15K to invest, suggestions

aido12345

Hi all,

I've 15K to invest & would like to see what options I have outside a savings account & government bonds seems quite low also.

I don't need access to this money for the foreseeable future (touch wood). I've no experience with shares etc so any help would be great.

Cheers,
A

Nody

No experience with shares, how willing are you to risk in general? Can you sit through your 15k turns into 7k if 10 years later it would turn into 30k? Do you pension save today? Are you planning on saving more over time or is this a lump sump amount? What's your saving horizon (i.e. 5 years, 10 years, 30 years?)?

aido12345

Nody wrote: »

No experience with shares, how willing are you to risk in general? Can you sit through your 15k turns into 7k if 10 years later it would turn into 30k? Do you pension save today? Are you planning on saving more over time or is this a lump sump amount? What's your saving horizon (i.e. 5 years, 10 years, 30 years?)?

Yes have a company pension & contributing to that & seems in good stead.

No children currently so no major expenses like school/uni for a while so I guess I'd be happy to leave it for 10 years+. I would think I would be able to add an extra 5k-7k each year.

I've read somewhere about tax appraisals after 7 years on shares, would this be alot of work? I've also read about indexes, should this be my starting point?

Nody

The answer to your last question is yes, Direct Index funds (i.e. no fund that has shares of other funds) are your best bet and with as low fee as possible is definitely the way to go then. The other part of this as well is that as far as possible you should look at a regular (i.e. monthly/bi monthly/quarterly) to buy for a fixed amount into said funds as well no matter if the market goes up or down (if the market goes up your shares are worth more; if the market falls you get more for your money).

One of the easier ways of doing this in Ireland is to use Degiro and either buying funds or my personal preference ETFs (Which are funds that are traded like if they are shares which simply makes them easier to sell and buy). Now there are multiple ways you can do a portfolio and I'm not going to claim to know which is the best way but from an index perspective something along these lines:

30% Vanguard FTSE All-World ex-US ETF (VEU)
30% Vanguard Total Stock Market ETF (VTI)
20% Vanguard Long-Term Government Bond ETF (VGLT)

The above three will give you a very wide index inc. small cap (faster growth than large cap but higher risk) as a base for your portfolio along with some long term bonds to reduce risk. The final 20% can be tailored to what suits your personal taste such as:
Vanguard Consumer Staples ETF (VDC)
Small-Cap ETF (VB)
FTSE Emerging Markets ETF (VWO)
FTSE All-World ex-US Small-Cap ETF (VSS)

You can then add in rebalancing the portfolio once a year in July (don't do it in December/January as everyone else does) if any part has increased beyond 10% units (i.e. if Vanguard Total Stock Market ETF has grown to 50% of the portfolio value you sell it down to 30% again and buy into the other two to bring them up to the same split again but only once a year to avoid paying to much in transaction fees; if it is at 35% you do nothing).

Note this is an example only and you need to actually think through what this means for you but the above would be about as safe and cheap as you can go with minimal knowledge and with Vanguard you get the lowest fund fees possible while investing the money per the same split over the year as you save it.

aido12345

Nody wrote: »

The answer to your last question is yes, Direct Index funds (i.e. no fund that has shares of other funds) are your best bet and with as low fee as possible is definitely the way to go then. The other part of this as well is that as far as possible you should look at a regular (i.e. monthly/bi monthly/quarterly) to buy for a fixed amount into said funds as well no matter if the market goes up or down (if the market goes up your shares are worth more; if the market falls you get more for your money).

One of the easier ways of doing this in Ireland is to use Degiro and either buying funds or my personal preference ETFs (Which are funds that are traded like if they are shares which simply makes them easier to sell and buy). Now there are multiple ways you can do a portfolio and I'm not going to claim to know which is the best way but from an index perspective something along these lines:

30% Vanguard FTSE All-World ex-US ETF (VEU)
30% Vanguard Total Stock Market ETF (VTI)
20% Vanguard Long-Term Government Bond ETF (VGLT)

The above three will give you a very wide index inc. small cap (faster growth than large cap but higher risk) as a base for your portfolio along with some long term bonds to reduce risk. The final 20% can be tailored to what suits your personal taste such as:
Vanguard Consumer Staples ETF (VDC)
Small-Cap ETF (VB)
FTSE Emerging Markets ETF (VWO)
FTSE All-World ex-US Small-Cap ETF (VSS)

You can then add in rebalancing the portfolio once a year in July (don't do it in December/January as everyone else does) if any part has increased beyond 10% units (i.e. if Vanguard Total Stock Market ETF has grown to 50% of the portfolio value you sell it down to 30% again and buy into the other two to bring them up to the same split again but only once a year to avoid paying to much in transaction fees; if it is at 35% you do nothing).

Note this is an example only and you need to actually think through what this means for you but the above would be about as safe and cheap as you can go with minimal knowledge and with Vanguard you get the lowest fund fees possible while investing the money per the same split over the year as you save it.

Thanks very much Nody. I'll start researching all the information you have given me above.

The rebalancing, how does that work regarding tax, do I have to settle CGT after a rebalance?

Nody

aido12345 wrote: »

Thanks very much Nody. I'll start researching all the information you have given me above.

The rebalancing, how does that work regarding tax, do I have to settle CGT after a rebalance?

Yes in most cases (you could have a scenario where your ETF is down and you have a loss but still rebalance due to the other ETFs have fallen further) but since you only sell a relatively small part of your portfolio (i.e. 20% in my scenario) you'd only settle the CGT for the profit on those 20%.

Corbally

Nody wrote: »

Yes in most cases (you could have a scenario where your ETF is down and you have a loss but still rebalance due to the other ETFs have fallen further) but since you only sell a relatively small part of your portfolio (i.e. 20% in my scenario) you'd only settle the CGT for the profit on those 20%.

Capital gains excemption is €1270 (double check that) so you only pay if your gains are more in one year.

newacc2015

Nody wrote: »

30% Vanguard FTSE All-World ex-US ETF (VEU)
30% Vanguard Total Stock Market ETF (VTI)
20% Vanguard Long-Term Government Bond ETF (VGLT)

The above three will give you a very wide index inc. small cap (faster growth than large cap but higher risk) as a base for your portfolio along with some long term bonds to reduce risk. The final 20% can be tailored to what suits your personal taste such as:
Vanguard Consumer Staples ETF (VDC)
Small-Cap ETF (VB)
FTSE Emerging Markets ETF (VWO)
FTSE All-World ex-US Small-Cap ETF (VSS)

Note this is an example only and you need to actually think through what this means for you but the above would be about as safe and cheap as you can go with minimal knowledge and with Vanguard you get the lowest fund fees possible while investing the money per the same split over the year as you save it.

I think these are great ETFs bar the long term bonds one. In the long term, holding short term bonds which constantly reinvest with the changing interest rates tends to always outperform long term bonds. In fact Warren Buffett believes you should only hold short term US bonds ie T-Bills. Long term US bonds have gotten hammered since Trump has been elected and will only get worse when the Fed keeps hitting their rates. Over the long term, an index fund like the S&P500 is quite low risk as it is so heavily diversified.

Something like the consumer staples ETF is a good hedge against risk itself, as investors tend to pour money into recession proof companies that would make up a consumer staple ETF eg Colgate Palm Oil

+1 on Degiro. They have 700 free ETFs and even index funds are generally only a few cents to buy on it.

OP another fund which I like and is one of the few decent actively managed funds is the New Ireland Fund (ticker: IRL:NYSE). It invests in Irish companies such as CRH, BOI, Paddypower Betfair, Hostelworld etc. It gets ignores a lot of the junk that makes up the ISEQ and the fact a lot of Irish stock prices are a bit irrational IMO. This is traded on Degiro too. It is heavily exposed to Ireland and made up with companies often heavily exposed to other economies eg it is made up of 25% CRH whose 50% of sales come of the US. So I would suggest investing a limited amount of money if you are investing heavily in US ETFs

aido12345

hanksy123 wrote: »

Capital gains excemption is €1270 (double check that) so you only pay if your gains are more in one year.

So if I have 1000 shares in AIB bought at €1 and sold at €3 in the same year. So my gain is €2000, so I only pay CGT on €730?

Cute Hoor

aido12345 wrote: »

So if I have 1000 shares in AIB bought at €1 and sold at €3 in the same year. So my gain is €2000, so I only pay CGT on €730?

Correct

topper_harley2

aido12345 wrote: »

Hi all,

I've 15K to invest & would like to see what options I have outside a savings account & government bonds seems quite low also.

I don't need access to this money for the foreseeable future (touch wood). I've no experience with shares etc so any help would be great.

Cheers,
A

Are you planning on buying a house in next 5-10 years? If so I'd sit on this 15K and use it to increase your deposit, thereby slashing the amount of interest you'd need to pay. Just an alternative option.

aido12345

topper_harley2 wrote: »

Are you planning on buying a house in next 5-10 years? If so I'd sit on this 15K and use it to increase your deposit, thereby slashing the amount of interest you'd need to pay. Just an alternative option.

Thanks Topper. Already got the house part sorted.

Senator Palpatine

You mentioned that you are contributing to a company pension scheme, but are you maximising your AVCs?

aido12345

Senator Palpatine wrote: »

You mentioned that you are contributing to a company pension scheme, but are you maximising your AVCs?

Perhaps not maxing it out but between company & personal contributions there's 20% of salary going into it yearly. I plan to increase that slowly as the years go by.

Senator Palpatine

aido12345 wrote: »

Perhaps not maxing it out but between company & personal contributions there's 20% of salary going into it yearly. I plan to increase that slowly as the years go by.

There's your answer so; if you don't need access to these monies, top up for 2016 and 2017 by way of AVC. Pension investing is by far the most tax efficient.

aido12345

Senator Palpatine wrote: »

There's your answer so; if you don't need access to these monies, top up for 2016 and 2017 by way of AVC. Pension investing is by far the most tax efficient.

Is it though?

When I turn 67/68 & retire & hopefully my pension has performed, I will hopefully get a lump some of X & then invest in a pension payout scheme with the rest. If this pension payout scheme plus my government pension (233 a week) goes over the tax thresholds then I will be taxed anyways @ the various rates, thus loosing a chunk to the government also.

My thoughts are to have some kind of investment portfolio, some bank savings & my pension. If needs be down the line I can draw on savings & sell investments.

Senator Palpatine

aido12345 wrote: »

Is it though?

When I turn 67/68 & retire & hopefully my pension has performed, I will hopefully get a lump some of X & then invest in a pension payout scheme with the rest. If this pension payout scheme plus my government pension (233 a week) goes over the tax thresholds then I will be taxed anyways @ the various rates, thus loosing a chunk to the government also.

My thoughts are to have some kind of investment portfolio, some bank savings & my pension. If needs be down the line I can draw on savings & sell investments.

It absolutely is.

You can invest in the way you've outlined through a pension.

You pony up €60, the State ponies up €40 (tax relief). €100 is invested for a very long time in a structure where everything grows tax-free. Yes you pay tax when you draw down your pension, but the combination of the tax-free lump sum, no PRSI at 66+ and the probably application of the lower 20% rate make pension saving massively attractive.

conditioned games

If you want to lose most of that 15k then index funds or anything stock related is the way to go. At the moment stock markets have got a jump with the feel good factor of Trump getting elected in America. But from March onwards expect the confidence in all the debt around the world that have been pushing up the markets in the last 8yrs to deteriorate. If you want to put your funds in something for the next 3yrs then physical silver is your best investment.

Senator Palpatine

conditioned games wrote: »

If you want to lose most of that 15k then index funds or anything stock related is the way to go. At the moment stock markets have got a jump with the feel good factor of Trump getting elected in America. But from March onwards expect the confidence in all the debt around the world that have been pushing up the markets in the last 8yrs to deteriorate. If you want to put your funds in something for the next 3yrs then physical silver is your best investment.

Outrageous advice. Ignore it.

For a long-term investor, the stock market is the best place to be.

Ronan H

Are you looking at startup companies etc. or just financial products?

conditioned games

Stay away from pensions as well. Every 7 to 9 yrs there's a market crash and the value of your investment gets hammered. Then it has to grow again on the recovery. The current recovery is near the end and pensions are not a good place right now.

Senator Palpatine

conditioned games wrote: »

Stay away from pensions as well. Every 7 to 9 yrs there's a market crash and the value of your investment gets hammered. Then it has to grow again on the recovery. The current recovery is near the end and pensions are not a good place right now.

Frighteningly bad advice. Short-term volatility should not concern longer-term investors. Sensible diversified investments are SIGNIFICANTLY higher than they were prior to the 2008 crash.

conditioned games

Senator Palpatine wrote: »

Frighteningly bad advice. Short-term volatility should not concern longer-term investors. Sensible diversified investments are SIGNIFICANTLY higher than they were prior to the 2008 crash.

Look at the big boys like Buffet, Soros etc.. sitting on large amounts of cash waiting on this thing to play out first before getting back in. There's no shortage of bad advice on here just like with a financial broker. Trust your gut, look at where the world is heading, the worst is still yet to come.

aido12345

conditioned games wrote: »

Look at the big boys like Buffet, Soros etc.. sitting on large amounts of cash waiting on this thing to play out first before getting back in. There's no shortage of bad advice on here just like with a financial broker. Trust your gut, look at where the world is heading, the worst is still yet to come.

Thanks for all the advice. I'll do some more research & I'll put my eggs in different baskets.

Good to hear the negatives too.

Francie Barrett

conditioned games wrote: »

Look at the big boys like Buffet, Soros etc.. sitting on large amounts of cash waiting on this thing to play out first before getting back in. There's no shortage of bad advice on here just like with a financial broker. Trust your gut, look at where the world is heading, the worst is still yet to come.

As someone who has been actively investing for nearly 20 years, I can safely say this is not good advice.

For someone starting out with investing, "trusting your gut" or trying to time markets is about one of the worst things you can do. Trust me on this, I tried it for several years when I first started out. I bought all the publications, listened to all the experts, traded in and out on positions. I was very active in the markets, put a lot of time and research into my efforts, and for all that I badly under-performed the market. The killing thing was if I had just monthly drip fed a regular monthly amount into an index fund and achieved the market average for the last 20 years, I would actually be close to being a millionaire by now.

conditioned games

Francie Barrett wrote: »

As someone who has been actively investing for nearly 20 years, I can safely say this is not good advice.

For someone starting out with investing, "trusting your gut" or trying to time markets is about one of the worst things you can do. Trust me on this, I tried it for several years when I first started out. I bought all the publications, listened to all the experts, traded in and out on positions. I was very active in the markets, put a lot of time and research into my efforts, and for all that I badly under-performed the market. The killing thing was if I had just monthly drip fed a regular monthly amount into an index fund and achieved the market average for the last 20 years, I would actually be close to being a millionaire by now.

Allowing for inflation your original investment would be just about breaking even. Also over the last 20yrs we've had the dot com crash in 2000, financial crisis 2008 and soon to be debt and currency crisis 2017 into 2019. Timing of original investment makes a big difference when it comes to a general upturn or downturn.

irish_investr

15k to invest and future additions of 5-7k per year: I would say to sit on the 15, put it in the bank. Do not invest it in stocks, funds, ETFs, or tie it up in any way. Perhaps 1 or 2 thousand small gold coins or bar, but not more (and not silver, because while Gold is VAT free, silver is not)

Then, with the additional 5-7k per year, which I assume is a monthly sum, invest it 100% in a global ETF, on a monthly basis. For example the MSCI World low volatility (I choose Low volatility version just to iron out a few peaks and valleys). At the moment, your knowledge and experience of investing and markets does not warrant anything other than a broad, diversified investment.

Yes, the market MAY be a bit high, and it may drop, crash, or rally. We don't know. But with the 15k reserve, you will be able to buy dips and crashes, without risking all your capital at once. And at the same time the 5-7k per year will be put to (hopefully) good use, taking on gradual risk.

My 2 cents

Nody

conditioned games wrote: »

Allowing for inflation your original investment would be just about breaking even. Also over the last 20yrs we've had the dot com crash in 2000, financial crisis 2008 and soon to be debt and currency crisis 2017 into 2019. Timing of original investment makes a big difference when it comes to a general upturn or downturn.

Sorry but this is so ignorantly wrong it's silly; here's an example of someone ALWAYS investing ONLY right before a crash through lump sums for the last 30 years. With an 184k original investment they are still a millionaire today. How is he a millionaire? Time in the market because the market recovers and then some between every crash consistently and currently there less than 10 people living who can even semi accurately predict the tops and bottoms of the market. If you are long term investor you invest monthly the same amount no matter if it goes up and down and you do come out a hell of a lot better than someone waiting and trying to constantly target the "right time"; consistent buying into a set of index funds and remaining on the market in thick and thin is the best way to grow capital for an amateur investor.

Cute Hoor

aido12345 wrote: »

Thanks for all the advice. I'll do some more research & I'll put my eggs in different baskets.

Good to hear the negatives too.

Sensible view aido, do plenty of research yourself, it's your money. I like the contribution of Nody and the Senator here, I think it's good advice but that's just me.

It is of course good to hear the negative view as well, when considering conditioned games views as expressed above you may like to view them in parallel with his views in this interesting topic.
http://www.boards.ie/vbulletin/showthread.php?t=2056642498

phantom_lord

Don't ever listen to anyone that recommends buying physical metals OP.

conditioned games

Cute Hoor wrote: »

Sensible view aido, do plenty of research yourself, it's your money. I like the contribution of Nody and the Senator here, I think it's good advice but that's just me.

It is of course good to hear the negative view as well, when considering conditioned games views as expressed above you may like to view them in parallel with his views in this interesting topic.
http://www.boards.ie/vbulletin/showthread.php?t=2056642498

Still acquiring physical silver Hoor and will continue to do so until the opportunity is gone. The past few years the manipulators like JP Morgan have had the upper hand through their paper contracts but like all manipulations they eventually fail. I have to say I did not expect the markets to be kept inflated by all this currency printing and cheep debt around the world as long as this but hey it has allowed me to acquire more physical which I am happy about. Bitcoin on the other hand has been free from the manipulation for the last number of years as the banks can't compress the price through paper contracts and has now set a recent record $1050.

Look at the detail, there are articles such as that quoted by Nody which are not based on truth. If you look at the S&P 500 index for the last 15 years a $10k investment would be about $18k today which isn't great when inflation over that period is factored in. http://www.marketwatch.com/story/the-sp-500-index-is-not-your-buddy-2015-01-14

Key to true wealth from investing is to get into the stock markets at the bottom, get out at the top and hold the funds in safe haven assets during times of crisis. Now is a good time not to be in stocks or index linked funds.