus may be discovered in it's butter causing it's SP to collapse, we'll never know.
https://www.google.co.uk/finance?q=LON%3AKYGA&ei=1AaLVfDRHtLtsgHfqZZY

Best of luck to you with your €100k, it's a nice problem to have!!!

Edit: didn't mean to have that smiley up the top and can't get rid of it

el diablo · 25-06-2015 12:57am

That smiley is extremely inappropriate!

100k to invest

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