Invest in dollars or euro

marshbird

I have just made my first investment in the NYSE with degiro. But i'm wondering would it have been better to invest in the same company on a european stock exchange because I would not be exposed to currency fluctuations? It looks like there is less trading on the european stock exchanges so my investment may be less liquid.

Could any experienced investors advice me on this please?

CeilingFly

I'd cash out.

I'm no expert, but if you have a question like that then you are near certain going to lose heavily.

marshbird

CeilingFly wrote: »

I'd cash out.

I'm no expert, but if you have a question like that then you are near certain going to lose heavily.

Thanks for the advice but that does not answer my question. Better to say nothing if you are not going to be helpful.

In theory there should be no difference.
Look back at the history of the stock and you will see the European one moving inline with the US one taking into account the relative exchange rates.

If they were out of sync there would be a profit to be made which would cause transactions which would eliminate the difference.

marshbird

Thanks PG. And what about liquidity when trying to sell? Could that be an issue?

CeilingFly

marshbird wrote: »

Thanks for the advice but that does not answer my question. Better to say nothing if you are not going to be helpful.

Its very helpful. With respect you seem to have a very low knowledge of how company valuation and shares work.

You are at a huge disadvantage and this will probably cause you losses.

Buy into a fund

marshbird

CeilingFly wrote: »

Its very helpful. With respect you seem to have a very low knowledge of how company valuation and shares work.

You are at a huge disadvantage and this will probably cause you losses.

Buy into a fund

I plan on having a large percentage of my investments in ETF's. UCITS Dividend accumulating funds to be exact because it is no longer possible to invest in US domiciled ETF's. At the moment I am just finding my feet. I appreciate that I am new to investing and I know it is risky but the money I am investing is money that I can afford to lose.

topper_harley2

marshbird wrote: »

I plan on having a large percentage of my investments in ETF's. UCITS Dividend accumulating funds to be exact because it is no longer possible to invest in US domiciled ETF's. At the moment I am just finding my feet. I appreciate that I am new to investing and I know it is risky but the money I am investing is money that I can afford to lose.

UCIT funds are absolutely disastrous from a tax perspective. Search this forum for info of lack of offsetting of losses against gains, 8 year deemed disposal. I would strongly suggest you reconsider using UCIT funds as a long term strategy (assuming you are tax domiciled in Ireland).

marshbird

topper_harley2 wrote: »

UCIT funds are absolutely disastrous from a tax perspective. Search this forum for info of lack of offsetting of losses against gains, 8 year deemed disposal. I would strongly suggest you reconsider using UCIT funds as a long term strategy (assuming you are tax domiciled in Ireland).

Dardania posted a spreadsheet here on 05/01/18 that compares UCITS accumulating fund vs US ETF's that shows the US ETF's do perform better in most cases.

But if I open as US trading account there is an issue if you have over 60,000 dollars invested. Is this a better option?

Cute Hoor

marshbird wrote: »

But if I open as US trading account there is an issue if you have over 60,000 dollars invested. Is this a better option?

I presume you are talking about the US Estate Tax. If you die and you have US assets (including shares) then you are liable for US Estates Tax. However, imo, this is virtually uncollectible by the US authorities for non-US citizens. If I die (hopefully not in the near future) my co-owner of these US assets can simply liquidate the assets and repatriate the money to our Irish bank account. How would the US authorities be/become aware that I had kicked the bucket. If both co-owners or a single owner are gone to the great trading home in the sky then the next of kin could simply liquidate the assets and repatriate the money to our/their Irish bank account. Happy to have this theory filleted.

marshbird

Cute Hoor wrote: »

I presume you are talking about the US Estate Tax. If you die and you have US assets (including shares) then you are liable for US Estates Tax. However, imo, this is virtually uncollectible by the US authorities for non-US citizens. If I die (hopefully not in the near future) my co-owner of these US assets can simply liquidate the assets and repatriate the money to our Irish bank account. How would the US authorities be/become aware that I had kicked the bucket. If both co-owners or a single owner are gone to the great trading home in the sky then the next of kin could simply liquidate the assets and repatriate the money to our/their Irish bank account. Happy to have this theory filleted.

So this is not really an issue. I'll look into opening an american investment account. Thank you

Cute Hoor

marshbird wrote: »

So this is not really an issue. I'll look into opening an american investment account. Thank you

That's just my opinion marshbird, and what would I know. I have US accounts and am not unduly worried about it though.

marshbird

Cute Hoor wrote: »

That's just my opinion marshbird, and what would I know. I have US accounts and am not unduly worried about it though.

Not to worry Cute Hoor. I will be getting some professional financial advice soon anyway before I make any large investments. Any recommendation on a US service similar to Degiro? I have heard Interactive Investors and TD ameritrade mentioned on the forums

Cute Hoor

marshbird wrote: »

Not to worry Cute Hoor. I will be getting some professional financial advice soon anyway before I make any large investments. Any recommendation on a US service similar to Degiro? I have heard Interactive Investors and TD ameritrade mentioned on the forums

Yea, Interactive Brokers, TDAmeritrade and Firstrade are the brokers that are available to Irish citizens (somebody said here recently that they had an issue with trying to set up a TDAmeritrade account although not sure why).

All charge very low fees, TDA $6.95 per trade, Firstrade $2.95 per trade, and IB $0.005 per share. So if you were buying $232,000 worth of GOOG, it would cost you $6.95 with TDA, $2.95 with Firstrade, and $1 with IB. I have never had an issue with any of them. I probably prefer Firstrade, for ease of use.

IB probably ticks more boxes and is probably the ideal one for an Irish investor, you can fund your account in Euro and that would be your primary currency. You can then buy any other currency if you wish to trade stocks in that currency. So they're good from that point of view. Unlike DeGiro income from foreign stocks isn't converted back into euros, being held instead in the currency of that stock, which is useful as well. You can of course sell your dollars back into euro at any stage with you setting the limit, if needed, on the exchange rate. I find their website somewhat challenging though, the only fault I have with them.

Edit: This is a link for the fees structure for IB
https://www.interactivebrokers.com/en/index.php?f=1590&p=stocks1

Hope this helps.

bilbot79

CeilingFly wrote: »

Its very helpful. With respect you seem to have a very low knowledge of how company valuation and shares work.

You are at a huge disadvantage and this will probably cause you losses.

Buy into a fund

Leave it out. The deep end is the surest place to learn. And what would a keyboard warrior know from analysing one single question anyway? Too much of this on boards.

If you had answered the question aswell as criticised that would have been more acceptable but the instant prejudice. Take an early bath pls

marshbird

Cute Hoor wrote: »

Yea, Interactive Brokers, TDAmeritrade and Firstrade are the brokers that are available to Irish citizens (somebody said here recently that they had an issue with trying to set up a TDAmeritrade account although not sure why).

All charge very low fees, TDA $6.95 per trade, Firstrade $2.95 per trade, and IB $0.005 per share. So if you were buying $232,000 worth of GOOG, it would cost you $6.95 with TDA, $2.95 with Firstrade, and $1 with IB. I have never had an issue with any of them. I probably prefer Firstrade, for ease of use.

IB probably ticks more boxes and is probably the ideal one for an Irish investor, you can fund your account in Euro and that would be your primary currency. You can then buy any other currency if you wish to trade stocks in that currency. So they're good from that point of view. Unlike DeGiro income from foreign stocks isn't converted back into euros, being held instead in the currency of that stock, which is useful as well. You can of course sell your dollars back into euro at any stage with you setting the limit, if needed, on the exchange rate. I find their website somewhat challenging though, the only fault I have with them.

Edit: This is a link for the fees structure for IB
https://www.interactivebrokers.com/en/index.php?f=1590&p=stocks1

Hope this helps.

That's very helpful Cute Hoor many thanks for your help.

marshbird

bilbot79 wrote: »

Leave it out. The deep end is the surest place to learn. And what would a keyboard warrior know from analysing one single question anyway? Too much of this on boards.

If you had answered the question aswell as criticised that would have been more acceptable but the instant prejudice. Take an early bath pls

Well said bilbot. The boards are supposed to be there for people to help each other out in my opinion.

I have been reading the forums here for over a year and also AAM boards so I have a little knowledge but still need to learn a lot.

marshbird

Cute Hoor wrote: »

Yea, Interactive Brokers, TDAmeritrade and Firstrade are the brokers that are available to Irish citizens (somebody said here recently that they had an issue with trying to set up a TDAmeritrade account although not sure why).

All charge very low fees, TDA $6.95 per trade, Firstrade $2.95 per trade, and IB $0.005 per share. So if you were buying $232,000 worth of GOOG, it would cost you $6.95 with TDA, $2.95 with Firstrade, and $1 with IB. I have never had an issue with any of them. I probably prefer Firstrade, for ease of use.

IB probably ticks more boxes and is probably the ideal one for an Irish investor, you can fund your account in Euro and that would be your primary currency. You can then buy any other currency if you wish to trade stocks in that currency. So they're good from that point of view. Unlike DeGiro income from foreign stocks isn't converted back into euros, being held instead in the currency of that stock, which is useful as well. You can of course sell your dollars back into euro at any stage with you setting the limit, if needed, on the exchange rate. I find their website somewhat challenging though, the only fault I have with them.

Edit: This is a link for the fees structure for IB
https://www.interactivebrokers.com/en/index.php?f=1590&p=stocks1

Hope this helps.

If IB have a referral scheme I would be quite happy to say you have referred me Cute Hoor

Cute Hoor

marshbird wrote: »

If IB have a referral scheme I would be quite happy to say you have referred me Cute Hoor

Thank you very much, you had me off checking and they do have a referral program, but for non-us members you would have to be spending $333.34 in commissions before I would benefit from it. That is a helluva lot of commission which I would expect will take you a very long time if ever to reach. Thanks for the offer anyway.

marshbird

Cute Hoor wrote: »

Thank you very much, you had me off checking and they do have a referral program, but for non-us members you would have to be spending $333.34 in commissions before I would benefit from it. That is a helluva lot of commission which I would expect will take you a very long time if ever to reach. Thanks for the offer anyway.

It was worth a look anyway. If I win the lotto my commissions may be that high but not anytime in the near future anyway:(.

One thing I was thinking about is transferring money to an account with them, isn't it going to be really expensive? unlike the free sepa transfers to degiro

Cute Hoor

marshbird wrote: »

It was worth a look anyway. If I win the lotto my commissions may be that high but not anytime in the near future anyway:(.

One thing I was thinking about is transferring money to an account with them, isn't it going to be really expensive? unlike the free sepa transfers to degiro

No no, there is no cost in funding your IB account, remember your account will be held in Euro until you buy other currencies on their website, same as you would buy a stock, so you just do one of these sepa thingys same as for DeGiro. I think they do a pretty good rate for buying/selling currency and of course you can set a price limit same as you would do when buying stocks.

Edit: You would need to buy $77.6 million (give or take a few thousand) worth of Google shares to pay that amount of commission, so it would want to be a good lotto win