Investing 100K

Zipppy

Apologies if this is wrong forum for this thread .... If one wanted to invest 100k so as to get a yearly return out of it, what's best option? One year fixed term (reinvest minus the interest each year) or buy an apartment an rent out ??? Or is there any other optipns?? Zip

Mort5000

A few points.

I don't think 100k will get you much of apartment, and with that, you'd have the hassle of dealing with never ending repairs, ripoff management agents and tenant issues.

It might be useful to understand your age and risk profile.

That'll end up answering how you would best go about investing 100K.

Zipppy

Hiya Im 40s, permanent job but just about managing and therefore seeking to use this money as a 'top up' on my income...badly needed too... Rising the capital is a big no no...and I reckon I'll only get about 3% at best on a one year fixed term somewhere (probably less 27% DIRT) I could borrow 50k, buy an dapartment and the interest on the loan would almost offset the tax due on rent..but as you say its a messy business... Have I any other options??

Buzzliteyear

Hi Zippy, an opion might be a high dividend stock. You could get from 3-6% no problem. And I've seen much higher with utility stocks State side. The risk is higher than leaving it in a bank but relatively low. It gives you an immediate icome with the possibility of a capital gain.

Thargor

I know a guy in a similar situation to the OP, doesnt really want to learn about stocks or manage a portfolio but wouldnt mind putting it in something that pays a dividend, I told him Id ask on here about BP, does anyone rate them at the minute? Their dividend has been restored and they're still a long way down from where they were before the spill.

mono627

Buzzliteyear wrote: »

Hi Zippy, an opion might be a high dividend stock. You could get from 3-6% no problem. And I've seen much higher with utility stocks State side. The risk is higher than leaving it in a bank but relatively low. It gives you an immediate icome with the possibility of a capital gain.

Tis an option alright, but I wouldn't recommend throwing your lump sum in a single stock. Try and pick a diversified portfolio of stocks so you minimize some of the risk.

If I was you I would be looking at US stocks. I'm of the opinion that there is an expected bull market in US equities.

machu

is there a website i could get the % divedened yield of blue chip companies ? thinking it might be more interesting and perhaps more rewarding than putting my few euros into a banks deposit account.

coylemj

mono627 wrote: »

If I was you I would be looking at US stocks. I'm of the opinion that there is an expected bull market in US equities.

There already is a bull market in US stocks, that's not exactly a prediction you're making, it's already happened.

The S & P 500 rose by 19.67% in 2009 and 12.78% in 2010 and in the first two months of 2011 it's already up almost 5%, that's a bull market in anyone's language.

There may be some more upside in US stocks but saying that there is an 'expected' bull market is bull.

mono627

coylemj wrote: »

There already is a bull market in US stocks, that's not exactly a prediction you're making, it's already happened.

The S & P 500 rose by 19.67% in 2009 and 12.78% in 2010 and in the first two months of 2011 it's already up almost 5%, that's a bull market in anyone's language.

There may be some more upside in US stocks but saying that there is an 'expected' bull market is bull.

Yep you're right. Poor turn of phrase on my part. I probably should have said that US equities are likely to have the best growth rates in the developed markets this year. I was trying to guide the OP to where I currently believe the best value to be. A naive investor could easily throw their whole investment into irish stocks.

coylemj

machu wrote: »

is there a website i could get the % divedened yield of blue chip companies ? thinking it might be more interesting and perhaps more rewarding than putting my few euros into a banks deposit account.

You'd be as well to buy a copy of the Financial Times to get that info all in one place for UK companies, the Irish Times publishes that data for Irish companies I think every day.

ROK ON

Zipppy wrote: »

Hiya Im 40s, permanent job but just about managing and therefore seeking to use this money as a 'top up' on my income...badly needed too... Rising the capital is a big no no...and I reckon I'll only get about 3% at best on a one year fixed term somewhere (probably less 27% DIRT) I could borrow 50k, buy an dapartment and the interest on the loan would almost offset the tax due on rent..but as you say its a messy business... Have I any other options??

Hi. If I were you I would highly recommend that you need to urgently ask yourself and answer the following qustions:
(1) How much do you need the capital,
(2) How much are you prepared to lose (drawdown), before you would cut the investment,
(3) How would you feel if you lost say 20% or indee 50% of your funds.
(4) How would you feel if you lost no principal, but inflation was to reduce the buying power of your funds.
(5) Would you feel upset if you opted for a cautious approach and then missed out on a big opportunity.
(6) How much income do you realistically hope to generate from your capital, and what are you prepared to do to get this.

Hope that this helps.

You should be aware, I think that commodities have been in a secular bull market for the best past of a decade. On the other hand, I believe that equities are in a long term bear market (secular). Secular markets are punctuated by cyclical bull markets - we are presently 2 years into a cyclical bull market. Returns over the past 100weeks are in excess of 100% - there has been a tendency in the past that this puts a break on the upside from here.

http://www.ritholtz.com/blog/2011/02/102-week-rolling-returns/
Read this link - however one caveat is, that whilst the an interpretation of the above may suggest that we are due a deep sell off, this is not a timing tool.

Now cash has been a decent investment for many Irish people in past few years, but with inflation on a rising path - this may have implications going forward (same applies to investments in many Govt bonds (PIIGS excepted).


Take your time answering the questions. Educate yourself on the implications of the answers. You can afford to lose an opportunity as you get up to speed - IMHO, you cant afford to lose capital, by simply rushing in.

WalterMitty

your not going to get much more than 3% without increased risk of losing capital. CAPM etc.

Trader1991

Thargor wrote: »

I know a guy in a similar situation to the OP, doesnt really want to learn about stocks or manage a portfolio but wouldnt mind putting it in something that pays a dividend, I told him Id ask on here about BP, does anyone rate them at the minute? Their dividend has been restored and they're still a long way down from where they were before the spill.

id defo go along with this idea..
theres plenty of low risk high dividend stocks out there, and it may suit you too since your looking to give a boast to your income.

thomasm

Do you have any debt, what rate is this debt at. If you are paying for a car loan etc at 7-8% pa by paying of this your far better off. Otherwise you could be looking to get a 5% yield of something while sitting on a debt that's costing you more to service.

displaced dub

Zipppy wrote: »

Apologies if this is wrong forum for this thread .... If one wanted to invest 100k so as to get a yearly return out of it, what's best option? One year fixed term (reinvest minus the interest each year) or buy an apartment an rent out ??? Or is there any other optipns?? Zip

i had a discussion with someone recently and they were saying its a great time to but commericial property.

in his opinion its better than apartments as you can get tennant for a lot longer and sign them into, in some cases, 25year leases.

I know a lot of guys who went down this road and comapred to the residential investors they are not in trouble with tennants and paying back the loan etc.