Opening account with stockbroker

displaced dub

Hi All

Looking for a bit of advice.

Myself and my wife have a high interest account with anglo thats about to mature. We reckon we will have approx €50k to come out plus maybe another €10k from a personal loan to our business to invest.

I have been looking at maybe opening an account with davys or goodbodys, does anyone think its a good idea to maybe hand over our min €50k to a broker to manage???

If not what in your opinion is the best option? The sharks will smell the blood when we make calls so want to have at least some solid advice before we start calling.

Thanks and Regards
The Displaced Dub(now living in kildare)

pirelli

displaced dub wrote: »

Hi All

Looking for a bit of advice.

Myself and my wife have a high interest account with anglo thats about to mature. We reckon we will have approx €50k to come out plus maybe another €10k from a personal loan to our business to invest.

I have been looking at maybe opening an account with davys or goodbodys, does anyone think its a good idea to maybe hand over our min €50k to a broker to manage???

If not what in your opinion is the best option? The sharks will smell the blood when we make calls so want to have at least some solid advice before we start calling.

Thanks and Regards
The Displaced Dub(now living in kildare)

Well, you should open an account when the time is right and invest the money yourself. Open a international account and invest every week.

ixus

In short, no. No one cares more about your money than you do. If you gave a broker 50K you would lose a % in management and a % in transaction fees before you've risked their "expertise".

If you must invest in shares, I'd suggest finding out about ETF's. Look into European indices rather than Irish ones.

Keep the money on deposit and develop your own investment ideas.

Block (8

ixus wrote: »

In short, no. No one cares more about your money than you do. If you gave a broker 50K you would lose a % in management and a % in transaction fees before you've risked their "expertise".

If you must invest in shares, I'd suggest finding out about ETF's. Look into European indices rather than Irish ones.

Keep the money on deposit and develop your own investment ideas.

Seeing as the op doesn't have any experience (I am presuming that is) and how some of the more "academically knowledgeable" posters in this forum always on about the lack of knowledge in general here, wouldn't it be safer to give to a broker in this instance?

It really takes a lot of time, experience, reading and luck to become anywhere near to safely investing ones own hard earned money.

pirelli

Block (8 wrote: »

Seeing as the op doesn't have any experience (I am presuming that is) and how some of the more "academically knowledgeable" posters in this forum always on about the lack of knowledge in general here, wouldn't it be safer to give to a broker in this instance?

It really takes a lot of time, experience, reading and luck to become anywhere near to safely investing ones own hard earned money.

It doesn't take that long. If its worth 7,000 ( @ 14% based on motley fools basic annual return from equities ) a year to learn the rope then it is worth it.
Pick up a copy of motley fools book and have a long read and you will become interest in equities.

MrMatisse

dont hand it over! they will shive it into whatever pays the highest commisson TO THEM!

Idu

Depends on your risk and time parameters to be honest.

There was a five year bond thing in the Irish Times yesterday that offered 100% security on your investment across what was in essence an ETF of the FTSE, Eurostoxx, S&P and the Nikkei.

I thought it was interesting enough as a low risk investment vehicle but the only problem I had with it was the July cut off date. I'd rather keep my money out of equities for the next three months anyway as I dont see the upside but as I say it was pretty risk free and 5 years is a solid amount of time for a decent return on a broad equities recovery

ixus

Block (8 wrote: »

Seeing as the op doesn't have any experience (I am presuming that is) and how some of the more "academically knowledgeable" posters in this forum always on about the lack of knowledge in general here, wouldn't it be safer to give to a broker in this instance?

It really takes a lot of time, experience, reading and luck to become anywhere near to safely investing ones own hard earned money.

I'm 50/50 with you Block. I don't believe that retail investors(read small time) should hold any stock at all. They should hold index trackers, the one Idu mentioned sounds promising in terms of limited risk though, I do know people who have bought thee things and only received the 100%, no return after the last 5 years.**

So, if an investor decides to go alone, they should look at ETF's or products that track soft/hard commodities, bonds, equities etc. This reduces the risk of picking individual shares/bonds/commodities. You may not get the % growth of the outperformer but you will get the growth of the overall market.

Come to think of it, holding index trackers is probably a better thing psychologically speaking. There'd be less of this holding onto crap shares, maybe you'd eliminate loss aversion, as the investor could see the bigger picture.

**my understanding of these products are:
You have 100K to invest
90K goes into a zero coupon bond (or similar) returning 100K in 5 years.
5K goes as fees
5K goes into emerging/commodity markets or wherever.
If that's the case, wouldn't you be better off investing the 5K yourself and holding 95K on depposit for 5 years?

displaced dub

Hi

thanks for all the advice so far it's appreciated and most
of it is helpful.

Thing is it's hard to decide what to do. When it comes to
my business I can make decisions in a heart beat but for
some reason this scares the living **** out of me.

As someone who generaly doesn't have much time to read
books particulary of topics of this nature I'm still
wondering if the broker option is best for us or some other
type of "investment vechile" might suit.

Please keep the replys coming and once again thanks for taking
the time to read and reply to my question.

ixus

Maybe you should look at it from a different point of view. It would appear that you have a sum of money you feel you have to do something with.

You need to decide what your short,medium and long term goals are.
Do/could you need access to all/part of the sum you have at short notice?
How much are you willing to risk; 0% 10% 50% 100%?

Do you have much outstanding debt you could pay down? Credit cards?
A mortgage you could reduce? Do the maths behind the interest you are paying now versus what you would pay if you took a lump sum out of it.

Take your time with this, it deserves as much thought as your business. It could be a year or two's salary.

An additional site that may be worth browsing is www.askaboutmoney.com I used to go there a fair bit, but not so much in the last few years when they made an ass of the property discussions.

Raskolnikov

Handing money over to a broker is a sure-fire way to the poor house alright. You only need to look at how well Irish brokers have managed our pension (they're the worst performing in the world!) to see just how clued-in they are!

ixus wrote: »

I don't believe that retail investors(read small time) should hold any stock at all.

How small is small time?

When people come on here talking about wanting to spend €2,000 on shares, that certainly is pointless with the high costs. However, if you have €50k though, and are comfortable with leaving your investment for 5 years, I don't see any problem with going for shares.

As a caveat though, if you don't have the time/will/effort to research shares properly, then a low-cost index is almost certainly the way to go.