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First time market investor

  • 13-04-2019 9:02pm
    #1
    Registered Users Posts: 617 ✭✭✭ 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?


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Comments

  • Closed Accounts Posts: 391 ✭✭ nailer54321


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


  • Registered Users Posts: 617 ✭✭✭ Dual wheels


    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?


  • Registered Users Posts: 19 ✭✭✭ 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.


  • Registered Users Posts: 19 ✭✭✭ Ron86r


    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?


  • Banned (with Prison Access) Posts: 1,181 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.


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  • Registered Users Posts: 1,788 ✭✭✭ Cute Hoor


    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.


  • Banned (with Prison Access) Posts: 1,181 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


  • Site Banned Posts: 160 ✭✭ 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.


  • Registered Users Posts: 617 ✭✭✭ 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?


  • Site Banned Posts: 160 ✭✭ Kidkinobe


    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.


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  • Registered Users Posts: 617 ✭✭✭ Dual wheels


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


  • Registered Users Posts: 1,788 ✭✭✭ Cute Hoor


    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?


  • Registered Users Posts: 1,788 ✭✭✭ Cute Hoor


    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.


  • Registered Users Posts: 617 ✭✭✭ 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?


  • Registered Users Posts: 1,788 ✭✭✭ Cute Hoor


    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.


  • Registered Users Posts: 23,320 ✭✭✭✭ lawred2


    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


  • Registered Users Posts: 617 ✭✭✭ 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?


  • Registered Users Posts: 1,788 ✭✭✭ Cute Hoor


    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


  • Registered Users Posts: 470 ✭✭ PHG


    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


  • Registered Users Posts: 19 ✭✭✭ 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˜


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  • Registered Users Posts: 19 ✭✭✭ 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 B) 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?


  • Registered Users Posts: 470 ✭✭ 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 B) 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


  • Site Banned Posts: 160 ✭✭ 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.


  • Registered Users Posts: 617 ✭✭✭ 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


  • Registered Users Posts: 19 ✭✭✭ 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.


  • Registered Users Posts: 1,788 ✭✭✭ 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))


  • Registered Users Posts: 1,531 ✭✭✭ 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.


  • Registered Users Posts: 617 ✭✭✭ 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?


  • Moderators, Business & Finance Moderators Posts: 7,821 Mod ✭✭✭✭ Jim2007


    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.
    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.


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  • Registered Users Posts: 19 ✭✭✭ Ron86r


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

    No, Digero avoids this


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