29, too late for long term investments?

RedXIV

Hi all,

I've been reading about investing for a few years but really getting interested in it the last few months. I'm not as interested in trying to invest in individual companies to flip share prices, rather I'm more interested in the Warren Buffet approach of buying stable and leaving them mature over time. However, on many of the resources I've been reading on this, it has people starting at 20 or worst case 25.

Question now is have I missed the boat here basically at 29? Obviously I can still follow the method but the fact I'm potentially 9 years late to the party, is it a less worthwhile investment? 9 years of compounded earnings is obviously not to be under estimated

Just wondering if any one has any thoughts?

Cheers!
Red

Gandalph

You've already been investing in yourself for a couple of years by reading up on investing itself. I would personally say there is no prime age to start investing, just start once you feel prepared to do so. Of course maths is maths and every year of compounding works out better but sure who's to stop me saying that 19 is more of a beneficial age to start investing than 20 by that logic? If I had followed the rules of starting to invest by the time I turned 20 I would of got one good year in before the crash and most likely lost all my confidence in the markets, flee, never return. Investments are a mental mind game and I don't believe most have the head on their shoulders at that age to make good judgement calls. Some may disagree but that's just my opinion.

Francie Barrett

You are definitely not too late. At 29 years old, it's likely that you won't be retiring for another 40 years. That is plenty of time to make decent returns.

RedXIV

Francie Barrett wrote: »

You are definitely not too late. At 29 years old, it's likely that you won't be retiring for another 40 years. That is plenty of time to make decent returns.

It's the thoughts of not retiring for another 40 years that has me looking into all this in the first place

phantom_lord

The best time to plant a tree was 20 years ago. The second best time is now.

newacc2015

Have you maxed out your tax deductible pension allowance? I think that is where you should start, if you havent

RedXIV

newacc2015 wrote: »

Have you maxed out your tax deductible pension allowance? I think that is where you should start, if you havent

Yep, maxed it out for the under 30 upper limit of 15%. And the plan is to bump it to 20 next year when I hit the big 30

Francie Barrett

You really have two options if you are looking to invest further.

1. Passive investing. If you don't want to spend too much time or effort looking after things and are happy with results that match the average, then the passive approach is good. Basically, what you'd do is you'd drip feed a certain amount of money into low cost ETF's or funds (Europe, North America, Emerging markets). Don't time the market by buying or selling, just constantly drip feed funds. The only buying and selling you should be doing is occasional re-balancing. This approach will get you results that should correlate very closely with the market.
2. Active investing. If you think you can beat the market and prefer to take a more active role, you could look at buying individual shares. This can be a risky approach, as there are lots of companies out there that tell great stories, but very often are terrible investments. You see it very often here and in other places - people buying shares in oil/mining shares that for all intents and purposes are worthless. Since you are talking about looking to retire early, steer clear of the speculative rubbish, look for real companies with real earnings. This requires more effort, as you have to research companies and keep an eye on their financial statements. However it does offer the prospect of beating the averages.

newacc2015

Francie Barrett wrote: »

You really have two options if you are looking to invest further.


2. Active investing. If you think you can beat the market and prefer to take a more active role, you could look at buying individual shares. This can be a risky approach, as there are lots of companies out there that tell great stories, but very often are terrible investments. You see it very often here and in other places - people buying shares in oil/mining shares that for all intents and purposes are worthless. Since you are talking about looking to retire early, steer clear of the speculative rubbish, look for real companies with real earnings. This requires more effort, as you have to research companies and keep an eye on their financial statements. However it does offer the prospect of beating the averages.

No one can beat the market constantly. There is a few, but there is also the law of averages. Not even the best trader can beat the market year after year. Active investing is starting to die off in America, as Americans see that putting money in a low-fee Vanguard, beat any 'expert'.

Sonnenblumen

newacc2015 wrote: »

No one can beat the market constantly. There is a few, but there is also the law of averages. Not even the best trader can beat the market year after year. Active investing is starting to die off in America, as Americans see that putting money in a low-fee Vanguard, beat any 'expert'.

Although most would agree that beating the market all the time is fanciful but saying active investing is on the way out is rubbish. I would have the opposite view, passive fund investment is expensive for the customer, everyone else gets their cut even when, as is very often the case low returns or even negative returns! Who could support a case you lose money all the time even when the fund loses? If funds like a pension help you sleep at night then go ahead, but rest assured the fund managers etc are all enjoying a better sleep thanks to you. It is possible to make regular money by prudent selection and investing in blue chips, ie companies with real balance sheets, with real businesses, real sales, diversified markets etc etc. I agree there is a lot of crap talk in the business of money but that's how snakeoil salespeople earn a living. Don't be fooled, manage your risk and enjoy more rewards with active investment.

topper_harley2

Sonnenblumen wrote: »

Although most would agree that beating the market all the time is fanciful but saying active investing is on the way out is rubbish. I would have the opposite view, passive fund investment is expensive for the customer, everyone else gets their cut even when, as is very often the case low returns or even negative returns! Who could support a case you lose money all the time even when the fund loses? If funds like a pension help you sleep at night then go ahead, but rest assured the fund managers etc are all enjoying a better sleep thanks to you. It is possible to make regular money by prudent selection and investing in blue chips, ie companies with real balance sheets, with real businesses, real sales, diversified markets etc etc. I agree there is a lot of crap talk in the business of money but that's how snakeoil salespeople earn a living. Don't be fooled, manage your risk and enjoy more rewards with active investment.

I've read this a few and it still makes no sense. How is passive investment more expensive for the customer than active investment. Note active investment means employing a financial advisor and/or a life company, rather than just buying shares directly yourself. You seem to be mixing and matching the two.

topper_harley2

topper_harley2 wrote: »

I've read this a few and it still makes no sense. How is passive investment more expensive for the customer than active investment. Note active investment means employing a financial advisor and/or a life company, rather than just buying shares directly yourself. You seem to be mixing and matching the two.

What he means by passive is investing in funds etc, be they ETFs or otherwise. Wiki definition "Passive management (also called passive investing) is an investing strategy that tracks a market-weighted index or portfolio. The idea is to minimize investing fees and to avoid the adverse consequences of failing to correctly anticipate the future."

What he means by active investing is picking individual companies that are listed and invest in them making your own choice on what's in your portfolio.. he is not suggesting using a fund manager etc wiki definition "Active management (also called active investing) refers to a portfolio management strategy where the manager makes specific investments with the goal of outperforming an investment benchmark index"

So from my reading his passive investing view is spot on, he is taking a literal view of active investing but we all (most of us) knew what he meant.

Now I don't really know anyway any definition of active investing can be cheaper than passive investing if you invest in ETFs.

Sonnenblumen

Augeo wrote: »

What he means by passive is investing in funds etc, be they ETFs or otherwise. Wiki definition "Passive management (also called passive investing) is an investing strategy that tracks a market-weighted index or portfolio. The idea is to minimize investing fees and to avoid the adverse consequences of failing to correctly anticipate the future."

What he means by active investing is picking individual companies that are listed and invest in them making your own choice on what's in your portfolio.. he is not suggesting using a fund manager etc wiki definition "Active management (also called active investing) refers to a portfolio management strategy where the manager makes specific investments with the goal of outperforming an investment benchmark index"

So from my reading his passive investing view is spot on, he is taking a literal view of active investing but we all (most of us) knew what he meant.

Now I don't really know anyway any definition of active investing can be cheaper than passive investing if you invest in ETFs.

You're spot on with your interpretation of my post. In relation to my final point, the less intermediaries involved in one's investment activity the less costs. Active investment (for me) means minimising man fees, admin charges etc etc. Of course there are some taxes, duties and commissions to be paid, but I benefit from all upside, divis etc

newacc2015

Sonnenblumen wrote: »

You're spot on with your interpretation of my post. In relation to my final point, the less intermediaries involved in one's investment activity the less costs. Active investment (for me) means minimising man fees, admin charges etc etc. Of course there are some taxes, duties and commissions to be paid, but I benefit from all upside, divis etc

Have you ever heard of Vanguard ETFs? They were set up to make passive funds extremely affordable for the average person. Their management fees for some of them eg S&P500 is 0.05% of the fund. That is basically nothing.

There is zero benefits from active management IMO. No one has the knowledge to beat the market. There are fund managers with teams of dozens of people trying to the beat the market, except they cant. How is OP supposed to beat the market without the knowledge and resources to do so? If you dont have an extremely good understanding of finance and vast resources to research companies, the active investing you are suggesting isnt a whole lot different than gambling

You can buy ETFs on degiro for 75 cent with 0.02% commission. There is no fees or admin charges like you seem to think there is. Assuming you invest in the S&P500 ETF which is with Vanguard. On average you would expect 10% return p.a.

topper_harley2

Well IMO What Sonnenblumen is doing is not traditional active investment, as that term is generally understood to mean using a fund manager. What he is doing is picking stocks. Obviously the charges here are just broker fees.

For me, the term "active" immediately means a fund manager like Irish Life and all that comes with that.

Anyways, splitting hairs on terminology I think. Re actual managed funds, recent article in Irish times makes interesting reading: http://www.irishtimes.com/business/markets/almost-every-active-equity-fund-underperforms-survey-1.2581603

Timmaay

RedXIV wrote: »

It's the thoughts of not retiring for another 40 years that has me looking into all this in the first place

God that sounds so depressing ha, does anyone else think the concept of saving for a retirement 40 years away, when it could be questionable will you be still alive, or able to enjoy it at all utter madness ha?? Im 30 at the sec, have been putting a small amount into a pension for the last 2 years, but only for pure tax reductions to be honest, and given that I know this year for my business will be poor enough (which is just down to market conditions), I'm thinking strongly of stopping the payment for the minute. However I do have other much more shorter term forms of investment, Im lucky enough to be able to and do make the point of saving a reasonable amount, however I'd like to think during my life I'll take several mini retirements for a year or so at a time, while I'm still relatively young and active. I honestly don't think I'd enjoy a full time retirement when I'm 65 etc anyways, and if I'm healthy enough I'll definitely still be happy to work away at the next project that takes my interest then.

Bandying about average 10% returns is all well and good, s&p500 march 2000 $1500, today its $2100 or less.

People will say 2008 was a 1 in 83 year event, what was what happened in 2000?

Also ETF returns are taxed as income in Ireland, not as CGT, the risk to net reward warrants serious consideration for Irish residents imo. You could be decades waiting for the average 10% return to materialise on a single investment, for a drip built amount the return after tax could be minimal.

Sonnenblumen

topper_harley2 wrote: »

Well IMO What Sonnenblumen is doing is not traditional active investment, as that term is generally understood to mean using a fund manager. What he is doing is picking stocks. Obviously the charges here are just broker fees.

For me, the term "active" immediately means a fund manager like Irish Life and all that comes with that.

Anyways, splitting hairs on terminology I think. Re actual managed funds, recent article in Irish times makes interesting reading: http://www.irishtimes.com/business/markets/almost-every-active-equity-fund-underperforms-survey-1.2581603

Sorry for any confusion
Incidentally I've had some dealings in the past with various funds, eg you pay annual fees etc to a fund manager (eg Bank) who in turn delegate the management to a Third Party (Brokerage). Most of the time despite the marketing fluff both do little to really achieve growth for clients. I've shut down these types of investments and replaced them with my own picks. More fun, a little more time but the rewards are far greater, to the point that even taking hard knocks on individual shares, overall a well diversified basket of shares will ride out any if not all storms. On average, I aim to achieve 10-12% pa, some years this has dropped to 5% or grown 25+%. If I can do it so too can anyone else. Start with local and global blue chips and build experience. A no-brainer approach for anyone looking forward 25-40 years!

Sonnenblumen

Sonnenblumen wrote: »

....... replaced them with my own picks. ......... On average, I aim to achieve 10-12% pa, some years this has dropped to 5% or grown 25+%. .......

When did you implement this? As in pre or post the last crash?

newacc2015

Augeo wrote: »

Bandying about average 10% returns is all well and good, s&p500 march 2000 $1500, today its $2100 or less.

People will say 2008 was a 1 in 83 year event, what was what happened in 2000?

Also ETF returns are taxed as income in Ireland, not as CGT, the risk to net reward warrants serious consideration for Irish residents imo. You could be decades waiting for the average 10% return to materialise on a single investment, for a drip built amount the return after tax could be minimal.

S&P 500 10% return is based on a 50 year average. You just picked a time period right after the dot com burst to make your point( I dont think it is deceptive, as you dont seem to realise that 2000 was the year that the dot com bubble burst).

My belief that indexes are the best form of investing, is not just my opinion. It is backed up by countless academic papers and the index fund industry which is several trillion dollars in the US. A fair share of Americans hold their investments/retirement with Vanguard, which is just indexes mainly.

American domiciled ETFs are taxed with the CGT system. Irish ones arent. Just buy American ETFs. If you want to avoid income taxes. Buy a US based ETF eg Vanguard S&P 500 on the NYSE. Non-Ucitis ETFs Capital gains are taxed with the CGT system.

You can throw your money in random shares and just because the odd year due to the law of averages you do well, doesnt mean you are a smart investor. You are leaving vulnerable to idiosyncratic risk and you are not even investing in a way that you can bench mark your performance. There is no way a small investor can diversify effectively. There is no active investor in the world who is getting 10% return pa consistently. No one can beat the market.

Sonnenblumen

Augeo wrote: »

When did you implement this? As in pre or post the last crash?

2005

Sonnenblumen

newacc2015 wrote: »

S&P 500 10% return is based on a 50 year average. You just picked a time period right after the dot com burst to make your point( I dont think it is deceptive, as you dont seem to realise that 2000 was the year that the dot com bubble burst).

My belief that indexes are the best form of investing, is not just my opinion. It is backed up by countless academic papers and the index fund industry which is several trillion dollars in the US. A fair share of Americans hold their investments/retirement with Vanguard, which is just indexes mainly.

American domiciled ETFs are taxed with the CGT system. Irish ones arent. Just buy American ETFs. If you want to avoid income taxes. Buy a US based ETF eg Vanguard S&P 500 on the NYSE. Non-Ucitis ETFs Capital gains are taxed with the CGT system.

You can throw your money in random shares and just because the odd year due to the law of averages you do well, doesnt mean you are a smart investor. You are leaving vulnerable to idiosyncratic risk and you are not even investing in a way that you can bench mark your performance. There is no way a small investor can diversify effectively. There is no active investor in the world who is getting 10% return pa consistently. No one can beat the market.

You are obviously in a serious state of denial, for years now the pension industry has been crumbling and snake oil sales people desperately cling to any hope (or increasingly fear based selling). The fact is most blue chips are stable, yes there are market blips, but anyone just throwing money into an individual share or fund does so at their peril. Look at the better performing funds, look at the constituent parts, and their reliance on global bluechips. Be lame and follow the crowd, or find your own route to success. But don't be casting negativity and never say never. When we stopped listening to naysayers a long time ago, we discovered the world was not flat.

Sonnenblumen

Augeo wrote: »

Bandying about average 10% returns is all well and good, s&p500 march 2000 $1500, today its $2100 or less.

People will say 2008 was a 1 in 83 year event, what was what happened in 2000?

Also ETF returns are taxed as income in Ireland, not as CGT, the risk to net reward warrants serious consideration for Irish residents imo. You could be decades waiting for the average 10% return to materialise on a single investment, for a drip built amount the return after tax could be minimal.

Well for starters, for the last 5 years the top 20 FTSE divi paying companies are paying divis 3-5% pa, some much more 5-8%. Several have committed to continue to index link divis for at least a further 2-5 years. Most (but not all, some still slowly recovering, but recovering) have also seen annual SP Growth of 5 - 10% (and a few much more). Is it luck? Some perhaps, but I'd like to think it is spreading risk and picking wisely. Divis are subject to tax, CGT only applies after selling.

newacc2015

newacc2015 wrote: »

S&P 500 10% return is based on a 50 year average. You just picked a time period right after the dot com burst to make your point( I dont think it is deceptive, as you dont seem to realise that 2000 was the year that the dot com bubble burst).

My belief that indexes are the best form of investing, is not just my opinion. It is backed up by countless academic papers and the index fund industry which is several trillion dollars in the US. A fair share of Americans hold their investments/retirement with Vanguard, which is just indexes mainly.

American domiciled ETFs are taxed with the CGT system. Irish ones arent. Just buy American ETFs. If you want to avoid income taxes. Buy a US based ETF eg Vanguard S&P 500 on the NYSE. Non-Ucitis ETFs Capital gains are taxed with the CGT system.

You can throw your money in random shares and just because the odd year due to the law of averages you do well, doesnt mean you are a smart investor. You are leaving vulnerable to idiosyncratic risk and you are not even investing in a way that you can bench mark your performance. There is no way a small investor can diversify effectively. There is no active investor in the world who is getting 10% return pa consistently. No one can beat the market.

I agree with the principle of investing in ETFs etc, keep your speel for someone else but again the 10% per annum is a misleading statemrnt as you have clarified with the 50 year comment3, american domiciled ETFs are well and good if you want to risk the dollar/euro relationship, as well as keeping them 50 years. Regarding year 2000, rhetorical question Sherlock !

Sonnenblumen wrote: »

Well for starers, for the last 5 years the top 20 FTSE divi paying companies are paying divis 3-5% pa, some much more 5-8%. Several have committed to continue to index link divis for at least a further 2-5 years. Most (but not all, some still slowly recovering, but recovering) have also seen annual SP Growth of 5 - 10% (and a few much more). Is it luck? Some perhaps, but I'd like to think it is spreading risk and picking wisely. Divis are subject to tax, CGT only applies after selling.

I was referring to ETFs, CGT not applicable to them, income tax is

Ye would both do well to read what ye quote prior to rambling

newacc2015

Augeo wrote: »

I agree with the principle of investing in ETFs etc, keep your speel for someone else but again the 10% per annum is a misleading statemrnt as you have clarified with the 50 year comment3, american domiciled ETFs are well and good if you want to risk the dollar/euro relationship, as well as keeping them 50 years. Regarding year 2000, rhetorical question Sherlock !


I was referring to ETFs, CGT not applicable to them, income tax is

Ye would both do well to read what ye quote prior to rambling

My "speel" is based on the views of Warren Buffet, Burton Malkiel which all well-respected investors. They both argee that ETFs are the best investments for the average investor. You might think actively managing your own investments are the best thing for you. But statistically in the long run you wont beat the market (my opinion and that of countless academic papers).

My comments are not in anyway misleading. I have based on opinion on assumptions you dont agree with it. Eg I am not worrying about currency fluctuations (as American ETFs are more tax efficient, as they are taxed with the CGT system and not the income tax system which you keep ignoring), I choose long term investments which average 10% pa, which is not misleading as I never stated they were short term investments.

I wasn't aware it was a rhetorical question since you seem obvious to the fact indexes are the best investment strategy overall.

newacc2015

newacc2015 wrote: »

My "speel" is based on the views of Warren Buffet, Burton Malkiel which all well-respected investors. They both argee that ETFs are the best investments for the average investor. You might think actively managing your own investments are the best thing for you. But statistically in the long run you wont beat the market (my opinion and that of countless academic papers).

My comments are not in anyway misleading. I have based on opinion on assumptions you dont agree with it. Eg I am not worrying about currency fluctuations (as American ETFs are more tax efficient, as they are taxed with the CGT system and not the income tax system which you keep ignoring), I choose long term investments which average 10% pa, which is not misleading as I never stated they were short term investments.

I wasn't aware it was a rhetorical question since you seem obvious to the fact indexes are the best investment strategy overall.

I think you have me confused with the chap who actively manages his own portfolio I've made no mention of my own investments in here, point me to where I have if you like. You read 2 books & think you're clairvoyant

I'm a huge advocate of ETFs, your 10% yield comment was thoroughly misleading until you included the 50 year average.

RedXIV

Not to detract from the interesting argument here, I can safely say I've no interest in trying to actively follow the market and try to make money on individual companies. The only industry where my knowledge would be sufficient to have an inkling on how companies are operating would be the video game industry and the main thing I can take from that is that it's extremely volatile in that particular sector.

I'm more interested in the ETF's and as Phantom Lord said, it may be too late to have started this 10 years ago, but I can start it now and reap the benefits in a further 20,30,40 years

May not be able to live off then but it should help contribute to a retirement that is a bit more comfortable.

valoren

RedXIV wrote: »

Not to detract from the interesting argument here, I can safely say I've no interest in trying to actively follow the market and try to make money on individual companies. The only industry where my knowledge would be sufficient to have an inkling on how companies are operating would be the video game industry and the main thing I can take from that is that it's extremely volatile in that particular sector.

I'm more interested in the ETF's and as Phantom Lord said, it may be too late to have started this 10 years ago, but I can start it now and reap the benefits in a further 20,30,40 years

May not be able to live off then but it should help contribute to a retirement that is a bit more comfortable.

Reminds me of the former IBM chairman, Tom Watson's quip about the idea of a circle of competence;
"I'm no genius but I'm smart in spots. And I tend to stick around those spots"
Having a knowledge of an industry is an advantage in investing.
Thinking about individual companies and flipping share prices is just trading.
Think in terms of business and not the fluctuating share price.
Truly long term investing is becoming a part owner of the business. Through the highs and the inevitable lows.
With a long term bent you really have a huge advantage.

Ask yourself; What is my favourite gaming industry company?
Then ask questions such as; Is it fairly priced? Does it have a mountain of debt? Is it even making a profit? Does it have a competitive advantage?
Essentially it boils down to this; Do I want to be a part owner of this company?
If your answer is yes and the answers to your criteria questions are satisfactory to you then make your investment.

Sonnenblumen

Augeo wrote: »

Ye would both do well to read what ye quote prior to rambling

Is it too cold for you to go for a swim? Or are you a sailor?

newacc2015

RedXIV wrote: »

Not to detract from the interesting argument here, I can safely say I've no interest in trying to actively follow the market and try to make money on individual companies. The only industry where my knowledge would be sufficient to have an inkling on how companies are operating would be the video game industry and the main thing I can take from that is that it's extremely volatile in that particular sector.

I'm more interested in the ETF's and as Phantom Lord said, it may be too late to have started this 10 years ago, but I can start it now and reap the benefits in a further 20,30,40 years

May not be able to live off then but it should help contribute to a retirement that is a bit more comfortable.

The problem with most tech companies is that lack the means to make a profit. Only a handful of them are profitable. Amazon is only barely profitable in the last 1/2 years.

If you invested in the S&P 500 ETF 10 years ago. You would have made averaged around 7.5% per year if you held them up to now, which is quite impressive considering the financial meltdown in 2008/2009.

newacc2015

newacc2015 wrote: »

.
Do you know what an average is? I mentioned it performed 10% pa on average. If you think that 10% pa on average is misleading. I think you are failing to understand what "an average" actually is. If you are such a huge advocate of ETFs, you would know my opinion of them is basically paraphrasing..........

I do indeed know what an average is, thank you.

As I have said before, your comment below is incredibly misleading, you later clarified it by including the 10% average that you would expect was over a 50 year period. You actually said you would expect 10% per annum, you are basing future expectations on past returns.

newacc2015 wrote: »

..... On average you would expect 10% return p.a.

newacc2015

newacc2015 wrote: »

The problem with most tech companies is that lack the means to make a profit. Only a handful of them are profitable. Amazon is only barely profitable in the last 1/2 years.

If you invested in the S&P 500 ETF 10 years ago. You would have made averaged around 7.5% per year if you held them up to now, which is quite impressive considering the financial meltdown in 2008/2009.

why pick 10 years ago?

newacc2015 wrote: »

....You just picked a time period.......... to make your point.. .............

:pac:

Why did you wet yourself when I picked the year 2000?

newacc2015

newacc2015 wrote: »

.....

If you invested in the S&P 500 ETF 10 years ago. ......

If you invested in issue 1 of the 10 Year National Solidarity Bonds you'd be in line for 147% return after deductions, hindsight is great.

Prezatch

Augeo wrote: »

If you invested in issue 1 of the 10 Year National Solidarity Bonds you'd be in line for 147% return after deductions, hindsight is great.

47.5% I think...:pac:

Sonnenblumen

Augeo wrote: »

If you invested in issue 1 of the 10 Year National Solidarity Bonds you'd be in line for 147% return after deductions, hindsight is great.

I agree hindsight is great but if you invested in top ftse stocks on 1/1/16 you'd be up 35%+ (excluding average divi yields of 4.0% +. I wonder what it might be in 1/1/26?

Sonnenblumen

Sonnenblumen wrote: »

I agree hindsight is great but if you invested in top ftse stocks on 1/1/16 you'd be up 35%+ (excluding average divi yields of 4.0% +. I wonder what it might be in 1/1/26?

Getting ludicrous now, picking a 3 month window and what btw are the "top ftse stocks".

Also what would have prompted you to do so, where was the cut off to define the "top"?

If you invested 1, 2 or 3 months earlier what would the "up" be?

ridiculous picking a 3 months period in an investment discussion.

capailldubh

Hi All, and sorry if I'm butting in.
Just wondering, if a lad wanted to put some money in these North American etf's long term,
whats the most cost effective way to do that.
I have a TD Waterhouse account. Made a nice bit on O'Leary, BOI and Greencore recently and am out in cash.
Want to use my time for things other than watching stocks and shares as I am pushing on a bit.
I also have a pension property SSAP that is accumulating rent in a Rabo account and needing investment.
I understand I can take around €1250 tax free profits from trading per annum.
My thinking, invest €12,500 @ 10% growth = €1,250 tax free sum per annum.

topper_harley2

capailldubh wrote: »

Hi All, and sorry if I'm butting in.
Just wondering, if a lad wanted to put some money in these North American etf's long term,
whats the most cost effective way to do that.
I have a TD Waterhouse account. Made a nice bit on O'Leary, BOI and Greencore recently and am out in cash.
Want to use my time for things other than watching stocks and shares as I am pushing on a bit.
I also have a pension property SSAP that is accumulating rent in a Rabo account and needing investment.
I understand I can take around €1250 tax free profits from trading per annum.
My thinking, invest €12,500 @ 10% growth = €1,250 tax free sum per annum.

Have you read any of the ten or twenty threads recommending Degiro....?

Sonnenblumen

Augeo wrote: »

Getting ludicrous now, picking a 3 month window and what btw are the "top ftse stocks".

Also what would have prompted you to do so, where was the cut off to define the "top"?

If you invested 1, 2 or 3 months earlier what would the "up" be?

ridiculous picking a 3 months period in an investment discussion.

What's ludicrous about making money ie 35% after 3 months?

DYOR

capailldubh

capailldubh wrote: »

.......... if a lad wanted to put some money in these North American etf's long term............
I understand I can take around €1250 tax free profits from trading per annum.
My thinking, invest €12,500 @ 10% growth = €1,250 tax free sum per annum.

Tax is at disposal so there's a bit of a seeming contradiction in your plan perhaps.

Also I don't think it's practical to expect 10% every year from ETFs (or anything else)

Sonnenblumen

Sonnenblumen wrote: »

I agree hindsight is great but if you invested in top ftse stocks on 1/1/16 you'd be up 35%+ (excluding average divi yields of 4.0% +. I wonder what it might be in 1/1/26?

Sonnenblumen wrote: »

What's ludicrous about making money ie 35% after 3 months?

DYOR

You've retrospectively picked a date and alluded to a gross return of 35% without naming the shares in question.

It's ludicrous and also vague.

Also no one makes money until disposal.

also you mention a "average divi yields of 4.0% +" which is also horsesh1t over the 3 month period in question

Your research is retrospective horsesh1t

Are you holding these going forward or are they disposed of?

Sonnenblumen

Sonnenblumen wrote: »

.......35% after 3 months? ....

Coincidentally BOI shares have lost about that since 1st Jan.

Sonnenblumen

Augeo wrote: »

You've retrospectively picked a date and alluded to a gross return of 35% without naming the shares in question.

It's ludicrous and also vague.

Also no one makes money until disposal.

also you mention a "average divi yields of 4.0% +" which is also horsesh1t over the 3 month period in question

Your research is retrospective horsesh1t

Are you holding these going forward or are they disposed of?

You'd be doing well to mind your language. Suck it up!!

newacc2015

Augeo wrote: »

Tax is at disposal so there's a bit of a seeming contradiction in your plan perhaps.

Also I don't think it's practical to expect 10% every year from ETFs (or anything else)

Not if he buys and sell the ETF for a small fee each year,therefore exploiting the CGT exemption of €1,270 p.a. Which IMO appear what he seems to plan on doing

Certain ETFs eg S&P 500 will still give you the best return. Close to 10% pa in the medium to long term is possible looking empirical data. Which is empirical data of course. But it is still a decent indicator of future performance.

Augeo

Augeo wrote: »

Coincidentally BOI shares have lost about that since 1st Jan.

Sonnenblumen wrote: »

.......... Suck it up!!

How many did you buy at €8
Suck that up kid :cool:

newacc2015

newacc2015 wrote: »

Not if he buys and sell the ETF for a small fee each year,therefore exploiting the CGT exemption of €1,270 p.a. Which IMO appear what he seems to plan on doing

Certain ETFs eg S&P 500 will still give you the best return. Close to 10% pa in the medium to long term is possible looking empirical data. Which is empirical data of course. But it is still a decent indicator of future performance.

Imo a year isn't longterm.

You won't get 10% growth every year as you well know.

So intending to put €12/€13k into S&P 500 longterm but selling each year to "exploit" the CGT exemption of €1,270 p.a won't work at all really.

newacc2015

Augeo wrote: »

Imo a year isn't longterm.

You won't get 10% growth every year as you well know.

So intending to put €12/€13k into S&P 500 longterm but selling each year to "exploit" the CGT exemption of €1,270 p.a won't work at all really.

I dont think you are understanding what the other posters and I are saying. You put €12k in a ETF with the view of holding it for 10 years. Irish tax law allows €1,270 CGT exemption pa. So every year, you buy and sell the €10k of the ETFs. You still plan on having ETFs for 10 years. Hence why I said it is a medium to long term plan.

Say you see in March 2017, that the ETF is up 7% from April 2016 when you brought the ETF. Sell the ETF and capitalise the gain with the CGT exemption. Buy the ETF again €12k plus your return for 2016. Repeat each year for a further 9 years.

Empirical data states you could have got 10% in the long run. I am aware you might not get 10% in future. But it beat any random buying and selling of other shares.

How would this plan of buying and selling ETFs annually not work exactly?

I understand exactly all viewpoints thank you.
The plan of buying and selling is sound, availing of the max CGT allowance per annum is flawed.

newacc2015

Augeo wrote: »

I understand exactly all viewpoints thank you.
The plan of buying and selling is sound, availing of the max CGT allowance per annum is flawed.

How is it flawed? You have said it wrong twice, but have yet to clarify why it is wrong in your opinon

Sonnenblumen

Augeo wrote: »

How many did you buy at €8
Suck that up kid :cool:

I have managed to turn a net loss into a net (300%) gain and rising. Suck long and hard on that SUCKER :P

newacc2015

newacc2015 wrote: »

How is it flawed? You have said it wrong twice, but have yet to clarify why it is wrong in your opinon

Because the concept is based on the ETF increasing in value every year to attain the €1200 ish profit tax free.

As you know the S&P500 might/should/is likely to grow by 10% per annum longterm however it won't be an annual 10% or what ever % is required to attain the €1200 ish

It might even plunge in value over the next 10 years needing another few years to get back to where it was, again, as you well know..... see year 2000, 2008 etc for recent examples.

It's performed well in the last 6/8 years but you'd be glum enough to expect that to continue over the next 10.