First time market investor

Dual wheels

Hi all, I’m looking at investing 10k as a long term investment, as 10k is a small amount I’m guessing there is no point looking for dividends returns therefore I need to look for capital appreciation over 10/20 years. How does it work exactly? Say I bought shares in a listed company and held it for 10 years how do I calculate the potential return on 10k? For example say I buy at 1 euro a share and in 10 years the company is worth 1.50 per share does that mean in 10 years I now have 15k or does capital appreciation come into play?

nailer54321

Why would you not look for divident stock. Over 10 years you should be looking fir a stock that pays a high divident.

Dual wheels

nailer54321 wrote: »

Why would you not look for divident stock. Over 10 years you should be looking fir a stock that pays a high divident.

Like a REIT? So if I put 10k in a REIT and kept reinvesting it would that be the best way to go?

Ron86r

Hi,

I am in the process of educating myself on shares, stocks, markets etc. Investopeida allow for a 'dummy' account to be set up. You buy shares etc. With virtual money and invest as you would normally, however it is just about practicing and learning, rather than making or losing money.

I've also lodged a small amount of money with Digero. Once I feel I have a decent level of knowledge I will start buying a small amount of shares. I've just bought a house so I don't have a lot of free cash. I'm going to drip money into it and hopefully achieve a diverse portfolio.

I'm still 35 years off retirement so definitely playing the long game.

Ron86r

Dual wheels wrote: »

Like a REIT? So if I put 10k in a REIT and kept reinvesting it would that be the best way to go?

What's REIT?

Charles Ingles

Invest the whole lot in sterling it will be worth 20k in five years.
Well all this Brexit nonsense is over sterling will be the strongest currency in the world.

Cute Hoor

Charles Ingles wrote: »

Invest the whole lot in sterling it will be worth 20k in five years.
Well all this Brexit nonsense is over sterling will be the strongest currency in the world.

Using the 10k to buy sterling at today's rate and hoping to make 20k with it within 5 years would mean that sterling would have to hit 0.432p to the Euro during that timescale by my reckoning, the strongest that sterling has ever got against the Euro is over 0.70p so that would be some strengthening indeed.

Charles Ingles

Cute Hoor wrote: »

Using the 10k to buy sterling at today's rate and hoping to make 20k with it within 5 years would mean that sterling would have to hit 0.432p to the Euro during that timescale by my reckoning, the strongest that sterling has ever got against the Euro is over 0.70p so that would be some strengthening indeed.

I think the euro as a currency is going to tank. I don't think it's going to last as a currency

Kidkinobe

Rule of thumb is that your investment should double every 8 years, invest 10k today and in 8 years you have 20k, invest that 20 and in 8 years you have 40.

Dual wheels

Kidkinobe wrote: »

Rule of thumb is that your investment should double every 8 years, invest 10k today and in 8 years you have 20k, invest that 20 and in 8 years you have 40.

Thanks for the advice, so essentially if I invested in a steady stock and left it for 20 years in theory that will have doubled twice?

Kidkinobe

Dual wheels wrote: »

Thanks for the advice, so essentially if I invested in a steady stock and left it for 20 years in theory that will have doubled twice?

Yes, a little over twice if the 8 year rule continues to do what it has done for the past 100 years.
I started investing 8/9 years ago and it has more than doubled, like way more, but it was an exceptional run with some lucky breaks.

Dual wheels

Incidentally I see this morning that Green REIT are selling off their portfolio, why are they doing that?

Cute Hoor

Charles Ingles wrote: »

I think the euro as a currency is going to tank. I don't think it's going to last as a currency

What makes you think the Euro is going to tank and then disappear?

Cute Hoor

Dual wheels wrote: »

Incidentally I see this morning that Green REIT are selling off their portfolio, why are they doing that?

They say they are doing it because the share is trading at a significant discount to it's NAV (1.83 as per year-end accounts) and they want to maximise value for shareholders. Doesn't mean of course that they will find a buyer, particularly one who is prepared to pay the full price.

Dual wheels

Cute Hoor wrote: »

They say they are doing it because the share is trading at a significant discount to it's NAV (1.83 as per year-end accounts) and they want to maximise value for shareholders. Doesn't mean of course that they will find a buyer, particularly one who is prepared to pay the full price.

Thanks for your reply, interesting, why would it be trading significantly lower than the NAV? Say they did sell would that mean they would delist and/or wind up the company? Also would it be a good or bad time to invest in green REIT? And/or Irish REITs in general?

Cute Hoor

Dual wheels wrote: »

Thanks for your reply, interesting, why would it be trading significantly lower than the NAV? Say they did sell would that mean they would delist and/or wind up the company? Also would it be a good or bad time to invest in green REIT? And/or Irish REITs in general?

Hard to know but it's essentially a play on the Dublin commercial property market so maybe the market is concerned that it may not maintain it's value, maybe the market sees better value and returns elsewhere, there could be lots of reasons.

If they sell then presumably they would be delisted, the buyer of course could be offering cash or paper or a combination of both which might leave you holding shares in another (most likely international) company.

Using the 'buy the rumour sell the news' principle now would not be a good time to buy imo, but who knows. Don't know anything about the Irish REITs, never looked at them, to my cost it would appear.

lawred2

Charles Ingles wrote: »

I think the euro as a currency is going to tank. I don't think it's going to last as a currency

That's probably not a great basis for investment

Dual wheels

Cute Hoor wrote: »

Hard to know but it's essentially a play on the Dublin commercial property market so maybe the market is concerned that it may not maintain it's value, maybe the market sees better value and returns elsewhere, there could be lots of reasons.

If they sell then presumably they would be delisted, the buyer of course could be offering cash or paper or a combination of both which might leave you holding shares in another (most likely international) company.

Using the 'buy the rumour sell the news' principle now would not be a good time to buy imo, but who knows. Don't know anything about the Irish REITs, never looked at them, to my cost it would appear.

Would this positively or negatively affect Hibernia REIT greens closest competitor? Hibernia recently sold off a building, would this all point to a projected dip in Dublin commercial property?

Cute Hoor

Dual wheels wrote: »

Would this positively or negatively affect Hibernia REIT greens closest competitor? Hibernia recently sold off a building, would this all point to a projected dip in Dublin commercial property?

Hibernia should get a share boost from this as well. Not sure one could link this sale to a dip in Dublin commercial property, it could be just a lack of love for Green

PHG

Dual wheels wrote: »

Thanks for the advice, so essentially if I invested in a steady stock and left it for 20 years in theory that will have doubled twice?

I mean this in the nicest way OP. DO NOT PUT IT ALL IN ONE STOCK!! A good stock today may be a bad one in a months time or 3 years time.

If you want to invest, there are plenty of threads on here with the same question asked.

IMO:

- If you have any debt, use it to clear it
- If you do not have an Emergency fund of 3/6 months living expenses, then stick it in a basic account e.g. current or instant access account in case you need instant access to it. An emergency is something like; Boiler breakING, Car breaks down, medical emergency etc. NOT a holiday fund!! It is not there to make you money but to cover yourself
- If you are not bothered about doing a load of research, talk to a Financial Advisor who will help you invest in a fund or multiple ones. If you do not understand what they are saying (as in they are not explaining in plain English) find another. It's your money, you need to know what is going on with it!
- If you do not have a pension, then use that to kick start one using a Financial Advisor

Thanks,

PHG

Ron86r

PHG wrote: »

I mean this in the nicest way OP. DO NOT PUT IT ALL IN ONE STOCK!! A good stock today may be a bad one in a months time or 3 years time.

If you want to invest, there are plenty of threads on here with the same question asked.

IMO:

- If you have any debt, use it to clear it
- If you do not have an Emergency fund of 3/6 months living expenses, then stick it in a basic account e.g. current or instant access account in case you need instant access to it. An emergency is something like; Boiler breakING, Car breaks down, medical emergency etc. NOT a holiday fund!! It is not there to make you money but to cover yourself
- If you are not bothered about doing a load of research, talk to a Financial Advisor who will help you invest in a fund or multiple ones. If you do not understand what they are saying (as in they are not explaining in plain English) find another. It's your money, you need to know what is going on with it!
- If you do not have a pension, then use that to kick start one using a Financial Advisor

Thanks,

PHG

This seems like remarkably clear advice for a boards.ie post ðŸ˜

Ron86r

Ron86r wrote: »

This seems like remarkably clear advice for a boards.ie post ðŸ˜

I am on a three year fixed rate mortgage, so cannot pay off extra until the end of that period. Do you think I should A) save everything I have and put it towards the mortgage at the end of the three years put all of my spare cash into stocks etc and just continue with regular mortgage payments or C) put something like 20% of spare cash into investments and 80% aside for a time when I can make a lump sum payment off my mortgage?

PHG

Ron86r wrote: »

I am on a three year fixed rate mortgage, so cannot pay off extra until the end of that period. Do you think I should A) save everything I have and put it towards the mortgage at the end of the three years put all of my spare cash into stocks etc and just continue with regular mortgage payments or C) put something like 20% of spare cash into investments and 80% aside for a time when I can make a lump sum payment off my mortgage?

Same applies as per previously mentioned about emergency fund, pension and debt. If that is all done, and again this is just my opinion (I do not know your financial circumstances). I would save the cash and put it in a easy access account. There is a thread somewhere on here about KBC offering 2% (minus DIRT) on a savings account. This is money you don't want to gamble if you want to pay off the mortgage early, IMO. Depending on the amount you are going to pay in, balance on the mortgage and years left, you could save a small fortune on interest payments over the lifetime of your mortgage with a lump some injection. Plenty of sites out there that can work out the calculation based on the mortgage, rate and amount put in.

Your biggest income generator is your salary and will unlikely ever be your investments. I can't remember where I read this (I read a lot of this stuff, podcasts etc. as it is one of my main hobbies) but if you invest in a fund, your probability of making money in 1 year is approx 40%, in 3 years approx 60%, and over 5 years approx 80%, including fees. I am open to correction on those figures as was from an article somewhere a few weeks back. This does not mean you make a fortune, likely just benchmark and obviously fund dependent. if you want to take that risk, that is your call only!

If you are going to invest, you need to take it seriously and remember, it needs to be money you can afford to lose.

The reply to Dual Wheels was because 7 years ago I found myself in debt to about 45% of my then gross salary then. I realised I was being a tool and spent a year clearing it (a mix of loans and credit cards). It bloody hurt too having to miss nights out and not doing some trips but when it was done, it lifted so much stress off my shoulders! I look around now and can go out if I want to or not. If I get sacked tomorrow I can chill out for a few months if needed. I am not loaded, just had to get my sh*t together. I do get worried when I see the amount of people paying for something simple as pints with credit cards! We as a country don't seem to have learned our lesson.

As a side note on pensions, watch out for the allocation rate. There are obviously management and performance fees from pensions. However, brokers do no have to tell you about the allocation rate. The allocation rate means that if you do not invest a minimal amount, then they can take an extra fee from your investments. It is a sneaky one like USC.

Thanks,

PHG

Kidkinobe

PHG wrote: »

Same applies as per previously mentioned about emergency fund, pension and debt. If that is all done, and again this is just my opinion (I do not know your financial circumstances). I would save the cash and put it in a easy access account. There is a thread somewhere on here about KBC offering 2% (minus DIRT) on a savings account. This is money you don't want to gamble if you want to pay off the mortgage early, IMO. Depending on the amount you are going to pay in, balance on the mortgage and years left, you could save a small fortune on interest payments over the lifetime of your mortgage with a lump some injection. Plenty of sites out there that can work out the calculation based on the mortgage, rate and amount put in.

Your biggest income generator is your salary and will unlikely ever be your investments. I can't remember where I read this (I read a lot of this stuff, podcasts etc. as it is one of my main hobbies) but if you invest in a fund, your probability of making money in 1 year is approx 40%, in 3 years approx 60%, and over 5 years approx 80%, including fees. I am open to correction on those figures as was from an article somewhere a few weeks back. This does not mean you make a fortune, likely just benchmark and obviously fund dependent. if you want to take that risk, that is your call only!

If you are going to invest, you need to take it seriously and remember, it needs to be money you can afford to lose.

The reply to Dual Wheels was because 7 years ago I found myself in debt to about 45% of my then gross salary then. I realised I was being a tool and spent a year clearing it (a mix of loans and credit cards). It bloody hurt too having to miss nights out and not doing some trips but when it was done, it lifted so much stress off my shoulders! I look around now and can go out if I want to or not. If I get sacked tomorrow I can chill out for a few months if needed. I am not loaded, just had to get my sh*t together. I do get worried when I see the amount of people paying for something simple as pints with credit cards! We as a country don't seem to have learned our lesson.

As a side note on pensions, watch out for the allocation rate. There are obviously management and performance fees from pensions. However, brokers do no have to tell you about the allocation rate. The allocation rate means that if you do not invest a minimal amount, then they can take an extra fee from your investments. It is a sneaky one like USC.

Thanks,

PHG

I wouldn't bother with putting cash away for 2% which will just be eroded by inflation, meaning you actually lose money by placing it in the bank.
The thread author has a mortgage making his home an investment, you mention diversification, so they have their home as one investment and dipping into shares would be diversifying...And they have said they are looking at 10/20 years of investing. They also have youth on their side which means they should take a bit of risk, they aint going to lose 10k over 10 years and end up with nothing unless they do something really stupid like putting it on horse number 4 in the 1.30.
But to me and Im sure you will agree as you say it is your hobby, taking that 10k and going into shares and reading and learning and looking and watching over a number of years will educate them, they might lose 1/2/3 k in the first few years and most likely they probably will but thats the cost of an education and that 1/2/3 k will be made back, within time, they will make sensible choices and decisions based on what they have learned in their first few years and going forward they will know when and why to invest due to simple observations of what is printed in media. They wont get it right all the time but nobody does, like you say, diversification in key to coming out on top.

Dual wheels

Thanks for all the great advice, how could I find out what the average retail investment is in Hibernia REIT? What I’m thinking is putting 10k in Hibernia and leave it be for 20 years

Ron86r

What I am now struggling with is how on earth you remain tax compliant if buying shares yourself. Anybody any experience with this. Seems like a total pain.

Cute Hoor

Ron86r wrote: »

What I am now struggling with is how on earth you remain tax compliant if buying shares yourself. Anybody any experience with this. Seems like a total pain.

It's pretty simple, keep a record of your dividends and share disposals, and fill in your Form 11 at the end of the year, declaring dividends earned (income tax due on these) and Capital Gains (CGT due on these if CG is over 1,270 euro (2,540 for a married couple))

ballyharpat

Kidkinobe wrote: »

I wouldn't bother with putting cash away for 2% which will just be eroded by inflation, meaning you actually lose money by placing it in the bank.
The thread author has a mortgage making his home an investment, you mention diversification, so they have their home as one investment and dipping into shares would be diversifying...And they have said they are looking at 10/20 years of investing. They also have youth on their side which means they should take a bit of risk, they aint going to lose 10k over 10 years and end up with nothing unless they do something really stupid like putting it on horse number 4 in the 1.30.
But to me and Im sure you will agree as you say it is your hobby, taking that 10k and going into shares and reading and learning and looking and watching over a number of years will educate them, they might lose 1/2/3 k in the first few years and most likely they probably will but thats the cost of an education and that 1/2/3 k will be made back, within time, they will make sensible choices and decisions based on what they have learned in their first few years and going forward they will know when and why to invest due to simple observations of what is printed in media. They wont get it right all the time but nobody does, like you say, diversification in key to coming out on top.

This is perfect, I would also advise you to do this, open the virtual portfolio on Investopedia, for 6 months, or a year. Read a lot in that length of time, reasons to buy a stock, and reasons not to buy a stock. You will find conflicting advice a lot of the time, but you can make a decision after on your own. `this education you give yourself, can be worth more to you than your salary, if you are young enough, and you do it successfully.

My first trading month, I lost 3k out of 5k. `I pulled my 2k and opened a virtual portfolio for a year, researched, and started again, I have beaten the market 13 over the last 14 years. That's not to say that I haven't lost money on different stocks, I have, but others and my technique have limited my losses and increased my gains. I am sitting in a very good position right now, but I only have 10% in stocks, 1% cash, the rest in property. But that is enough diversity for me. There was a time I was 100% stocks, up until 2012.

Dual wheels

Ron86r wrote: »

What I am now struggling with is how on earth you remain tax compliant if buying shares yourself. Anybody any experience with this. Seems like a total pain.

So you don’t need to go through a broker to buy shares?

Jim2007

Charles Ingles wrote: »

Invest the whole lot in sterling it will be worth 20k in five years.
Well all this Brexit nonsense is over sterling will be the strongest currency in the world.

Charles Ingles wrote: »

I think the euro as a currency is going to tank. I don't think it's going to last as a currency

Long on opinions and short of facts. Best ignored.

Ron86r

Dual wheels wrote: »

So you don’t need to go through a broker to buy shares?

No, Digero avoids this

Dual wheels

Ron86r wrote: »

No, Digero avoids this

Are digero not a broker?
So it’s fully down to the individual themselves to pay cgt taxes etc?

Ron86r

Dual wheels wrote: »

Are digero not a broker?
So it’s fully down to the individual themselves to pay cgt taxes etc?

Unfortunately it is. My plan is low frequency purchases e.g. monthly. Fixed amounts and keep track of everything. Still a pain but better than giving somebody else my money.

PHG

Ron86r wrote: »

What I am now struggling with is how on earth you remain tax compliant if buying shares yourself. Anybody any experience with this. Seems like a total pain.

I use spread betting to avoid a lot of this but it takes a bit of getting used to and knowing how much the spread costs. Spread betting can be dangerous too and have been burned due to stupidity but have the hang of it now.

FWIW, I only do it on UK shares, Dax and Dow. Again, this took years, the Dax and Dow can move rapid quick!! A stop loss has saved me too many times!!

The Tetrarch

Wait for the crash. It should happen in the next 4/5 years.
Then invest.

Supercell

I would suggest BRK.B shares, closest thing to an ETF we can buy for the US stock market and as safe as it gets for a single share, though Buffet's age is also a concern of course. Longer term i believe you'll beat most "retail" investors with this.

The Tetrarch

^ That is what I did in November 2008, buying Berkshire Hathaway B shares, selling four or five years later for double.

I have kept a newspaper cutting since 29/07/02
"Bubbles, crashes and merciless markets"
... quoting Lord Overstone, he said the stages in a market cycle were: "Quiescence, improvement, confidence, excitement, overtrading, convulsion, pressure, stagnation, ending again in quiescence."

... Charles Kindleberger in his book Manias, Panics and Crashes
1) the first stage is displacement ... the end of a war, a technical innovation (railways, wireless, internet)
2) displacement must be followed by second stage credit creation. Only money moves markets, and a boom needs plenty: easy credit, cheap interest rates.
3) third stage, euphoria. Investors buy not for intrinsic worth, but in the hope they will be able to sell to another, greater fool.
4) stage four, the bust. Panic selling possibly due to a bank failure, a firm stretched too tight, revelation of a swindle.
5) stage five, revulsion. Negative euphoria, investors can no longer bring themselves to participate in the market at all.
When investors finally turn their backs on the market activity will decline. For the canny few who have saved cash is a buying opportunity.

I sold my house today. The money will be held for a number of years until the crash. When things are good people think things are normal.

The market is high at present. It is on a ten year run up.
If you do not believe the market is high these are the percentage increases for the lows to the highs in the DJIA from 08/08/1896 to 29/04/2019
+135%, +257%, +497%, +372%, +129%, +222%, +75%, +86%, +67%, +76%, +38%, +250%, +73%, +295%, +55%, +94%, +406%

The 406% Dow Jones increase from 6,547.05 on 09/03/2009 to 26,559.56 this afternoon is the second highest in the above list of seventeen highs.
Fwiw the 497% increase ended on 3rd September 1929.

Another good way to assess the market level is to look at statistics on the World Bank website.
Find the total value of the USA economy. Find the total value of the USA stock markets. Compare.

Supercell

Actually today I was researching just this topic as I spend too much time looking at charts and want to just set and forget mostly (maybe just review once a week/month)
The thing about BRK.B , the elephant in the room, is Buffet's age. I do think, rightly or wrongly, that BRK.B stock will plunge briefly when the inevitable happens - which will be a buying opportunity.

There are however a bunch of other stocks that have performed or outperformed the market over the last 5, etc years which would make up a good beginners safe (ish) portfolio , I'll share a fuller screenshot tomorrow, here's a few to show what I mean from memory (have a file in work with a fuller list of these).

Would love to hear some comments on this from some of our more experienced investors here.

SPY for reference is dark blue, current price indicated by dotted line, prices to the left.

Year to date:



Last Year:



Last 5 years:



I'd like to build in an element of dividend return as well, if anyone has done something like this already, please do share, comment etc