Beginning to Invest - All questions go here please

Mango Joe

A couple of quick newbie questions please - Any advice or thoughts appreciated.

I came across a company recently trading on the Dublin and London Stock Markets? I had thought it was one or the other?

There was a massive difference in share price between each?

Can anyone please explain?

Also I was wondering how much money one would have to have available to buy stocks and actually have a chance at making a profit after all taxes etc to make the risk/entire venture worthwhile.

For example - If I had €10,000 and invested in a stock that increased in value by 50% then how much of the €15,000 total value of the stock will actually remain once brokers fees and any taxes are paid?

Finally whats the nearest equivalent an Irish Investor can easily buy into in terms of ETFs Vanguard, S&P 500 and so on? - Is there any standard advice people give around this? I'm mainly asking after reading online of people advising to just buy in and hold in a market that historically just appreciates in value over time.....

Thanks

Bob Harris

Mango Joe wrote: »

A couple of quick newbie questions please - Any advice or thoughts appreciated.

I came across a company recently trading on the Dublin and London Stock Markets? I had thought it was one or the other?

There was a massive difference in share price between each?

Can anyone please explain?

Also I was wondering how much money one would have to have available to buy stocks and actually have a chance at making a profit after all taxes etc to make the risk/entire venture worthwhile.

For example - If I had €10,000 and invested in a stock that increased in value by 50% then how much of the €15,000 total value of the stock will actually remain once brokers fees and any taxes are paid?

Finally whats the nearest equivalent an Irish Investor can easily buy into in terms of ETFs Vanguard, S&P 500 and so on? - Is there any standard advice people give around this? I'm mainly asking after reading online of people advising to just buy in and hold in a market that historically just appreciates in value over time.....

Thanks

I'm guessing exchange rates would explain it.

As for tax

5000 profit
less expenses e.g. 50
= chargeable gain 4950

4950 - 1270 (capital gains exemption) to give you the taxable gain
3680 x .33 (cgt rate) = 1214.40 you owe the revenue.

FastFullBack

Anyone have recommendations for Fintech ETF's that are in euro and can be accessed on Degiro. I've been searching but can't find anything.
If there is no fintech then maybe a good tech ETF in euro?

ShoulderChip

Hi,

I am helping my dad invest the proceeds of a house sale (~200k) which he wishes to invest to get some return over the next 20 years but also eat into.

I will probabky advise him to put a small percentage in peer lending and the rest in funds, thinking global equities, a ftse250 tracker and some in commodities etc.

I am unsure of the tax implications for investing in Ireland for a) peer lending (u think its treated as income tax), b) etfs, c) other forms of funds, investment trusts? and D) simple shares (this I can search for the capital gains etc.

Just wondering where I can find the answers critically for b and c and any pointers, thanks!

Jim2007

ShoulderChip wrote: »

Hi,

I am helping my dad invest the proceeds of a house sale (~200k) which he wishes to invest to get some return over the next 20 years but also eat into.

I will probabky advise him to put a small percentage in peer lending and the rest in funds, thinking global equities, a ftse250 tracker and some in commodities etc.

I am unsure of the tax implications for investing in Ireland for a) peer lending (u think its treated as income tax), b) etfs, c) other forms of funds, investment trusts? and D) simple shares (this I can search for the capital gains etc.

Just wondering where I can find the answers critically for b and c and any pointers, thanks!

Get proper advice, you clearly are not in a position to advice on such a sum of money, especially given the objective.

For instance Peer to Peer Lending is just sub prime lending - you are not a expert in this area and on to top of which which would you go lending your father's money to people who can't get a loan anywhere else?????

Like wise commodities are a high risk category, in which you need expertise and probably should not be considered in small portfolios such as this.

Generally speaking FTSE indexes are only occasionally used in portfolio construction because they tend not to give a good representation of the target market.

For your father's sake and your relationship with him, go get proper advice and don't do a DIY job on it based on random comments from the internet.

Nimil

Hi all,

I mostly stick to ETF's, but I'm thinking of putting a small part of my portfolio into stocks. But I'm not sure I understand all the differences in the same stock offered on different exchanges. For instance, on degiro AMD is offered in USD on nasdaq and EUR on xetra. Which would you go for and whats the difference between them, beyond a larger bid-ask spread on xetra due to smaller volume?

I'm interested in the tax particulars as well. I believe US share dividends are taxed at 15% if you fill out the W-8BEN form (and you then report 5 or 25% extra to revenue), would it be the same for the euro stock or would a german tax be applied instead?

El Tarangu

After reading a fair bit online about investing in ETFs, I recently opened a DeGiro account. I was waiting for my first transfer to appear in the account, to buy-and-hold some ETFs... and then the Americans killed that Iranian general in an airstrike this morning.

The funds have now appeared in my account - very small amount, €500 to test the water, with a view to investing €5k this year, and a few €K each year over the next few years.

Should I invest now, this minute:

Pros:

1. the markets are down, so I would get a good price
2. Any short-term volatility will even out over time, unlikely to effect the funds much over a timeline of a few decades
3. It would only be a small initial amount; any losses I might make would be insignificant in the grand scheme

Cons:

1. The volatility increases the risk of a loss, particularly for the novice investor

So, what do you think? Am leaning towards going ahead and pulling the trigger anyway; as I said, I would be sitting on fund for many years, so any short-term advantage/disadvantage would probably be negligible, particularly on such a small amount.

Thanks

shuffles03

Hi,

I’m completely new to investing and I want to start putting funds into the following:

SPHD
VYM
VXUS
VWO

Can someone recommend an app/service that would allow me to invest in the above?

I’m Irish but living in Spain.

Cheers in advance!

Jim2007

shuffles03 wrote: »

Hi,

I’m completely new to investing and I want to start putting funds into the following:

SPHD
VYM
VXUS
VWO

Can someone recommend an app/service that would allow me to invest in the above?

I’m Irish but living in Spain.

Cheers in advance!

- If you are resident in Spain, then 90% of the conversations about funds on this forum will not apply to you because under Spanish tax law it is possible to defer Capital Gains Tax indefinitely, while the boys and girls in Ireland must pay up.

- Unless you are in your 60s and indent to use it as income, investing in stock with a high dividend yield is probably not the best strategy for the long term

- Have you looked at your investment in terms of sectors and geography? At a glance you seem to have several overlaps and will pay for the privilege of investing in the same thing twice or even more.

- Unless you have well over 100 to invest, you do not need so many funds, especially since you seem to be concentrating on large caps. As simple world index, with say one other fund to skew it from a tactical point of view should be fine.

shuffles03

Cheers for the detailed response. Haven’t looked at geography yet - I was looking at it from the point of view that I’d be better off investing in funds like the above instead of trying to individually choose stocks and build a portfolio that way.

I’m 36. I was under the impression that the above funds were good (apart from the overlap though). Index funds could be better? I’m looking to invest for the long term.

So potentially, something like the VTI could be good?

What’s a good service/app to use?

Thanks again for the advice.

shuffles03

I just saw that VTI is no longer available for Europeans.

Based on that would VWRL or VWCE be good alternatives?

Megamemnon

rodge123 wrote: »

Looking to start putting about €300 a month aside for our daughter who is two. Might help her through college or with a property in 20+ years.

Unsure if we should pay it into a fund of some sort or pick and choose companies to invest in individually.
Pro and Cons of each option? What are best long term growth prospects if picking a fund? Lot of research and market watching required if going to invest individually?

Cheers

Hi there, Two posts that might answer your questions in more detail are: Investing in ETFs for your kids college years mrsmoneyhacker.com/how-to-get-the-government-to-pay-for-your-kids-college-years/ and this one on investing options in Ireland with all the pros, cons, tax rates and expected growth mrsmoneyhacker.com/investment-options-in-ireland/

PureLamb

looking for the most efficient way to buy some individual stocks (both Irish and worldwide). Is Degiro my best option? I'd be looking to invest <€5000 per year. Am I right in saying that tax does not have to be paid on gains of less than €1270? If you make a €1000 gain on 5 different stocks, how does tax work for this?

I'm also not clear how the tax witholding works with Degiro. I pay 1% stamp duty when I purchase a product. Capital gains tax is witheld and paid by Degiro. So basically any money I withdraw from Degiro has tax paid on it already. Is this correct? Is there a more tax efficient/fee efficient way of buying individual stocks? Thanks

Timmaay

The 1270e capital gains exemption doesn't apply to stocks unfortunately from what I know.

Bob Harris

The Capital gains exemption of 1270 most definitely applies to share disposals and property, land etc

The exemption of 1270 is for all of your gains. You can apply it to whichever gain you like but the total is 1270.


The Witholding tax (subject to change this year it seems) may not cover your tax liability on dividend payments.

In your tax return you get a tax credit for the amount of WHT paid and then pay tax+prsi+USC on the gross amount of the dividend like you would on any income. The tax rate depends on whether you are standard rate or higher rate.

Timmaay

Thanks for that clarification rob, I'm new to all this and thought I read something a few days ago saying the 1270e didn't apply to shares but I stand corrected. That brings me to my next question, the 1270e is largely a use it or lose it figure every year correct?, so if you have say build up a tidy capital gain of shares and want to cash out does it make sense to then try disposal of them across a number of years to maximise that allowance?

Bob Harris

Timmaay wrote: »

Thanks for that clarification rob, I'm new to all this and thought I read something a few days ago saying the 1270e didn't apply to shares but I stand corrected. That brings me to my next question, the 1270e is largely a use it or lose it figure every year correct?, so if you have say build up a tidy capital gain of shares and want to cash out does it make sense to then try disposal of them across a number of years to maximise that allowance?

Correct, use it or lose it. You can offset losses on disposal of shares to reduce the CGT liability though.

mpjg1995

Hi

I have a few questions I've no investing experience in shares. I do understand there is risk and dont put in what you cant afford to lose
I'm just wondering if I was to invest 6k in dividend paying shares would there be much of a return say I split 2k between biggest US or Irish dividend paying dividends.

Which is the best dividend paying shares to hold i.e Irish or US shares

If buying US dividend paying shares I believe I have to fill out a non US resident tax form. If I buy shares using Degiro will they ask me to fill this form before I buy the US shares.

Thank you.

mrunsure

I'm considering early retirement at age 50 in about 5 years time and have lived in the UK all my life. I've been saving in UK ISAs (Individual Savings Accounts) for the last 20 years which is how I have managed to contemplate early retirement. In retirement I plan to live off my investments.

I'm considering retiring in Ireland. I realise the ISA wrapper will not be recognised in Ireland and I will have to pay CGT on gains. As far as I can make out, the annual allowance is only €1,270 a year and the rate of taxation is 33%. In the UK the allowance is £12,000, the rate is either 10% or 20%, but if your money is in ISAs then you don't even pay that. So if I retire in the UK my investments are effectively tax free. So I have to work out if living in Ireland is worth paying the extra tax.

Am I missing anything here? Are there any other allowances or tax efficient saving schemes in Ireland?

Shedite27

I've a few questions, some of which seem to have been asked previously so following up on these

Like this poster, when a share is offered on different exchanges, is there difference in the performance, price changes etc? I realise there's difference in charges and tax implications.

Nimil wrote: »

I'm not sure I understand all the differences in the same stock offered on different exchanges. For instance, on degiro AMD is offered in USD on nasdaq and EUR on xetra. Which would you go for and whats the difference between them, beyond a larger bid-ask spread on xetra due to smaller volume?

Bob, you mention below it's a use it or lose it each year. Does it make sense each year so, even if you want to retain your position, to cash in €1250 worth of gains each year, and then rebuy that same day?

Bob Harris wrote: »

Correct, use it or lose it. You can offset losses on disposal of shares to reduce the CGT liability though.

And finally, growth/profits on shares, is that only payable when you cash them in? Is there any Assumed Disposal principle like on EFT’s?

Shedite27

Also, US ETF's, are these accessible to Irish investors through Degiro? Reading a link someone posted on here, it quotes the following

As mentioned above these are no longer available to purchase in Ireland as an individual investor due to EU legislation, these MAY be available through professional money managers but the fees would negate the benefits, you may also access if you open a US investment account with a minimum investment of 10,000$ but I have not confirmed this and am not sure about the tax complications

Taylor365

Shedite27 wrote: »

Also, US ETF's, are these accessible to Irish investors through Degiro?

No

garbanzo

No posts in here since the Covid-19 story really hit us hard. I imagine investors are hiding behind their sofas this last wee while. It’s been a fairly shocking few weeks in the stock market. Keep the faith everyone.

This too shall pass.....hopefully !

Jim2007

garbanzo wrote: »

No posts in here since the Covid-19 story really hit us hard. I imagine investors are hiding behind their sofas this last wee while. It’s been a fairly shocking few weeks in the stock market. Keep the faith everyone.

This too shall pass.....hopefully !

Very unlikely, but definitely possible for speculators. Learn the differences...

Mantis Toboggan

Flutter entertainment share price is 6550 in London but 73.29 in Dublin.

What's the correlation here?

Skelet0n

Mantis Toboggan wrote: »

Flutter entertainment share price is 6550 in London but 73.29 in Dublin.

What's the correlation here?

Sterling and euro.

London is in pence.

Technope87

Apologies if this has been asked a million times before but I’ll ask anyway.. is it worth while investing in small amounts every month or is this just a waste of time/ money?

For example I’d be keeping it simple and just buying a Share or two in a bigger company such as Microsoft/Apple or whatever at the end of the month. I would be aiming to buy them and hold them long term 15 years plus.

I see a few online trading platforms such as 500plus/ trading 212 offering no fee trades so I was curious about putting a couple hundred into some stocks at the end of the month instead of just adding to my savings/ my pension fund.

Is there hidden fees and charges that I am missing that makes this a bad choice due to the low amounts?

new2tri19

I'm trying to buy applegreen on degiro and it says market is closed . That's on Irish stock exchange in euro , I seem to be able to buy it on London stock exchange in gbp , why is irish market closed thanks

Thargor

Can previous investment losses be written off against dividend earnings the way they can with CGT on gains?

Bob24

Thargor wrote: »

Can previous investment losses be written off against dividend earnings the way they can with CGT on gains?

I don't believe so.

Dividends are an income, not the same thing as capital appreciation (if you don't want your stare to generate income and prefer capital appreciation so that you can offset it against capital losses, either go for companies which distribute small/no dividend and keep the cash meaning on average the share price tends to increase faster than dividend paying companies, or for accumulating ETFs).