Banks Shares - to buy or not

DulchieLaois

I am hoping if I can get some sound advice here on buying shares, more for long term pension investment.

I am thinking of investing €1,500, invest it in banking shares as I think the price is low at the moment, and keep it as long as possible, provided that nothing significant happens to me in the meantime.

What is the cheapest place to buy shares, without having to fork out on fees all the time.

and which stock is ideal to buy in peoples opinions or should I not waste my time at all ?

Thank you

Bizness

If you are holding the stock long term, then get the share in paper certificate form (applies to Irish and UK shares) as holding it in other forms, e.g. Crest account, nominee account incurs yearly account maintenance charges of at least €40-50 per annum. Put the cert in a safe place at home. With a paper cert, you don't have to sell via the same broker.
Purchasing the shares - it's been asked many times I think. I use Campbell O'Connor ( www.camocon.ie ) as for that type of money that you are talking about, they prob are the most competitive for paper certs (€40). Also factor in the 1% stamp duty for Irish listed shares, or 0.5% for UK stocks. Other options are Fexco, Davy, Redmayne Bentley etc, but I'm pretty sure that most of these have account fees.


Bank stocks you say? Well then pick these three: BOI (Bank of Ireland), RBS (Royal Bank of Scotland) and Lloyds, put them up on a wall, and throw a dart on them, and wherever it lands, buy that stock! An alternative bet might be Barclays.
If you want to do your patriotic duty, then BOI....
In my opinion, if for pension investment, no AIB or Permanent TSB.
http://ftalphaville.ft.com/2013/10/21/1673172/the-eejit-market-in-aib/

Most of the stock market return long term is via reinvesting dividends, unless you have picked a growth stock or you get lucky with your bank stock, then a company that pays a decent dividend that facilitates a scrip dividend (whereby you invest your dividend in more shares of the company) whilst also having good enough growth prospects is also a good investment (examples, CRH, GSK, ITV etc. but some of these have been bid up the past few years). However, in Ireland, if you are a top rate taxpayer, you still need to pay an eye watering 53 odd% tax on the dividend even if you are reinvesting it.
Food stocks also perhaps.

Atlantic Dawn

DulchieLaois wrote: »

I am thinking of investing €1,500, invest it in banking shares as I think the price is low at the moment, and keep it as long as possible, provided that nothing significant happens to me in the meantime.

At 15 cent per share AIB is currently valued at € 76 billion, this is more than it was during the peak of the boom and is an insane valuation in my opinion. Don't go buying shares purely because they are a couple of cent each, this is a crazy way to buy shares.

DulchieLaois

I have checked Campbell O'Connor ( www.camocon.ie ) and there is very or little information on their websites, are they reliable in their services ?

Thronegames

I am currently with Davy but I am told Saxo are the cheapest in Ireland but I haven't checked out their rates yet. I had ptsb AND aib but I sold. I'm holding Bof I now and will stay for a couple for years at least. But do your own research!

Bizness

Yes, Campbell's web-site is fairly out of date all right, and has been for a while. They could do with updating it! They are not an on-line broker however, and all execution (buying and selling) is via phone to them.
I deal with them regular enough and the price of the stock I want to buy/sell is quoted to me on the phone and the execution of same is done there instantly whilst on the phone as well. Their bid/sell spread are grand too from comparing with others.
For your first deal with them, you will need to have the money sent into them before you deal, for subsequent transactions, you get 2 weeks to settle.
They are regulated by the Irish Central Bank (all bona fide stockbrokers operating in Ireland will be regulated by either Irish or European financial regulatory authorities) and are part of the Investor Compensation Fund administered by the Investor Compensation Company Ltd. (The Act provides for compensation of up to ECU 20,000 or 90% of an eligible investor's net loss, whichever is the lesser). They have been on the go for a long while, since the 60’s, so I don’t think you need to worry about them being a fly by night operator.
I just think if your sum of money to be invested is about €1500 and you intend to buy just one stock with that and hold it long term (or even deal once or twice per year), then having the shares in paper cert and in your custody will work out cheaper than paying yearly account charges. Note that the paper certs only apply to Irish/UK stocks – Europe/US etc stocks have to be held electronically.