€5,000 to invest

frankmcfrank

Setting up an account with goodbody.ie and going to put 5,000euro into my account. I'm thinking 2,000 into either A.i.b or Bank of Ireland. then splitting the rest between some irish and u.k penny shares. Any advice or tips for me please.

Time Magazine

First off, be familiar with the entrance, transaction and exit fees that you'll face. Then look at some of the other options (Rabo, Quinn etc) to see how they compare for what you want to do with your money.

Secondly, don't consider anything on this forum as advice. Information on this forum may of course constitute a good suggestion, but for legal reasons do not expect anything other than pub talk.

How long are you going to leave your money invested? What's your attitude to risk?

Generally speaking, "diversification" is the best policy to ensure you don't lose money. That means spreading your money over a lot of companies over a large span of the globe. That way one big hit (say if Bank of Ireland face a huge scandal next week) won't hurt you too much.

Over a reasonable number of years, the majority of investors fail to beat the market average of growth. Obviously people who don't spend their working lives at this are more susceptible to lower returns than those that do. I take it that you're fairly new to this field. That's good and fair play to you. But it might not be a bad idea, if you're going to invest in a few firms yourself, to read a little on the field. It will give you a greater understanding of what moves markets and may save you from making foolish errors.

Alternatively, instead of picking the shares yourself, you might passively invest in markets. There are many firms (e.g. Rabo and Quinn, not sure if Goodbody's do this) that allow you to invest in their portfolios. These are well diversified and pretty much guarantee a mediocre yield.

Best of luck.

5k is pretty small, so in order not to get hit with high transaction costs I would recommend* that you don't trade often and invest in mutual or tracker funds

By not trading often you reduce costs

By purchasing mutual or tracker funds you get the full benefit of diversification which you won't get with 5k alone

*but then I'm just some guy from the internet

frankmcfrank

Good stuff, my plan is to invest in aib long term untill they bounce back if at all!!!
i do not want to make many trades so im going to pick some under priced cheap(penny) shares and wait till they show me good profit no matter how long it takes. i have no real problems with risk and dont need any of this money right now so i dont mind leaving it for a year or two if need be.

Do you guys have an advice on picking penny shares or have any thoughts on how to get the best return on my €5000 investment

P.S what is Rabo?

Right... from the sounds of things maybe just chill for a bit and look into your options with a bit more detail.

Your above post does not make much sense*

Penny shares are priced as such for a reason - they are not viewed well by the market. For you to follow that strategy, you would need a very wide array of penny stocks to invest in to reduce your risk. You can't expect them to suddenly rise in value given that you have just invested in them (well at least not with just 5k). You don't have enough to capitalise on this speculative (as against an investment) strategy.

You also state how you have a two year maximum horizon - which is a short time span for low vol trading.

Re Risk. Risk is a key measure in trading, especially for short term (which you are) low volume trading. You can ignore risk if you are Warren Buffet and following a very long term strategy based on company returns and not on the share price.
You on the other hand are depending on an increased share price so risk will determine the probability of you having a capital gain at the end of your horizon.

Look into mutual funds - iUSA is a london based fund which will mirror the S&P. I am not advising investing in this particualr fund, its just the first one I could think of. Assuming the fund is well managed, you should be able to maxmise your return while minimising your risk. Ie, benefit from sucessfull diversification.

But I'd recommend you look into this with a lot more detail.

Z.


*But then again, I'm just a guy from the internet.

xebec

Deleted User wrote: »

But I'd recommend you look into this with a lot more detail.

Agreed. Are you prepared to lose all this money? Do you think you might need this money in the short/medium term future? What return are you hoping to receive for your money? Can you get that return from a product other than stocks, such as certain bank products? As z. says, consider investing in funds, as your expected return is more to do with performance than chance, and also consider seeking proper financial advice - especially if this is a significant sum of money for you.

xebec

xebec wrote: »

Agreed. Are you prepared to lose all this money? Do you think you might need this money in the short/medium term future? What return are you hoping to receive for your money? Can you get that return from a product other than stocks, such as certain bank products? As z. says, consider investing in funds, as your expected return is more to do with performance than chance, and also consider seeking proper financial advice - especially if this is a significant sum of money for you.

+1

SteadyEddie

Your about to go and blow 5k. GL.

Your better renting our a bar and having a party. A much better place than what you have planned with the money. AIB & Penny shares - i have to wonder is this a joke.

Time Magazine

No need for the attitude, SteadyEddie. We can all play nice.

If you suspect someone is trolling use the Report Post () function and we'll have a look at it.

FLOOPER

SteadyEddie wrote: »

AIB & Penny shares - i have to wonder is this a joke.

Would you not disagree that the banks now represent good value and that a punt would certainly not be seen as reckless.

A punt nonetheless but could be an astute buy especially for mid to long term and as part of a diverse portfolio; though personally I would use the banks as the foundation for my portfolio BOI. AIB and Anglo.

Is anyone in anyway qualified here to give an educated response!

Time Magazine

FLOOPER wrote: »

Is anyone in anyway qualified here to give an educated response!

*Annoying mod hat* Nobody's qualified here.

The banks are heavily reliant on the housing sector (well, d'uh) and it's hard to know what the fall out on that will be. Personally I think AIB is priced about right at the moment, but that BoI is a little below its true value. Not dead certs by any stretch of the imagination, though.

FLOOPER

FLOOPER wrote: »

A punt nonetheless but could be an astute buy

:rolleyes:

SteadyEddie

flooper: I believe there is value in banks, but only spending 5k and dividing it between AIB and penny shares is in my opinion pouring the money down the toilet. No offence to the OP but I would urge them to have a serious look at their plans.