I want to Buy Shares.

Recondite49

rekhib wrote: »

What about SPDR's SPYM (large-cap) or SPYX (small-cap) emerging markets. Both can be purchased on LSE in either GBP or USD and they're capitalising.

+1

dRNk SAnTA

rekhib wrote: »

What about SPDR's SPYM (large-cap) or SPYX (small-cap) emerging markets. Both can be purchased on LSE in either GBP or USD and they're capitalising.

Great suggestions - thanks for those!

FURET

Recondite49 wrote: »

They also provide you with a trading account. I've examined their trading platform and you can buy into all the Euro denominated Vanguard funds listed on the Amsterdam Stock exchange - the ones I would keep an eye on are VUSA and VWRL (the latter representing the rest of the world's stock markets. There are no Vanguard government bond ETF's there but iShares do have them, I forget the exact Ticker symbol but can dig this out for you if you'd like.

I'm thinking of buying VWRL myself. It actually does contain American companies, so if you buy both VUSA and VWRL you're repeating. For this reason I'm probably going to buy only one stock ETF (VWRL) in euros from Amsterdam.

What I like about Keytrade is the fact they don't charge any annual maintenance fees for you to hold shares, plus their commission on trades is a very reasonable EUR 14.95 - that said I think it's best we all compare our experiences with respective brokers as there are no doubt advantages and disadvantages to each.

It'd be great if you could do a review of this broker. I'm curious about how they compare with Saxo...

Recondite49

FURET wrote: »

I'm thinking of buying VWRL myself. It actually does contain American companies, so if you buy both VUSA and VWRL you're repeating. For this reason I'm probably going to buy only one stock ETF (VWRL) in euros from Amsterdam.


It'd be great if you could do a review of this broker. I'm curious about how they compare with Saxo...

Hi Furet,

You beat me to the punch re: VWRL as I have decided to switch to VEUR - of course many US companies have European branches which will form part of the European FTSE index but it's sufficiently diverse for my addled brain.

I think you are better off with Saxo, however isn't their initial deposit requirement something in the order of ten grand isn't it? Too much for my fractured finances.

I have nothing but good things to say about Keytrade so far, will post more on the review thread, also am buying my first batch of shares with them next month.

FURET

Recondite49 wrote: »

Hi Furet,

You beat me to the punch re: VWRL as I have decided to switch to VEUR - of course many US companies have European branches which will form part of the European FTSE index but it's sufficiently diverse for my addled brain.

Fair enough. I think VWRL has a wonderful mix of businesses from Europe, the US, Australia, SE Asia, S America, the Middle East, China, Japan, and India. You can see a complete list of the companies it buys and their countries in this 2013 annual report (the 2014 report is being prepared now; and btw, the 2013 annual report for VEUR is in the same document.).

My concern is that its base currency is dollar even if you buy it in euros. It doesn't track its American equivalent (VT) exactly and Vanguard Netherlands will not give any explanation. In fact, after calling them today, they refused to comment and said to seek advice from an adviser. I will in my hat.

My other concern is that ETFs whose base currency is dollar issue dollar-denominated dividends, which will be subject to a currency conversion fee if your base brokerage account is euro.

I think you are better off with Saxo, however isn't their initial deposit requirement something in the order of ten grand isn't it? Too much for my fractured finances.

I have nothing but good things to say about Keytrade so far, will post more on the review thread, also am buying my first batch of shares with them next month.

Great, I'll quiz you about them on that thread!

Electric Boobs

Seaniemac wrote: »

Hi, I have €5,000 and I would like to buy some shares in something just to see if I could make a few bob. I have never had a share in anything and I haven`t a clue as to how to buy a share or sell one. I would like to do all of this Online and it was said to me that maybe I should look at the American or British markets. I would really appreciate some advice and direction on this.

How old would you be?

Yeah, if you're not that experienced yet, then I'd just stick to the Irish market. Something like Kerry Group, you can't go wrong with. But don't expect to make a lot out of it. Or if you want to be a little bit more bold, try Ryanair!

Electric Boobs

Seaniemac wrote: »

If you haven`t anything civil to say, don`t say anything at all.....

My mom says that to me about 5 times a day

FURET

Electric Boobs wrote: »

How old would you be?

Yeah, if you're not that experienced yet, then I'd just stick to the Irish market. Something like Kerry Group, you can't go wrong with. But don't expect to make a lot out of it. Or if you want to be a little bit more bold, try Ryanair!

At a technical level, why are you recommending these shares?

Recondite49

FURET wrote: »

At a technical level, why are you recommending these shares?

Thanks for raising this Furet, I was wondering this myself! My own company pension plan is balls deep into the Irish economy and it's making me lose sleep! :-D

FURET

Recondite49 wrote: »

Thanks for raising this Furet, I was wondering this myself! My own company pension plan is balls deep into the Irish economy and it's making me lose sleep! :-D

Well, with regard to Kerry Group and Ryanair, why does Electric Boobs feel that they are a good investment? Has s/he studied their balance sheets, PE ratios, price to book ratios? What are the earnings per share over the past five years? Is the business currently overpriced on the market or underpriced? Is he in it for the long haul or to make a quick buck?

The unwritten rule when buying stock is that you ask yourself the question: "Would I be happy to buy the entire business for this price?"

So if for example a Kerry Group share costs 1 euro and there are a total of 3 billion shares, would you be happy to pay 3 billion to own the business outright? Anyone recommending stock to someone else should be able to describe in a detailed way why they are recommending it. It shouldn't be a case of "well, I like Kerry Group's cheese and butter, they taste good and I see lots of people buying them, so they're worth a punt". Similarly, when someone says -

you can't go wrong with [Kerry Group]. But don't expect to make a lot out of it.

- clearly there is an expectation from that person that "they won't make a lot". What is the basis for that assertion? There should be a quantitative basis for stating something like that. And also, what is "a lot"?

I'm not criticizing Electric Boobs, who may well know something I don't. That's not the issue.

Basically, the OP wants to buy stocks but doesn't know anything about stocks. That's actually perfectly fine. Picking individual stocks for long-term gain is really hard. The vast majority of people who want to buy stocks for prudent long-term investment should just buy a broad low-cost ETF that tracks the market.

tommylimerick

most people in investments are motivated by fear and greed
like a coke addict the highs are high but also the lows are lows
the only thing you need is something that someone else wants more tomorrow

Recondite49

FURET wrote: »

Well, with regard to Kerry Group and Ryanair, why does Electric Boobs feel that they are a good investment? Has s/he studied their balance sheets, PE ratios, price to book ratios? What are the earnings per share over the past five years? Is the business currently overpriced on the market or underpriced? Is he in it for the long haul or to make a quick buck?

The unwritten rule when buying stock is that you ask yourself the question: "Would I be happy to buy the entire business for this price?"

So if for example a Kerry Group share costs 1 euro and there are a total of 3 billion shares, would you be happy to pay 3 billion to own the business outright? Anyone recommending stock to someone else should be able to describe in a detailed way why they are recommending it. It shouldn't be a case of "well, I like Kerry Group's cheese and butter, they taste good and I see lots of people buying them, so they're worth a punt". Similarly, when someone says -
- clearly there is an expectation from that person that "they won't make a lot". What is the basis for that assertion? There should be a quantitative basis for stating something like that. And also, what is "a lot"?

I'm not criticizing Electric Boobs, who may well know something I don't. That's not the issue.

Basically, the OP wants to buy stocks but doesn't know anything about stocks. That's actually perfectly fine. Picking individual stocks for long-term gain is really hard. The vast majority of people who want to buy stocks for prudent long-term investment should just buy a broad low-cost ETF that tracks the market.

I'm with you on this Furet, just re-reading "A Random Walk down wall street" - it's a sobering thought that you can count the number of investment managers who have been able to consistently beat the market on one hand.

There's also an element of time and effort to this. Of course we all could meet up three times a week, pore over broadsheets and examine companies' fundamentals, but since such a strategy is extremely unlikely to make us more than a broad index fund (we have already mentioned VUSA, VEUR and VWRL!), why not do this instead.

I think perhaps the drawback is that this advice cuts out the need to hire an investment professional, it's a rather boring, almost mechanical process of investing in index funds or bonds and it doesn't require much intelligence - there seems to be a need on the part of investors to be seen to be doing something clever maybe.

Speaking for myself I'm not touching anything outside index funds for the foreseeable future, best of luck to anyone though who wants to try to outguess the market.

Recondite49

tommylimerick wrote: »

most people in investments are motivated by fear and greed
like a coke addict the highs are high but also the lows are lows
the only thing you need is something that someone else wants more tomorrow

Ah, the old "greater fool" theory - it does make one wonder whether everyone who bought shares before the dot com bubble first for instance was really so naive as to think that this was a good long term investment.

No doubt there were a few cynics out there who simply bought the shares to sell them again - I suppose since every share you sell is bought by someone else, they clearly think they know something you don't.

As mentioned above, it's much less exciting to invest a small amount each month into a broad index fund and ignore the movements of the stock market. It also requires a good deal of courage as there will be years your investments will go down but as an investment strategy it's still your best chance of growing your wealth.

I'm currently doing the free MiT course in basic Financial theory. Professor Lo who delivers the lectures mentions that reading older issues of the Financial Times or Wall Street Journal is usually very instructive as if you go back say ten years, the names of the top mutual funds are different to those today - that should tell us something about people who think they can predict the directions the stock market can take !

FURET

Recondite49 wrote: »

There's also an element of time and effort to this. Of course we all could meet up three times a week, pore over broadsheets and examine companies' fundamentals, but since such a strategy is extremely unlikely to make us more than a broad index fund (we have already mentioned VUSA, VEUR and VWRL!), why not do this instead.

Yep. I must admit though that I am having teething problems with this based on determining the taxation implications (which one would have to deal with anyway when buying individual stocks) and also the currency implications of buying an ETF with euros whose base currency is US dollars.

I think perhaps the drawback is that this advice cuts out the need to hire an investment professional, it's a rather boring, almost mechanical process of investing in index funds or bonds and it doesn't require much intelligence - there seems to be a need on the part of investors to be seen to be doing something clever maybe.

.

This is true, but it suits me fine :-)
The one thing I would say, though, is that long-term ETF investing requires an extremely dispassionate mindset. John Bogle has said that ETFs can be a curse due their high liquidity: insufficiently detached investors see a downward trend, panic, sell, and crystalize the loss. ETFs require Vulcan-like levels of detachment...

robp

Recondite49 wrote: »

Ah, the old "greater fool" theory - it does make one wonder whether everyone who bought shares before the dot com bubble first for instance was really so naive as to think that this was a good long term investment.

No doubt there were a few cynics out there who simply bought the shares to sell them again - I suppose since every share you sell is bought by someone else, they clearly think they know something you don't.

As mentioned above, it's much less exciting to invest a small amount each month into a broad index fund and ignore the movements of the stock market.

I think a lot of people are attracted to ETFs but are put of by their complicated and higher taxes? Please correct if I am wrong as I am really struggling to understand ETF taxation.

FURET

robp wrote: »

I think a lot of people are attracted to ETFs but are put of by their complicated and higher taxes? Please correct if I am wrong as I am really struggling to understand ETF taxation.

Grappling with it now myself, but from the perspective of a domiciled ordinary resident but currently non-resident person trying to buy Irish domiciled ETFs!

Irish government policy towards investing and investors is barbaric.

Recondite49

FURET wrote: »

Grappling with it now myself, but from the perspective of a domiciled ordinary resident but currently non-resident person trying to buy Irish domiciled ETFs!

Irish government policy towards investing and investors is barbaric.

You said it bro, is it really an issue at this stage though given that you're buying not selling?

Forgive my naivete but surely capital gains tax only becomes an issue when you actually liquidate your shares? I'm hoping to have left the Republic before selling!

FURET

Recondite49 wrote: »

You said it bro, is it really an issue at this stage though given that you're buying not selling?

Forgive my naivete but surely capital gains tax only becomes an issue when you actually liquidate your shares? I'm hoping to have left the Republic before selling!

Yes, my understanding thus far is that capital gains are only an issue when selling. But when you do sell, ensure that you are no longer ordinarily resident.

Example:
You reside in Ireland for all of 2013, 2014, and 2015.
In January 2016 you leave Ireland.
You will in fact still be considered ordinarily resident in Ireland until January 2019 and, if you sell before January 2019, regardless of where you are, you might be eligible for capital gains tax.

And that's just capital gains tax. There is also the matter of dividend taxation! If your ETF distributes dividends, my understanding is that these are also taxable. In fact, even if the ETF automatically reinvests the dividends, they are still taxable!

In general the situation is quite opaque so I feel I have to get a professional opinion, but it seems even professionals are unclear. My own ordinary residence expires in January 2016.

I certainly wouldn't sell an ETF as an Irish citizen unless I was outside the country for 3+ years and even then I'd do my due diligence.

The taxation of dividends, in my opinion, means that investors have to be extra savvy about their choice of broker in terms of choosing the most cost effective service.

I have opened a Saxo account but luckily I have not yet deposited my funds...I am starting to think that Interactive Broker is a more cost effective option.

Recondite49

FURET wrote: »

Yes, my understanding thus far is that capital gains are only an issue when selling. But when you do sell, ensure that you are no longer ordinarily resident.

Example:
You reside in Ireland for all of 2013, 2014, and 2015.
In January 2016 you leave Ireland.
You will in fact still be considered ordinarily resident in Ireland until January 2019 and, if you sell before January 2019, regardless of where you are, you might be eligible for capital gains tax.

And that's just capital gains tax. There is also the matter of dividend taxation! If your ETF distributes dividends, my understanding is that these are also taxable. In fact, even if the ETF automatically reinvests the dividends, they are still taxable!

In general the situation is quite opaque so I feel I have to get a professional opinion, but it seems even professionals are unclear. My own ordinary residence expires in January 2016.

I certainly wouldn't sell an ETF as an Irish citizen unless I was outside the country for 3+ years and even then I'd do my due diligence.

The taxation of dividends, in my opinion, means that investors have to be extra savvy about their choice of broker in terms of choosing the most cost effective service.

I have opened a Saxo account but luckily I have not yet deposited my funds...I am starting to think that Interactive Broker is a more cost effective option.

Hi Furet,

Thank you once again for sharing your thoughts on this.

This is naturally very concerning, I know that in Ireland we're taxed 41% on any dividends generated, but if as you say we're taxed on those which are automatically reinvested then we are going to have issues when it comes to ETF's, particularly when it comes to capital gains in addition.

I'm mercifully originally from the Channel Islands, which are renowned for their lax tax laws so will simply move back there when the time comes to sell up.

While we can't condone tax evasion, given where you are currently, do you think that even if you're theoretically liable for tax there would be any way for the Revenue to come after you for it?

If, for instance, you had your shares transferred to a foreign broker in your current country and sold them there, would there be any way for them legally to get at the proceeds?

FURET

Recondite49 wrote: »

Hi Furet,

Thank you once again for sharing your thoughts on this.

This is naturally very concerning, I know that in Ireland we're taxed 41% on any dividends generated, but if as you say we're taxed on those which are automatically reinvested then we are going to have issues when it comes to ETF's, particularly when it comes to capital gains in addition.

I'm mercifully originally from the Channel Islands, which are renowned for their lax tax laws so will simply move back there when the time comes to sell up.

While we can't condone tax evasion, given where you are currently, do you think that even if you're theoretically liable for tax there would be any way for the Revenue to come after you for it?

If, for instance, you had your shares transferred to a foreign broker in your current country and sold them there, would there be any way for them legally to get at the proceeds?

Well, I'll begin my response by stating that I am in no way an authority on these matters and I am open to correction on any point I make. I am currently doing a lot of research, however.

The key to finding the answer to the dividend taxation issue is the following question, to be asked of both the ETF manager and the broker:

"When you pay me a dividend, is the dividend gross or net?"

• If they say "gross" it means dividend withholding tax has not been deducted, at which point - it seems to me - it is up to the account holder to make a declaration to Revenue.
  
• If they say "net" it means that someone has deducted the dividend tax already before distributing / reinvestment. The question for the ETF manager or broker then becomes "who did you give it to?" The answer will almost certainly be "the Irish Revenue Commissioner" or "it was withheld at source in the US (for example)".

You might then approach revenue and see if you can get anything back.

Note that I am speculating -- but the above approaches seem workable to me. Key question: "Is the dividend I receive gross or net". Everything follows from that.

The capital gains issue would be a problem for someone who has a two- or three-part portfolio and who wants to rebalance once or twice per year by selling part of the high-performer to buy more of the low-performer.

In my case, my wife is neither domiciled, nor resident, nor ordinarily resident, so she will be buying the ETFs, not me. And I will make sure to be a very, very good husband!

Recondite49

FURET wrote: »

Well, I'll begin my response by stating that I am in no way an authority on these matters and I am open to correction on any point I make. I am currently doing a lot of research, however.

The key to finding the answer to the dividend taxation issue is the following question, to be asked of both the ETF manager and the broker:

"When you pay me a dividend, is the dividend gross or net?"

• If they say "gross" it means dividend withholding tax has not been deducted, at which point - it seems to me - it is up to the account holder to make a declaration to Revenue.
• If they say "net" it means that someone has deducted the dividend tax already before distributing / reinvestment. The question for the ETF manager or broker then becomes "who did you give it to?" The answer will almost certainly be "the Irish Revenue Commissioner" or "it was withheld at source in the US (for example)".

You might then approach revenue and see if you can get anything back.

Note that I am speculating -- but the above approaches seem workable to me. Key question: "Is the dividend I receive gross or net". Everything follows from that.

The capital gains issue would be a problem for someone who has a two- or three-part portfolio and who wants to rebalance once or twice per year by selling part of the high-performer to buy more of the low-performer.

In my case, my wife is neither domiciled, nor resident, nor ordinarily resident, so she will be buying the ETFs, not me. And I will make sure to be a very, very good husband!

That sounds like an excellent idea chief. When it finally comes to time to cash out, I take it then your wife can give you the money tax free or will you simply buy your dream home / boat / insurance annuity in her name too?

I imagine what you said will be important for the Vanguard ETF's which are domiciled here in Ireland. I would imagine that the tax on dividends is deducted at source but then again Vanguard are a private company so maybe they'll just give us them gross and let us have it out with the tax man.

Electric Boobs

FURET wrote: »

Well, with regard to Kerry Group and Ryanair, why does Electric Boobs feel that they are a good investment? Has s/he studied their balance sheets, PE ratios, price to book ratios? What are the earnings per share over the past five years? Is the business currently overpriced on the market or underpriced? Is he in it for the long haul or to make a quick buck?

All I know is that I've made money on all of the following companies over the last 4 years; Ryanair, Kerry Group, Providence(2 week investment), Irish Continental, Paddy Power and Betfair. I usually end up staying in each company for about 9 months and make about 20% of a gain(~€250). I usually bank my gains too soon as without foresight, I don't have the understanding to know what the future looks like, and just feel lucky to have made a few bucks

Although I feel like I'm a good investor, I know that I'm not really, and must have been lucky. You could say that I'm now perhaps due some bad luck, but I don't know if I'll be able to resist buying more. I know what a PE ratio is, but I wouldn't have a clue where to access a company's balance sheets, or be able to understand them!!

Recondite49

Electric Boobs wrote: »

All I know is that I've made money on all of the following companies over the last 4 years; Ryanair, Kerry Group, Providence(2 week investment), Irish Continental, Paddy Power and Betfair. I usually end up staying in each company for about 9 months and make about 20% of a gain(~€250). I usually bank my gains too soon as without foresight, I don't have the understanding to know what the future looks like, and just feel lucky to have made a few bucks

Although I feel like I'm a good investor, I know that I'm not really not, and must have been lucky. I'm now perhaps due some bad luck, but I don't know if I'll be able to resist buying more. I know what a PE ratio is, but I wouldn't have a clue where to access a company's balance sheets, or be able to understand them!!

Well done on the investments you made so far!

One of the things I've enjoyed about joining Investopedia is that there is k stock market simulator so you can pit your wits against the market with only imaginary money.

I've managed to generate a modest return by following Buffet's three simple rules:

- Has the company floated for at least ten years on the stock exchange? (Excludes tech stocks like Facebook & Twitter)

- Has the company consistently made a profit for the last five?

- Could you explain to a ten year old satisfactorily how the company makes money?

Once you've satisfied those criteria, I would suggest looking at Price to Earnings ratios, Betas and quarterly earnings reports etc.

Having said this while Buffet has enjoyed extraordinary success as an Investor, in most years his fund Berkshire Hathaway only barely outperformed the market and he himself admitted that you're better off investing in an index fund.

It's important to bear in mind as well that index funds simply track a particular sector or market, so they're largely automated. This is reflected in the very low commission charged.

Mutual fund managers however all need to be paid a fat salary to select stocks on your behalf. If, worse still you decide to play the market yourself, every trade you make is 15 Euros down the swanee.

The solution? Invest a regular amount in a broad index fund tracking the market and watch your wealth grow slowly over a long period.

Then cash out and buy that house in the Caribbean. :-P

FURET

Electric Boobs wrote: »

All I know is that I've made money on all of the following companies over the last 4 years; Ryanair, Kerry Group, Providence(2 week investment), Irish Continental, Paddy Power and Betfair. I usually end up staying in each company for about 9 months and make about 20% of a gain(~€250). I usually bank my gains too soon as without foresight, I don't have the understanding to know what the future looks like, and just feel lucky to have made a few bucks

Although I feel like I'm a good investor, I know that I'm not really, and must have been lucky. You could say that I'm now perhaps due some bad luck, but I don't know if I'll be able to resist buying more. I know what a PE ratio is, but I wouldn't have a clue where to access a company's balance sheets, or be able to understand them!!

I know what you mean. The reality is that almost anyone investing in stocks since 2011 would have made handsome money between then and now.

Here is an example of how someone would assess a company (in this case, Coca-Cola).

The thing is, when people say "you won't make much", I wonder what their basis is.

• I mean, if I invest 1000 euros and hold it for 30 years, and if it grows by an average of 8% per year over that period, it would have grown to 10,062.66.
  
• If I invested 1000 euros and added 1000 to it every year for 30 years and it grew by 8% per year, I would have 132,408.52 euros.
  
• But if I invest 1000 euros and hold it for only one year and it grows 8%, I would have only 1080.

To make money, most people have to hold for a long time so that you get some good compounding. This to me is real investing - investing time and money into good businesses.

FURET

Recondite49 wrote: »

That sounds like an excellent idea chief. When it finally comes to time to cash out, I take it then your wife can give you the money tax free or will you simply buy your dream home / boat / insurance annuity in her name too?

Most probably as soon as my ordinary residence expires we will migrate the investments to a joint brokerage account and continue investing for as long as it takes.

I know this might sound a bit odd, but neither me nor my wife see the purchase of a home or "things" as important. We actually don't spend very much on things. More important for us is to build up financial independence so that we create choices for ourselves: the choice to work, or not. The choice to travel for one month per year, or six. The choice to live wherever we want. We both realize that if we buy new cars every few years, pump money into a single house, and buy expensive clothes and electronics, that we won't really have much money left over to achieve our goal of financial independence.

Be that as it may, as index investors, we are delighted to see everyone else splash out on new cars and expensive clothes and electronics! There's a vast mall near where we live which contains hundreds of shops. If we were to buy the Vanguard ETFs "VEUR" and "VTI" for example, we would own a little bit of almost every single restaurant and shop in the place, so I'd be very happy to see it thronged with shoppers day in and day out. But we generally are not shoppers ourselves. (Heck, if I bought VWRL I'd even own a little bit of the property company that built and owns the mall itself.)

I imagine what you said will be important for the Vanguard ETF's which are domiciled here in Ireland. I would imagine that the tax on dividends is deducted at source but then again Vanguard are a private company so maybe they'll just give us them gross and let us have it out with the tax man.

I'll call Vanguard Netherlands today and ask what they do with the dividends.
Update: Vanguard pay a gross dividend. The broker (in this case Saxo) pays a net. There is an intermediary between Vanguard and Saxo which Saxo calls their "custodian". The custodian is the entity that settles the dividend withholding tax. Capital gains tax is not deducted and it is the individual's responsibility to declare their capital gain when selling.

topper_harley2

Recondite49 wrote: »

The solution? Invest a regular amount in a broad index fund tracking the market and watch your wealth grow slowly over a long period.

Then cash out and buy that house in the Caribbean. :-P

How do you avoid getting killed with charges for regular investment?

FURET

topper_harley2 wrote: »

How do you avoid getting killed with charges for regular investment?

Charges are a pain!

But the first thing is to choose the broker wisely. Interactive Brokers seem to me to be the cheapest by far and you get multiple currency support by default.

The second strategy would be to minimize your trades. So, for example, invest lump sums every 2 or three months and sell only once or twice per year for rebalancing purposes.

Also, only buy from exchanges that don't charge a stamp duty or financial transaction tax.

Charges are a pain but the aim should be to minimize activity. People who buy and sell two or three times per month will pay a lot more than people who buy 6 times per year and sell once or twice per year.

Electric Boobs

Recondite49 wrote: »

If you want to learn a little more about Financial Theory in general, MIT Openware does a great free course using video lectures

That's seems to be a little hard to find. Can you pm a link please?

Recondite49

Electric Boobs wrote: »

That's seems to be a little hard to find. Can you pm a link please?

http://ocw.mit.edu/courses/sloan-school-of-management/15-401-finance-theory-i-fall-2008/

Recondite49

FURET wrote: »

Charges are a pain!

But the first thing is to choose the broker wisely. Interactive Brokers seem to me to be the cheapest by far and you get multiple currency support by default.

The second strategy would be to minimize your trades. So, for example, invest lump sums every 2 or three months and sell only once or twice per year for rebalancing purposes.

Also, only buy from exchanges that don't charge a stamp duty or financial transaction tax.

Charges are a pain but the aim should be to minimize activity. People who buy and sell two or three times per month will pay a lot more than people who buy 6 times per year and sell once or twice per year.

What he said /\

I put money into my brokerage account once a month but only execute a trade once every four (at least this is my plan as I've only been doing this for 8 months!).

I'm with Keytrade who charge just under 15 Euro a trade, so 45 Euro a year isn't too much to part with in my view.

This also ties in with the reasons why it's not easy for mutual funds to beat the market. Hundreds of trades a year cost money for both buying and selling!