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Portfolio Plan and understanding

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  • 20-12-2020 1:46pm
    #1
    Maxxey
    Registered Users Posts: 25 ✭


    Hi there I wanted to sanity check my portfolio and the actions to get it there.

    I have around 80k house equity. ~70% LTV
    And around 100-120k cash.

    Zero dependants so I'd like high risk high reward investments.

    Idea was to utilise cash by:

    80k single stocks at ~5k euro per stock = 16 picks

    20k crypto ETF

    That way I have a 4:4:1 house/stocks/crypto portfolio.
    Around: 44% : 44% : 11%

    I was going to use Degiro in January for the investment of 100k in stocks+crypto.

    As I have a home and everything I need at a young age I am going to longterm hold the investments until I feel any of those picks are overvalued.

    Correct my understanding:

    1. As I use Degiro and would be purchasing around 5k worth of stocks per transaction the one off fees are low.
    1b. Degiro yearly fees are also low.
    1c. The money is protected by Degiro up to 100k - is that in cash form or in stocks too?

    2. The single stocks are subject to CGT but also subject to capital loss offsets on any gains as some of those stocks will be losers.
    2b. The crypto EFT is subject to 41% tax rather than 33% plus as it is an EFT it is not permitted to use any of its capital losses to offset capital gains - right?


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    #2
    cronos
    Registered Users Posts: 2,717 ✭✭✭cronos


    Maxxey wrote: »
    Hi there I wanted to sanity check my portfolio and the actions to get it there.

    I have around 80k house equity. ~70% LTV
    And around 100-120k cash.

    Zero dependants so I'd like high risk high reward investments.

    Idea was to utilise cash by:

    80k single stocks at ~5k euro per stock = 16 picks

    20k crypto ETF

    That way I have a 4:4:1 house/stocks/crypto portfolio.
    Around: 44% : 44% : 11%

    I was going to use Degiro in January for the investment of 100k in stocks+crypto.

    As I have a home and everything I need at a young age I am going to longterm hold the investments until I feel any of those picks are overvalued.

    Correct my understanding:

    1. As I use Degiro and would be purchasing around 5k worth of stocks per transaction the one off fees are low.
    1b. Degiro yearly fees are also low.
    1c. The money is protected by Degiro up to 100k - is that in cash form or in stocks too?

    2. The single stocks are subject to CGT but also subject to capital loss offsets on any gains as some of those stocks will be losers.
    2b. The crypto EFT is subject to 41% tax rather than 33% plus as it is an EFT it is not permitted to use any of its capital losses to offset capital gains - right?

    Personally I think your crypto confidence is a bit high. Also worth keeping in mind that you are guaranteed 3% savings by just paying down your morgage.

    I hear Paypal have offered fee free crypto trading till the end of the year. I'd consider that myself above a crypto EFT.

    Do let us know what shares you pick. I'd be curious.


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    #3
    Nonoperational
    Registered Users Posts: 7,401 ✭✭✭Nonoperational


    Very high crypto percentage coming in at essentially an all time high. Might work but its gambling.

    Single stock picks are all well and good in such a bull market. But obviously let you open to massive drops.

    Personally what I have done is focused the core of my portfolio on cheap index ETFs. I’ve added a relatively small percentage of stock picks and have a tiny amount of crypto. Whether to have gold or bonds in your portfolio is another question.

    Honestly at the moment the market is so crazy you cant lose. But you need a strategy for when things go belly up. Be that holding long and forgetting about it or being a bit more dynamic.


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    #4
    Jim2007
    Moderators, Business & Finance Moderators Posts: 10,028 Mod ✭✭✭✭Jim2007


    That way I have a 4:4:1 house/stocks/crypto portfolio.
    Around: 44% : 44% : 11%

    Any which way you look at it this is a very high risk portfolio. Generally speaking portfolios more that 6/7% in property and other high risk asset classes is considered to constitute an high risk portfolio, you've go 55% or 20% depending on of if you take your house into consideration, for most a house is not an investment - you have to live somewhere.

    A currency, even a digital one, is not an investment, your trading in a currency whose value is entirely dependent on perception, there is not intrinsic value.

    And when it comes to individual stocks, do you really have the skills, the knowledge, the mentality and above all time to find 16 good stocks???? It would take me about 2 weeks effort per month for about 18 months to find 16 good stocks. And even then may be 12 will be worth while.

    My advice would be to leave your money where it is and come up with a much better strategy.


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    #5
    Timmaay
    Registered Users Posts: 11,394 ✭✭✭✭Timmaay


    If you do go into the stockmarket you should definitely dollar average into any stocks and any crypto also, lets say you lump your full amount into the market early Jan, and then we get a strong pullback in Feb, you could see yourself immediately at a 30% loss. Instead you'd be alot better off put that cash in across a year or so, ideally during pullbacks etc.


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    #6
    namloc1980
    Registered Users Posts: 18,074 ✭✭✭✭namloc1980


    If you are going to buy crypto then buy actual cryptocurrency that you own, rather than an ETF. As discussed on other threads here the taxation of ETFs is a total minefield and you really need to know what you're getting into with them.

    As mentioned your proposed strategy is very high risk. Personally I'd be paying down the mortgage and looking at averaging in to some sort of investment trust or something. If you want to get into stocks you need to know what you want long term: are looking to get into the next Tesla etc this is high risk but also potentially high rewards and takes a lot of time to research, or looking to buy into blue chip dividend stocks for income at the expense of large long term capital gains.


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