Investment options - Medium to high risk

OEP

I'm wondering what are the options for medium to high risk investments over a long time horizon. Probably 10k initially but this will be added to over time.

I'm knowledgeable about risks and tax implications with various investments so don't need advice there. I have bought individual stocks for the last 6 or so years, more out of curiosity and interest in financial markets in general. But as we all know stock picking isn't a recommended way to invest unless you have the necessary knowledge, time and skills to do it. ETF tax treatment rules them out too, so I guess that leaves funds. If we take an S&P tracker as the baseline for risk/return, what other options are there? What funds are there that carry higher risk, without being too stupid? Take it that I'd like to try and "beat" the S&P, whilst accepting that this is high risk. The money I'll be using can be lost

SmokyMo

High risk over long time horizon? Those two do not add up together. You will be left with no money in the worst case and best case you ll break even.

OEP

The long time horizon allows you to ride out volatility. The markets always increase over time...

Shedite27

https://www.boards.ie/discussion/2058233896/investment-options-medium-to-high-risk

I take it you're saying you want all stocks anyway, which would be high risk in most financial advisor models (medium risk would include some bonds, property etc).

Honestly, for the peace and mind, you're probably best off getting an S&P tracker, S&P has returned 20-30% per annum the past few years, so it's tough to beat.

If you want something more adventurous, look for the thread on Investment trusts, Monks and Scottish Mortgage seem to be the most popular on here.

SpiderSpider

https://www.boards.ie/discussion/comment/118685956#Comment_118685956

what S&P tracker would you recommend ?

Shedite27

https://www.boards.ie/discussion/comment/118688562#Comment_118688562

Vanguard is the most established and cheapest, basically mirrors the S&P return. Degiro and most platforms have them.

silver2020

sometimes for a sum of that size its easier to put it into a managed fund.

I put a similar amount into 2 "college funds" for my godchildren back in 2018, both were in Prisma 4 & Prisma 5 end of Dec and now are in prisma 3 and they are at almost €17,000 each now.

I keep a cursory eye on the prisma funds as most of my pension is in them, and do the odd change in allocations which can be done without penalty.

It won't give you the biggest return, but its a great balance of risk/reward

OEP

https://www.boards.ie/discussion/comment/118685956#Comment_118685956

Thanks, I'll look into that thread out of interest. I'll probably end up putting into the vanguard S&P.

TalleyRand83

Looking at DeGiro and the endless amount of etf's & providers I must admit I don't think I have a full understanding of the format.

Each provider like Blackrock, Fidelity, JP Morgan all have dozens of different offerings (I get they each target loads of different markets) but are the duplicated offerings and just in competition with each other or does each particular S&P product for example have slightly unique twists per provider?

And I know these products are not really aimed at retail investor like me but have an itch on anything I don't understand fully

funkey_monkey

https://www.boards.ie/discussion/comment/118689654#Comment_118689654

Would their S&P be better than the Lifestrategy 100 fund?

DataDude

https://www.boards.ie/discussion/comment/118690543#Comment_118690543

Just be careful. As an Irish citizen ETFs are essentially outlawed through absolutely mental tax treatment. Lots of talk of it on here and other forums if you google it.

Sadly we have no way of getting access to easy diversification without paying painfully management charges. The only other option is trying to construct your own portfolio, which is difficult/time consuming and can rack up transaction fees.

SpiderSpider

https://www.boards.ie/discussion/comment/118690969#Comment_118690969

is there any reason why we're hammered with tax for something like this?

Seems ridiculous

OEP

https://www.boards.ie/discussion/comment/118690969#Comment_118690969

Yea I'm aware of the ETF tax treatment and I'm not considering them.

Shedite27

https://www.boards.ie/discussion/comment/118690826#Comment_118690826

Yeah essentially a Blackrock S&P500 ETF and Vangard S&P500 ETF are doing the same thing, getting the same return for the cheapest money.

They all have other bespoke funds then targeting certain sector of the markets. They hope you'll put 50% in their S&P tracker, then 50% in their more expensive funds (targeting different markets, or certain sectors).

Shedite27

https://www.boards.ie/discussion/comment/118690938#Comment_118690938

I'm not familiar with Lifestrategy but it sounds like they type of fund that's 100% Stocks when you're 30 years to retirement (or whatever event you're saving towards), then 75% stocks 20 years to retirement etc. Usually more suitable if you've a big time goal in mind. I don't use them FWIW.

Shedite27

https://www.boards.ie/discussion/comment/118691330#Comment_118691330

Carryover from the time we were bankrupt in 2010 ish. Loads of bigwigs had millions saved in ETF's and the government upped the tax rate on them. It's an easy tax for governments to bring in as it's only taxing the people who have savings (ie not the worse off). It's 42% OF THE PROFITS so the way markets are returning these days, you're still 10+% return the past few years after tax.

Deemed Disposal is the other one a lot of people don't like, this just means you're paying the tax every 8 years, rather than when you sell if you were to be holding longer than that. I'm not convinced that's a huge issue myself.

DataDude

https://www.boards.ie/discussion/comment/118691330#Comment_118691330

Absolute ineptitude or extremely cynical behaviour by our government to force us all to pay irish life 75 bps. Not sure which. Wrote to a few TDs on it on how public policy is forcing people out of sensible diversified investments and makes people pick stocks. Got some unrelated rubbish back about not wanting to give tax breaks to investment funds??

https://www.boards.ie/discussion/comment/118691344#Comment_118691344

If you ruled out an ETF, how do you intend on getting access to an S&P tracker? This would be the silver bullet for me but I can't find anything that would allow me to do so. All the Investment Trusts are actively managed and have stupid management fees. Putting a big chunk in Berkshire Hathaway doesn't seem like the craziest idea as it generally tracks reasonably well (although not perfectly of course).

DataDude

https://www.boards.ie/discussion/comment/118691629#Comment_118691629

It's not either of these that are the issue. Although the operational difficulty of calculating tax every month (if you invest every month) after 8 years is a pain.

The thing that makes them unusable is the fact you can't offset gains and losses, even within the same fund. So if you go along putting in a few 100 quid every month for a decade, and then decide to sell everything. You'll pay tax on every transaction that's profitable and get no offset for every transaction that's loss making. It can work for a once in a lifetime single lump sum investment, but if you have any intention of investing on a regular basis, you can't use them.

OEP

https://www.boards.ie/discussion/comment/118691829#Comment_118691829

To be honest I haven't looked into the fees of any funds or Investment Trusts but it does look like a Vanguard S&P fund would end up cheaper than the extra 8% tax from an ETF - obviously that's dependent on profits.

DataDude

https://www.boards.ie/discussion/comment/118692139#Comment_118692139

What's the name of that Vanguard S&P Fund and how are you accessing it? Any links? I thought Vanguard structured most of their products as an ETF.

Shedite27

https://www.boards.ie/discussion/comment/118692164#Comment_118692164

Lots of S&P ETF's in Europe markets, that are permitted for Irish investors.

It's only the S&P ETF's on US markets we're banned from

Shedite27

https://www.boards.ie/discussion/comment/118691870#Comment_118691870

Just from a quick scan, there's only one ever 8-year period where the S&P has been down, so I don't think that happens much. Of course, cashing out early can be different. Shouldn't be too many losses for a long term S&P investor.

SpiderSpider

https://www.boards.ie/discussion/comment/118691829#Comment_118691829

lol they don't want to give tax breaks to investment funds ......

SpiderSpider

https://www.boards.ie/discussion/comment/118693565#Comment_118693565

I know this is probably a bit of a pain but can you give me the name of a few so i can look into them. Want to get going on a few asap

JPup

Over the very long term, historically small caps and value stocks have outperformed so that would be my starting point. No guarantee they outperform in the future of course. Emerging markets have the potential to outperform for long periods as do certain sectors such as IT.

Private equity is another place to look. It has outperformed fairly consistently over the past 40 years but comes with high fees. It can be accessed through the public markets via the likes of HgCapital Trust (single manager) or the Standard Life Private Equity Trust (multi manager). You can google to find some peers.

DataDude

https://www.boards.ie/discussion/comment/118693565#Comment_118693565

We can invest in them, but they’re financial suicide because of the tax treatment!

Shedite27

https://www.boards.ie/discussion/comment/118694487#Comment_118694487

If you're on Degiro, go to PRoducts on the left, then ETF's, Add Criteria Provider = "Vangard" and "Market = Amsterdm", Asset = "Shares", and you'll get a whole list of them depending what index you want to track

Vanguard S&P 500 UCITS ETF USD - that's the S&P500. 0.07% annual charge is the lowest you'll get.

Shedite27

https://www.boards.ie/discussion/comment/118695429#Comment_118695429

Can we? I thought Irish people weren't allowed in US listed ETF's (as opposed to Europe-listed ETF's that are based on US index)

DataDude

https://www.boards.ie/discussion/comment/118697816#Comment_118697816

Sorry no, I was referring to EU ETFS - can buy, but definitely shouldn’t.

TalleyRand83

What about buying the actual Blackrock stock that trades on the NYSE? Does that follow their (collective) ETF graphs I wonder?