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So a Memestock was my first Stock. What Now?

  • 03-02-2021 12:24am
    #1
    Posts: 0 [Deleted User]


    Like many people, I jumped on the Gamestop rocket-ship last week. Before this I had never dabbled in the stock market or really knew anything about it. Over the last week though I have had many questions and thoughts about what to do next (to be clear, I don't mean jumping on another stock, I'm talking about practical things!) so I have been reading and researching as much as I can. I know there is a beginners thread for questions but I think this is a pretty unique situation, so I thought it might be useful to some to share what I have researched and found out. Others can add or take away as they see fit, and correct any errors, of which I am sure there will be a few!

    To start things off I'll put forward a number of the main scenarios people might find themselves in, with some suggested next steps.

    Scenario 1: I have sold all my stock and made a profit. This was a one time deal for me and I have no interest in doing anything more with stocks.
    First off, if you are in this situation, well done! Congratulations on making some money. Before you go off spending it there are a few things to consider.

    Capital Gains Tax (CGT).
    Regardless of how much (or little) profit you made you will still need to make a return to Revenue regarding this by the 31st October 2022.

    There is a personal exemption of €1,270. This means if you made a profit (i.e. sale price minus what you paid) of less than this you will not need to pay any CGT. However, you will still need to include this in your return next year. If you made more than the exemption you will need to pay CGT of 33% on anything above €1,270. (i.e. don't include the first €1,270 when calculating.). If you paid commission etc. on the transactions you can deduct them also. You must pay this CGT by December 15 2021 (this year!). You will not need an accountant or anything to do this, it is a very straightforward calculation, loads of detail on the Revenue website and on ROS and you can ring them too for help.

    Scenario 2: I have sold all my stock and have made a loss. This was a one time deal for me and I have no interest in doing anything more with stocks.
    Sorry to hear this, you are not the only one and I hope it wasn't too much money. But before you can put this all behind you there is one more thing. I discussed CGT above. Obviously you won't have to pay anything, but you should still make a return next year even if it was pocket money. Don't forget. If you sold these stocks within 4 weeks of their purchase you cannot offset the loss against any future Capital Gains as per Revenue rules:
    Shares sold within four weeks of acquisition

    If you sell them after holding them for longer then 4 weeks you can offset the loss in future.

    Shares bought and sold within a four-week period cannot be offset against other gains.
    You can only deduct the loss from a gain made on a subsequent disposal of same-class shares acquired within the four weeks.
    If you have sold your stocks at a loss after holding them for a period longer than 4 weeks, you can offset the loss against future gains.

    Scenario 3: My stocks have tanked but I am still holding! But I have no interest in doing anything more with stocks.
    Never give up hope! You have not made any losses (or gains) until you crystalize it by selling. Once you have sold, look at scenario 1 or 2 and proceed accordingly. In the mean time, as long as you have diamond hands you don't have to do anything further, although, in the unlikely scenario that company issue and you receive dividends you will have to declare this as income. This is extremely unlikely to happen so don't worry about it, and if it does it is easy to sort.

    Scenario 4: I have made a profit/loss/holding but I want to continue investing with stocks.
    Personally, I am still holding my GME but look like making a loss. However, I want to continue investing, but properly this time. Before we get around to that though, we still need to keep Revenue in mind going forwards. The detail I gave above still applies, however it gets more complicated with more buys and sells. I will not go into more complicated CGT stuff here like the 4 week rule, but I will say that record keeping is vital. Do not rely on any broker or institution to keep records for you. Keep your own too.

    Going forward though there are a few things to keep in mind (certainly I need to!)
    • The Gamestop situation was unique and may never happen again, It is certainly not the norm.
    • I was basically gambling here, on a sport I know nothing about. Like the aul one in the office who picks a horse in the grand national because the name sounds cool.
    • I was using what random people on reddit were saying as financial advice. Sure, it may have worked out well for some, but it is certainly not a sound strategy going forward.
    • Before risking any more money I need to learn more and decide on what my goals and strategy will be.
    In further posts I will explain a bit more about what I am doing in terms of bullet point four as I go along and hopefully people can give some pointers. Although the Gamestop roller-coaster is not totally over yet, many are already saying that it has greatly increased the number of retail investors. It will be interesting to see how these 'new entrants' such as myself will get on.


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Comments

  • Registered Users Posts: 13,582 ✭✭✭✭ partyjungle


    I'm in a similar boat. Have been holding crypto (and mining) for years but that's the limit of knowledge. GME was my first foray into stocks. I made a modest loss but didn't put in anything I wasn't ready to lose. I learnt an awful lot regardless. I'll be coming into a bit of money soon so am interested in putting some into something safe and stable.


  • Registered Users Posts: 8,751 ✭✭✭ Shedite27


    Good thread, on Scenario 2 however, you can't use that loss. You have to hold a stock for more than 30 days to allow it as a loss. It's something Irish Revenue put in a while back to deter people from day trading




  • Shedite27 wrote: »
    Good thread, on Scenario 2 however, you can't use that loss. You have to hold a stock for more than 30 days to allow it as a loss. It's something Irish Revenue put in a while back to deter people from day trading
    Thanks, I think you are right there, I'll edit it. You can only use that loss against gains made with the same stock within the four weeks. That's ridiculous.
    Shares sold within four weeks of acquisition

    Shares bought and sold within a four-week period cannot be offset against other gains.
    You can only deduct the loss from a gain made on a subsequent disposal of same-class shares acquired within the four weeks.
    In that case if you are in a scenario where you have already lost 'more' than the stocks are worth now you may be best advised not to crystalize any loss for four weeks so you can offset the entirety of the loss against a future gain.


  • Registered Users Posts: 3,277 ✭✭✭ roosterman71


    Seen this earlier. May be of some use to people on here





  • Can I afford to invest, and if so, how much?
    From reading around it would seem that the first thing to consider is if I can afford to invest at all, and if I can, how to decide on a budget. I've read quite a bit (again these are personal thoughts based on what I have read and could all be wrong!) and I will try at presenting my thoughts and what I have learned in a conversation style based on what I was asking myself. Some of this will depend and vary on what type of investing you are doing, but more on that later.

    I have savings, shouldn't I just invest all of this because it is not earning anything in my savings account?
    No, do not do this. This is a bad idea for a number of reasons. Firstly, you do not know what you are doing yet and may lose it all. Even if you did have a good idea as to what you are doing, it could still go wrong and you could lose it.

    You should not invest any money you will need in the next year. Lets say you are saving for a car or a house and plan to buy in the summer. If you put all this into stocks you may lose it, or you might have to sell your stocks at an inopportune time in terms of the market. Imagine you had to spend this money last March and you had it tied up in stocks, and had to sell you stocks at the start of covid? You would have lost loads.

    So to avoid this you should not invest money that you plan to spend on something specific in the next 12 months. You should also try and have a rainy day fund in cash to support you for 3/6 months. You do not want to have everything tied up in stocks forcing you to have to sell them, perhaps at an inopportune time, to pay for an unexpected bill.

    But the whole point of why I want to invest is because I have little money and I have debt I want to clear!
    In a future post I will go through the goal options I looked at what I am thinking about doing myself and how I have decided. But for now, it is sufficient to say that you should not invest money until you have sorted your own personal finances out. If you do not have the discipline in this area, how can you expect to be a success at investing? You need to get your personal finances in order and have a budget. There are plenty of things out there that can help you. Have a look at your incomings and outgoings and categorize them all so you know exactly what you are spending week to week and month to month and on what.

    After you have done that you need to try and work out if you are overspending. Some items might be obvious, others no so much. One resource that is especially helpful in an Irish context is the 'Reasonable Living Expenses' calculator offered by the Insolvency Service of Ireland. Details on this can be found here and a calculator that you can put details into is available here: https://backontrack.ie/rle-calculator/

    To explain, the RLE's are a calculation that the government use to calculate how much money you need to have a "reasonable" lifestyle. They use this for people who are insolvent or are declared bankrupt. It is a "frugal" calculation but a realistic one too, many people are forced to live by these figures. There is a space for "Special Circumstances" be sure to only put stuff in here that you think is strictly necessary (say if you have ongoing medical expenses, car loan repayments etc.), not stuff like Netflix. Once it gives you a figure, subtract this from your net income. The RLE's are a bit frugal so you may want to add a little extra on to them depending on your circumstances. This should all help you to see if you are overspending and will enable you to adjust accordingly.

    If you have any remaining money after all this, you need to decide how to split this between investment money, clearing any debt and savings. Personally I would be inclined to get rid of any high interest debt like credit cards first, then work on getting savings to a level as previously discussed and finally investment money. You might look at splitting the money 80/20 between savings and investment money and adjusting this ratio as time goes by.

    I've done this and I have no money left over!
    If you have no money whatsoever left over after doing all the sums and being strict with your spending, I'm afraid you can't really afford to invest currently. You do not want to be taking money you need for bills and investing it hoping to make a quick profit. It probably won't work, and it is not fair on you and your family. You need to identify ways either to earn more money or to reduce expenses. But don't give up, please read on. You can still learn about everything so when you can afford it, you are ready.

    I have done all my budgeting and I have decided I can afford to invest, lets go!!
    Not so fast. Rushing in is a good way to lose your money. They only thing you know at this stage is that you have some money that you can reasonably, and responsibly, afford to invest. You still don't know what you are doing.

    Regardless of whether you can currently afford to invest or not your next steps are the same. You need to learn about the market, decide on a realistic goal, and decide on an investment strategy and style. I'll go through my thinking on these topics in future posts.

    (Again just to reiterate I'm a complete newbie to all of this and an experienced person might think I'm talking rubbish, but these are my thoughts and approach to it, mileage may vary etc.)


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  • Just to add to the above so people know where I am at, I am in a position where I can afford to invest some money.


  • Registered Users Posts: 605 PaddyTheNth


    Well done on.this thread.

    If I might suggest:
    1. You say don't invest if you need the money in next 12 months. That's a good starting point, but even at that period you're carrying quite a bit of risk that it will be worth less than when you started. A 10-20 year horizon gives you a better chance but still doesn't guarantee positive return, based on historical performance
    2. Something like 95% of professional investment managers do not manage to beat the average total market return over 5-10 years. If someone wants to make money in the stock market, the best option for most is to buy an index product and hold it. Boring yes, but statistically a good approach.
    3. If you want to day trade, you're playing in a game rigged against you in favour of the pros/institutions. You don't know the rules, you can't play when they play and you have to tell them your move before you can make it and give them time to decide if they want to take advantage of it. Don't use traditional Irish brokers if you want to day trade unless you're moving very large amounts, the commissions will eat all your profit.
    4. A monkey throwing darts would have made good money picking stocks in the last decade, including 2020. Don't expect those market conditions to last forever. Don't invest money you can't afford to lose.
    5. ETFs tracking an index are a good approach re number 2 above, except they are punitively taxed in Ireland. Despite that, an Accumulating ETF isn't awful from a tax perspective for the long term holder (with the hope that a long term hold means I don't have losses so don't lose out in terms of not being able to offset those losses on ETF against gains on other investments.
    6. Stock picking can be fun if you view it as entertainment with a potential for making money.




  • Well done on.this thread.

    If I might suggest:
    1. You say don't invest if you need the money in next 12 months. That's a good starting point, but even at that period you're carrying quite a bit of risk that it will be worth less than when you started. A 10-20 year horizon gives you a better chance but still doesn't guarantee positive return, based on historical performance
    2. Something like 95% of professional investment managers do not manage to beat the average total market return over 5-10 years. If someone wants to make money in the stock market, the best option for most is to buy an index product and hold it. Boring yes, but statistically a good approach.
    3. If you want to day trade, you're playing in a game rigged against you in favour of the pros/institutions. You don't know the rules, you can't play when they play and you have to tell them your move before you can make it and give them time to decide if they want to take advantage of it. Don't use traditional Irish brokers if you want to day trade unless you're moving very large amounts, the commissions will eat all your profit.
    4. A monkey throwing darts would have made good money picking stocks in the last decade, including 2020. Don't expect those market conditions to last forever. Don't invest money you can't afford to lose.
    5. ETFs tracking an index are a good approach re number 2 above, except they are punitively taxed in Ireland. Despite that, an Accumulating ETF isn't awful from a tax perspective for the long term holder (with the hope that a long term hold means I don't have losses so don't lose out in terms of not being able to offset those losses on ETF against gains on other investments.
    6. Stock picking can be fun if you view it as entertainment with a potential for making money.
    Great points.

    My personal approach will be that any money I invest will be low and will not be 'needed' for anything and can either all be lost (hopefully not) or left there indefinitely.

    In my personal budgeting I have identified a number of hobbies that I only spend money on out of habit, rather than actually enjoying them. I spent a lot of time and money on gaming previously, but I don't really spend that much time at it anymore but I still buy a good few games every year as well as online subscriptions. I used to blame a lack of time for why I didn't play much and never completed games, but I have not turned on my PlayStation bar a handful of times during Covid even though I have loads of free time. So the reality is that I'm just not interested in gaming anymore. So I have cancelled my subscriptions and will not be purchasing any new games or consoles. I was surprised when I averaged out how much I was spending on a monthly basis, it was quite a bit.

    So through this and some other items I have identified a few ways that I am basically wasting money. My aim is to spend this money instead on investing. By doing it this way, I am not actually interrupting my normal budget or savings plans, but rather I am just spending some of my "hobby" money on something different - investing. This seems to me, in my personal circumstances, a prudent approach.




  • Right, so lets start learning then.

    Many people on here have recommended the "MyWallStreet" 'Learn' app which is available on your smartphone. This is free, and I found it a useful introduction. So I'd recommend starting there. You can also access it on your desktop (for free) here: https://learn.mywallst.com/

    As for further recommendations on where to go to learn more and to find good resources, I don't really have any I can stand over. As I said, I'm totally new to this too. But I have done a lot of Googling and reading of what other people "suggest" as good websites and resources. Some of these "suggestions" were blatantly paid for advertorials so I ignored them, but I have compiled a series of links that may be useful. However, I do need to stress that I have not used the sites and cannot vouch for their usefulness. The reason why I am posting is that it may save others from spending ages like I have sifting through recommendation posts, threads and articles. My criteria was strict in that all the sites are either free, or have a free version which is still useful. Don't go paying for anything yet! The sites also had to be recommended multiple times over the course of my 'research'.

    Here they are in no particular order:

    https://www.investopedia.com/
    https://docoh.com/
    https://www.wallstreetoasis.com/forums/on-the-job-with-simple-as-my-research-process
    https://finance.yahoo.com/
    https://finviz.com/
    https://www.sec.gov/
    http://openinsider.com/
    https://seekingalpha.com/
    https://www.tradingview.com/
    https://wallmine.com/market/us
    https://whalewisdom.com/
    http://finra-markets.morningstar.com/BondCenter/Default.jsp
    https://www.investing.com/
    https://www.insidertracking.com/
    https://eresearch.fidelity.com/eresearch/markets_sectors/sectors/si_performance.jhtml?tab=siperformance
    https://www.marketwatch.com/
    https://www.stockconsultant.com/consultnow/basicplus.cgi
    http://www.stockta.com/
    https://simplywall.st/about
    https://www.morningstar.com/
    https://hindenburgresearch.com/
    https://stocktwits.com/

    Obviously this list is not exhaustive, and as said some of the sites may be rubbish so hopefully more experienced people here can add and take away. Anyway I hope the above may prove useful to some of you and save you from the chore of sifting through recommendation lists (or at least give you a head start!).

    Personally, I next want to find some books and reliable educational people on Youtube so if anyone has recommendations that would be great.


  • Registered Users Posts: 69 ✭✭ inisfree0504


    Shedite27 wrote: »
    Good thread, on Scenario 2 however, you can't use that loss. You have to hold a stock for more than 30 days to allow it as a loss. It's something Irish Revenue put in a while back to deter people from day trading

    What? :o That has me quite worried considering I submitted my return on some very different assumptions.

    You're saying that if I buy 10 GME shares today and sell them tomorrow (never buying them back) at a loss of €1000, that I cannot use that to offset my overall gains on other stocks?

    My understanding was that the only preclusion was on buying back within the 4 weeks i.e. if I bought 10 GME today, sold tomorrow at a loss of €1000, and then bought back the day after that, I could not the €1000 loss in my calculations of CGT on, say, Bank of Ireland shares.

    Taken from the Revenue handbook:

    "Furthermore, where a loss accrues on the disposal of shares and shares of the same class are acquired within a four week period, the loss is not available for offset against any other gains arising. Instead the loss is only available for set off against any gain that might arise on the subsequent disposal of the shares so acquired in the four week period - this provision does not apply where there is a gain on the disposal."

    Am I misreading this or has the law changed?


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  • What? :o That has me quite worried considering I submitted my return on some very different assumptions.

    You're saying that if I buy 10 GME shares today and sell them tomorrow (never buying them back) at a loss of €1000, that I cannot use that to offset my overall gains on other stocks?

    My understanding was that the only preclusion was on buying back within the 4 weeks i.e. if I bought 10 GME today, sold tomorrow at a loss of €1000, and then bought back the day after that, I could not the €1000 loss in my calculations of CGT on, say, Bank of Ireland shares.

    Taken from the Revenue handbook:

    "Furthermore, where a loss accrues on the disposal of shares and shares of the same class are acquired within a four week period, the loss is not available for offset against any other gains arising. Instead the loss is only available for set off against any gain that might arise on the subsequent disposal of the shares so acquired in the four week period - this provision does not apply where there is a gain on the disposal."

    Am I misreading this or has the law changed?
    Shares sold within four weeks of acquisition

    Shares bought and sold within a four-week period cannot be offset against other gains.
    You can only deduct the loss from a gain made on a subsequent disposal of same-class shares acquired within the four weeks.
    • Example 2 On 1 April 2017, both Jane and Kevin individually bought 3,000 ordinary shares in Abcee Ltd for €3,000.
      They both then sold their shares on 14 April 2017 for €2,000, making a loss of €1,000.
      Jane did not buy any more ordinary shares in Abcee Ltd within four weeks making the loss. She cannot set her loss against any gain she may make.
      Kevin bought more ordinary shares in Abcee Ltd on 21 April 2017. If Kevin makes a gain on the disposal of these shares in the future, he can deduct his loss of €1,000.
    https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/selling-or-disposing-of-shares.aspx




  • What? :o That has me quite worried considering I submitted my return on some very different assumptions.

    You're saying that if I buy 10 GME shares today and sell them tomorrow (never buying them back) at a loss of €1000, that I cannot use that to offset my overall gains on other stocks?

    My understanding was that the only preclusion was on buying back within the 4 weeks i.e. if I bought 10 GME today, sold tomorrow at a loss of €1000, and then bought back the day after that, I could not the €1000 loss in my calculations of CGT on, say, Bank of Ireland shares.

    Taken from the Revenue handbook:

    "Furthermore, where a loss accrues on the disposal of shares and shares of the same class are acquired within a four week period, the loss is not available for offset against any other gains arising. Instead the loss is only available for set off against any gain that might arise on the subsequent disposal of the shares so acquired in the four week period - this provision does not apply where there is a gain on the disposal."

    Am I misreading this or has the law changed?
    What you have there is in the context of FIFO I believe.


  • Registered Users Posts: 8,751 ✭✭✭ Shedite27


    What? :o That has me quite worried considering I submitted my return on some very different assumptions.

    You're saying that if I buy 10 GME shares today and sell them tomorrow (never buying them back) at a loss of €1000, that I cannot use that to offset my overall gains on other stocks?
    I'm not a tax consultant but that's my understanding of it and how I do my returns.
    I calculate all the sells that I've made a loss on, then figure out which were sold within 30 days, and exclude those.


  • Registered Users Posts: 2 Mi1234


    Shares sold within four weeks of acquisition

    Shares bought and sold within a four-week period cannot be offset against other gains.
    You can only deduct the loss from a gain made on a subsequent disposal of same-class shares acquired within the four weeks.


    [*]Example 2 On 1 April 2017, both Jane and Kevin individually bought 3,000 ordinary shares in Abcee Ltd for €3,000.
    They both then sold their shares on 14 April 2017 for €2,000, making a loss of €1,000.
    Jane did not buy any more ordinary shares in Abcee Ltd within four weeks making the loss. She cannot set her loss against any gain she may make.
    Kevin bought more ordinary shares in Abcee Ltd on 21 April 2017. If Kevin makes a gain on the disposal of these shares in the future, he can deduct his loss of €1,000.

    It is correct that the loss on shares sold within 4 weeks is lost unless it is used against the gain made on the same shares. I bought NAKD for €1.90 and the price went down the minute I bought them. I can’t sold them now to recover some money so I can use the loss against other gains. I have to wait at least 4 weeks. I hope to make a profit on other shares above personal exemption of 1270 enough to cover the loss and use the exemption.

    Thanks Ex loco refugii for this thread ... I am a newbie on stocks too


  • Registered Users Posts: 728 ✭✭✭ baron von something


    Using this example, what if I bought gamestop stock at €50 and sold 3 weeks later for €400 and reinvested all into crypto that same day to hold. Does CGT still apply for reinvestment?


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


    Using this example, what if I bought gamestop stock at €50 and sold 3 weeks later for €400 and reinvested all into crypto that same day to hold. Does CGT still apply for reinvestment?

    Yes unfortunately


  • Registered Users Posts: 8,751 ✭✭✭ Shedite27


    Using this example, what if I bought gamestop stock at €50 and sold 3 weeks later for €400 and reinvested all into crypto that same day to hold. Does CGT still apply for reinvestment?

    If you sell for a loss within 4 weeks, you can't use that loss for CGT purposes.

    The CGT is due on the Crypto is completely new transaction


  • Registered Users Posts: 3,209 ✭✭✭ brainboru1104


    Using this example, what if I bought gamestop stock at €50 and sold 3 weeks later for €400 and reinvested all into crypto that same day to hold. Does CGT still apply for reinvestment?

    Your realised gains are €350, if I'm not mistaken.




  • Using this example, what if I bought gamestop stock at €50 and sold 3 weeks later for €400 and reinvested all into crypto that same day to hold. Does CGT still apply for reinvestment?
    Look at it this way, if you sold land and made a Capital Gain, you would not be exempt from paying tax on it just because you went ahead and spent it all on another asset, the future sale of which could possibly result in a Capital Gain.

    From what I have read (this forum and elsewhere) lots of people are making the mistake of thinking that they only need to pay tax when they remove cash from their broker account and are somehow exempt if they sell shares for a profit and immediately reinvest the proceeds. This approach will end in tears. This is why I have put so much emphasis on tax in this thread (more to come).

    In your example you may not need to pay CGT depending on how many shares you bought, you may have profited by less than the exemption of €1,270.00. As I covered in my OP, you would still need to detail it in your return next year.


  • Registered Users Posts: 2,700 ✭✭✭ cronos


    Look at it this way, if you sold land and made a Capital Gain, you would not be exempt from paying tax on it just because you went ahead and spent it all on another asset, the future sale of which could possibly result in a Capital Gain.

    From what I have read (this forum and elsewhere) lots of people are making the mistake of thinking that they only need to pay tax when they remove cash from their broker account and are somehow exempt if they sell shares for a profit and immediately reinvest the proceeds. This approach will end in tears. This is why I have put so much emphasis on tax in this thread (more to come).

    In your example you may not need to pay CGT depending on how many shares you bought, you may have profited by less than the exemption of €1,270.00. As I covered in my OP, you would still need to detail it in your return next year.

    Curious where in the return exactly you put in the bit if you got under 1270 which I did last year? I'll be doing it this year and will be my first time as I never bought or sold a share before last year. The share was in Boohoo on the Frankfurt exchange if it matters which I assume it doesn't and profited around 1000. Also curious if I had 100 euro loss for example how would that be reported. Thanks a mill.


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  • cronos wrote: »
    Curious where in the return exactly you put in the bit if you got under 1270 which I did last year? I'll be doing it this year and will be my first time as I never bought or sold a share before last year. The share was in Boohoo on the Frankfurt exchange if it matters which I assume it doesn't and profited around 1000. Also curious if I had 100 euro loss for example how would that be reported. Thanks a mill.
    There is a video earlier in this thread which covers some of this.

    Basically you need to register for Capital Gains Tax on ROS and you enter the details on Form 11 I think it is. I have not personally done this yet myself, if I ever get to that stage I will go through it in detail. If you do not need to do an Income Return I think the form is CG1.That said, I have been told that it is very straightforward, and the main complication is if you kept poor records and as a result struggle with the sums.

    EDIT: Just to add I am not a tax expert so get proper advice/don't blame me etc.




  • Goal Setting and Risk Appetite

    I thought it might be helpful (both for me and maybe someone else in the same boat) to detail my thoughts on my personal risk appetite and goal setting process. Obviously people have different priorities, circumstances and risk tolerances, the below are my own thoughts. Again, I'm not saying I am doing this correctly so any suggestions etc. are much appreciated.

    Having considered the risks involved, my personal circumstances and risk appetite I have decided that I will only invest what I can afford, with minimal impact, to totally lose. I could 'afford' to lose a lot of money without being out in the street, but my own definition of 'afford' is that should I lose everything I invest it should have no impact on my day to day life or plans. Obviously it would be upsetting, but I don't want to be in a 'having to tighten my belt' situation if everything tanks. This means that the amount of money I put in can have no impact on my day to day life either, i.e. it cannot detract from my normal savings, holidays etc. It also means that any 'goals' I can have from investing cannot be too significant in terms of my future (i.e. I can't be investing with the goal that the money will look after me in retirement). In theory this approach could give license to take great risks with any money I invest, however my approach is that although the loss of the money would not impact me, I would still rather not lose it if at all possible.

    In practical terms, having done the sums, it means I will be starting off with a 'pot' of approx €500 to €1,000 and will be topping it up by €100 on a fortnightly basis. So €2,600 per year. This may increase in line with any salary increases. I am not comfortable with the exposure of using leverage, CFDs, shorting etc. so my investing will consist of buying and holding stocks, increasing my position in each regularly (i.e. 'dollar cost averaging'). I will not be day trading. The low amounts I will be starting with and adding means that I will have to utilise a broker who allows/facilitates fractional shares. I want to keep my tax affairs as straightforward as possible so I will not be investing in ETF's but I am content to manage receipt of dividends.

    What I am thinking is to eventually have a fairly diverse portfolio of between 10 and 20 stocks. The money will be weighted in this order (1 being the most money, 4 the least): (1) Investment Trust PLC type stocks, (2) steady unexciting highcap companies that the trusts do not have large holdings in, (3) more risky/growth potential stock and (4) More speculative stock. The 'speculative' stock is to have a bit of craic with as a hobby but will be treated seriously in that I will only invest in something that I think has a reasonable chance at growth, i.e. not Gamestop!

    My goals are long term, in that in 5/10/15/20 years time I hope to have 'earned' more money than I would have if I just stuck the €217 into a bank account each month and left it. It would be a nice little nest egg to have. I think this is a modest and realistic goal, and there is a fair chance I will 'overachieve' given my prudent approach. I also think it unlikely, if I stick to this approach, that everything would go entirely down the drain.

    As I mentioned I need to use a broker who facilitates fractional shares, I have decided that Trading212 seems to be my best option to start with. They also have a 'virtual' service which I will be practicing on for a minimum of 4 weeks before using any real money.

    Any feedback would be appreciated, especially if you think I am being imprudent or stupid. Obviously it depends on what stocks I pick but I'm not there yet!


  • Registered Users Posts: 3,440 ✭✭✭ endainoz


    Hi OP I'm starting something similar to yourself, but at a lower scale of 50 a month and following the picks on Mywallst. I'm currently using revolut for investing. (Not sure if that's the right thing to do, but that's what I'm using)

    I do like the Mywallst philosophy of seeing it as a long term deal, similar to a pension to (hopefully) watch grow over time.


  • Registered Users Posts: 3,209 ✭✭✭ brainboru1104


    endainoz wrote: »
    Hi OP I'm starting something similar to yourself, but at a lower scale of 50 a month and following the picks on Mywallst. I'm currently using revolut for investing. (Not sure if that's the right thing to do, but that's what I'm using)

    I do like the Mywallst philosophy of seeing it as a long term deal, similar to a pension to (hopefully) watch grow over time.

    I've used both Revolut and Trading 212, and I prefer the latter. It's free to sign up so you can take a gander.




  • endainoz wrote: »
    Hi OP I'm starting something similar to yourself, but at a lower scale of 50 a month and following the picks on Mywallst. I'm currently using revolut for investing. (Not sure if that's the right thing to do, but that's what I'm using)

    I do like the Mywallst philosophy of seeing it as a long term deal, similar to a pension to (hopefully) watch grow over time.
    I will not be using revolut because the interface is quite basic, and it has a very limited number of stocks available. I'm currently on a waitlist for Trading212 which seems to be the best option for us in this part of the world for investing small sums.

    DeGiro seems popular for larger sums, but does not allow fractional shares which you and I would need, and there are also charges.

    Let me know how you get on with MyWallStreet, personally I am reluctant to sign up to any subscription service.


  • Registered Users Posts: 3,659 ✭✭✭ Robson99


    Hi OP
    Starting off here as well.
    Will have €500 per month to invest. Using Trading 212.
    Hope to do the following

    A. Set up a PIE with 15 -20 companies mainly blue chip with a diverse range and possible 10 -15% speculative / more volatile companies Invest €300 per month into this

    B. Set up a PIE with 3-5 Investment trusts in it. SCOTTISH Mortgage, Bankers Inc Trust, AllianzeTech Trust etc. Invest €200 per month into this.

    Maybe this is a daft way of doing things but it saves me looking at things daily and once I'm making a few % above what it would make in the bank then happy days.

    Hope to leave it there for 5 -10 years.


  • Moderators, Business & Finance Moderators Posts: 7,827 Mod ✭✭✭✭ Jim2007



    Goal Setting and Risk Appetite
    .....


    €2,500 - €3,000 over 10 to 20 stocks means going no where, or down. Nobody is good enough to pick 10 or 20 solid stocks every time and even if one or tow of your stocks were to double in it would have little or no impact on your overall performance as the position would be small and the gain swallowed by the losses on the others.


    Accumulate your savings and make a single purchase each year in an trust or similar US vehicle and you are more likely to do well.




  • Jim2007 wrote: »
    €2,500 - €3,000 over 10 to 20 stocks means going no where, or down. Nobody is good enough to pick 10 or 20 solid stocks every time and even if one or tow of your stocks were to double in it would have little or no impact on your overall performance as the position would be small and the gain swallowed by the losses on the others.


    Accumulate your savings and make a single purchase each year in an trust or similar US vehicle and you are more likely to do well.
    The theory was to eventually have up to 20 stocks, I'll be starting off with much less. The money in any case would be weighted towards the trusts, I won't have it evenly divided.

    I get your point though. However I don't see the advantage of making a single purchase each year rather than spreading it out over the length of the year.




  • Robson99 wrote: »
    Hi OP
    Starting off here as well.
    Will have €500 per month to invest. Using Trading 212.
    Hope to do the following

    A. Set up a PIE with 15 -20 companies mainly blue chip with a diverse range and possible 10 -15% speculative / more volatile companies Invest €300 per month into this

    B. Set up a PIE with 3-5 Investment trusts in it. SCOTTISH Mortgage, Bankers Inc Trust, AllianzeTech Trust etc. Invest €200 per month into this.

    Maybe this is a daft way of doing things but it saves me looking at things daily and once I'm making a few % above what it would make in the bank then happy days.

    Hope to leave it there for 5 -10 years.
    This seems to make a decent amount of sense to me, but what do I know!

    One concern I would highlight with the "pie" approach is that if you frequently re-balance it (i.e. it automatically buys/sells to readjust to the % holdings you specify) it may get a little messy in terms of record keeping and reporting tax. When Trading212 are taking sign-ups again I will be messing around with the "virtual" facility they have to see how this works in practice to confirm my opinion but personally I am inclined to avoid the pie function for this reason.

    If you have a few investment trusts I would see little point in separately holding companies who the trusts have large positions in. For example, Scottish Mortgage have a quite large TESLA holding, would not seem to make sense to have a personal holding of any decent size in it too. You would need to check all this on an ongoing basis to not expose yourself too much by having lots of overlap between what the trusts have and what you have personally.

    I have not decided specifically what ITs I will be investing in, but I plan to have them as the core of my portfolio where most of the money goes. I plan to have a balance of growth orientated trusts and more value/conservative ones too.

    In terms of "growth" trusts I have looked at Scottish Mortgage (SMT) but I am leaning towards its stablemate Monks which is more diverse. In particular I have a concern about TESLA and Monks holding is far less than in SMT. 20% of SMTs holdings are also in unlisted companies. SMT also has a quite concentrated "top 10" in terms of its holdings, whereas Monks is much more spread out. But then again SMT has preformed amazingly. But I am leaning towards Monks. Any opinions here much appreciated.

    In terms of a more conservative trust, I have been looking at Capital Gearing, but have not researched a whole lot on this yet.

    As for what number of trusts, how many is optimum? Would 2 be sufficient as a "foundation" to start off with? Last thing you want is lots of trusts who all hold the same investments themselves...


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  • Registered Users Posts: 3,659 ✭✭✭ Robson99


    This seems to make a decent amount of sense to me, but what do I know!

    One concern I would highlight with the "pie" approach is that if you frequently re-balance it (i.e. it automatically buys/sells to readjust to the % holdings you specify) it may get a little messy in terms of record keeping and reporting tax. When Trading212 are taking sign-ups again I will be messing around with the "virtual" facility they have to see how this works in practice to confirm my opinion but personally I am inclined to avoid the pie function for this reason.

    If you have a few investment trusts I would see little point in separately holding companies who the trusts have large positions in. For example, Scottish Mortgage have a quite large TESLA holding, would not seem to make sense to have a personal holding of any decent size in it too. You would need to check all this on an ongoing basis to not expose yourself too much by having lots of overlap between what the trusts have and what you have personally.

    I have not decided specifically what ITs I will be investing in, but I plan to have them as the core of my portfolio where most of the money goes. I plan to have a balance of growth orientated trusts and more value/conservative ones too.

    In terms of "growth" trusts I have looked at Scottish Mortgage (SMT) but I am leaning towards its stablemate Monks which is more diverse. In particular I have a concern about TESLA and Monks holding is far less than in SMT. 20% of SMTs holdings are also in unlisted companies. SMT also has a quite concentrated "top 10" in terms of its holdings, whereas Monks is much more spread out. But then again SMT has preformed amazingly. But I am leaning towards Monks. Any opinions here much appreciated.

    In terms of a more conservative trust, I have been looking at Capital Gearing, but have not researched a whole lot on this yet.

    As for what number of trusts, how many is optimum? Would 2 be sufficient as a "foundation" to start off with? Last thing you want is lots of trusts who all hold the same investments themselves...
    Thanks for the heads up. Doing a bit if research here into the INV Trusts.


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