Beginning to Invest - All questions go here please

HelloYoungBoy · 10-02-2021 06:54PM

VonLuck wrote: »

Wouldn't dollar cost averaging only apply the opposite way by investing the money when it's available? This is almost the reverse. You have the money but are drip feeding it into the market i.e. purposefully timing when you invest.

The lump sum would just be sitting in a deposit account making almost nothing.

I know that there's no right answer, but would be good to get people's thoughts all the same.

No it wouldn't. We are already committing to invest the funds in the future so its not timing the market. When the money is "available" is irrelevant to dollar cost averaging. The whole premise is that you invest at regular intervals regardless of the underlying conditions.

Timing the market would be holding your lump sum and then investing it all when you think the market has dipped or there is a downturn. There is a clear difference here between dollar cost averaging

BOHtox · 10-02-2021 07:22PM

What do we think of the €1,270.00 CGT allowance?

I think it's paltry. Do you think it will ever change?

I live in Canada and here you can deposit 6k CAD a year in to a TFSA (tax free savings accounts) (No lifetime limit) and all cap gains are tax free if you stick to that contribution limit. So if your account realises 1k, 100k or 1m profit in a year there is no CGT once the limit is kept to. There is CGT on house disposal etc.

The UK has a CGT allowance of £12,300. (Over €14,000, 10 times more)

I'm not saying CGT is the main reason I don't want to come home (housing is cheaper here, healthcare is free and transport is amazing) but the fact my capital gains are so heavily taxed is definitely on the list of reasons.

Over here TFSAs are a great source of wealth generation for the middle and even working class who can put away 100 or 200 dollars a paycheck over the course of the year (usually paid bi-weekly here) and can get some handsome cap gains tax free.

Lots of people invest here, it's a great culture. Whether it's ETFs or day trading or HODLers on long term equities. Really drives up wealth generation.

I understand taxes need to be collected in Ireland but if you allow a few capital gains, people have more money to eat out, get house extensions etc. Just more disposable cash and makes Ireland a more attractive place to live and you might stop some of the brain drain as there's hundreds of thousands of Irish around the world who have emigrated.

I'll certainly be writing to a few, what would be, local representatives at home asking them to increase the limit. I certainly think a 10k allowance is both modest enough to allow personal investing but also not too paltry that it discourages investing.

Has there ever been anything said about this limit changing?

Shedite27 · 10-02-2021 09:45PM

VonLuck wrote: »

Wouldn't dollar cost averaging only apply the opposite way by investing the money when it's available? This is almost the reverse. You have the money but are drip feeding it into the market i.e. purposefully timing when you invest.

The lump sum would just be sitting in a deposit account making almost nothing.

I know that there's no right answer, but would be good to get people's thoughts all the same.

No, DCA is exactly for the situation you describe (large amount to go in). Investing as it becomes available is just savings, that's a limit of how much money you have rather than a strategy.

If you buy the lump sum today, you run the risk there'll be a crash tomorrow. If you DCA in over 6 months, you've divided the risk that "there'll be a crach tomorrow" by 6.

10-02-2021 10:18PM

BOHtox wrote: »

What do we think of the €1,270.00 CGT allowance?

I think it's paltry. Do you think it will ever change?

I live in Canada and here you can deposit 6k CAD a year in to a TFSA (tax free savings accounts) (No lifetime limit) and all cap gains are tax free if you stick to that contribution limit. So if your account realises 1k, 100k or 1m profit in a year there is no CGT once the limit is kept to. There is CGT on house disposal etc.

The UK has a CGT allowance of £12,300. (Over €14,000, 10 times more)

I'm not saying CGT is the main reason I don't want to come home (housing is cheaper here, healthcare is free and transport is amazing) but the fact my capital gains are so heavily taxed is definitely on the list of reasons.

Over here TFSAs are a great source of wealth generation for the middle and even working class who can put away 100 or 200 dollars a paycheck over the course of the year (usually paid bi-weekly here) and can get some handsome cap gains tax free.

Lots of people invest here, it's a great culture. Whether it's ETFs or day trading or HODLers on long term equities. Really drives up wealth generation.

I understand taxes need to be collected in Ireland but if you allow a few capital gains, people have more money to eat out, get house extensions etc. Just more disposable cash and makes Ireland a more attractive place to live and you might stop some of the brain drain as there's hundreds of thousands of Irish around the world who have emigrated.

I'll certainly be writing to a few, what would be, local representatives at home asking them to increase the limit. I certainly think a 10k allowance is both modest enough to allow personal investing but also not too paltry that it discourages investing.

Has there ever been anything said about this limit changing?

My opinion might prove controversial on this forum, but I do not consider 33% excessive, or the 1270 allowance too low. Although the ETF tax situation is a mess. There are generous tax incentives to investing in a pension arrangement and these need to be taken into account. If there were no pension arrangements like this I would agree with you.

There are also numerous exemptions and relief to CGT such as those in relation to business, farming, entrepreneur relief etc.

My main objection to removing CGT is that to do so it would facilitate further tax avoidance by the wealthy via framing what is really income, as a Capital Gain. This would be in addition to the €1 billion hole abolishing CGT would leave.

There is a problem with tax in Ireland, and it is its wholesale avoidance by large businesses.

If you want to help and encourage "wealth generation" we should encourage people who actually do this, namely workers (not gamblers/day traders), by reducing the higher rate of income tax which sometimes feels borderline punitive.

Taylor365 · 10-02-2021 10:23PM

BOHtox wrote: »

What do we think of the €1,270.00 CGT allowance?

I think it's paltry. Do you think it will ever change?

I live in Canada and here you can deposit 6k CAD a year in to a TFSA (tax free savings accounts) (No lifetime limit) and all cap gains are tax free if you stick to that contribution limit. So if your account realises 1k, 100k or 1m profit in a year there is no CGT once the limit is kept to. There is CGT on house disposal etc.

The UK has a CGT allowance of £12,300. (Over €14,000, 10 times more)

I'm not saying CGT is the main reason I don't want to come home (housing is cheaper here, healthcare is free and transport is amazing) but the fact my capital gains are so heavily taxed is definitely on the list of reasons.

Over here TFSAs are a great source of wealth generation for the middle and even working class who can put away 100 or 200 dollars a paycheck over the course of the year (usually paid bi-weekly here) and can get some handsome cap gains tax free.

Lots of people invest here, it's a great culture. Whether it's ETFs or day trading or HODLers on long term equities. Really drives up wealth generation.

I understand taxes need to be collected in Ireland but if you allow a few capital gains, people have more money to eat out, get house extensions etc. Just more disposable cash and makes Ireland a more attractive place to live and you might stop some of the brain drain as there's hundreds of thousands of Irish around the world who have emigrated.

I'll certainly be writing to a few, what would be, local representatives at home asking them to increase the limit. I certainly think a 10k allowance is both modest enough to allow personal investing but also not too paltry that it discourages investing.

Has there ever been anything said about this limit changing?

Been discussed to death, will never change, live in Fermanagh and reap the rewards, yada yada.

Seen has helping the 1%. We're controlled by monkeys!

mrunsure · 10-02-2021 11:15PM

BOHtox wrote: »

The UK has a CGT allowance of £12,300. (Over €14,000, 10 times more)

And most people don't even need to worry about working out their CGT because of the £20,000 annual ISA limit. Many people have invested the maximum allowed into ISAs since they came in about 20 years ago (and there were PEPs before that), and many of those are now looking at portfolios worth £500K if not £1M, tax free for both capital and income.

Shedite27 · 11-02-2021 09:57AM

How does the Uk PEnsion allowance compare to ours?

mrunsure · 11-02-2021 12:52PM

Shedite27 wrote: »

How does the Uk PEnsion allowance compare to ours?

You are allowed to contribute up to £40,000 a year, with a lifetime limit of just over £1 million.

Bob Harris · 12-02-2021 11:52AM

For people wondering about the tax implications of buying/selling shares then have a look here https://www.wolfofharcourtstreet.com/

Robson99 · 12-02-2021 04:45PM

Could someone send me a referral for T212

Robson99 · 12-02-2021 06:10PM

Tks. Sorted

HillCloudHop · 12-02-2021 06:11PM

Is anyone having luck registering with Trading212 recently? I keep getting the email waiting list.

massdebater · 12-02-2021 06:19PM

BOHtox wrote: »

What do we think of the €1,270.00 CGT allowance?

I think it's paltry. Do you think it will ever change?

I live in Canada and here you can deposit 6k CAD a year in to a TFSA (tax free savings accounts) (No lifetime limit) and all cap gains are tax free if you stick to that contribution limit. So if your account realises 1k, 100k or 1m profit in a year there is no CGT once the limit is kept to. There is CGT on house disposal etc.

The UK has a CGT allowance of £12,300. (Over €14,000, 10 times more)

I'm not saying CGT is the main reason I don't want to come home (housing is cheaper here, healthcare is free and transport is amazing) but the fact my capital gains are so heavily taxed is definitely on the list of reasons.

Over here TFSAs are a great source of wealth generation for the middle and even working class who can put away 100 or 200 dollars a paycheck over the course of the year (usually paid bi-weekly here) and can get some handsome cap gains tax free.

Lots of people invest here, it's a great culture. Whether it's ETFs or day trading or HODLers on long term equities. Really drives up wealth generation.

I understand taxes need to be collected in Ireland but if you allow a few capital gains, people have more money to eat out, get house extensions etc. Just more disposable cash and makes Ireland a more attractive place to live and you might stop some of the brain drain as there's hundreds of thousands of Irish around the world who have emigrated.

I'll certainly be writing to a few, what would be, local representatives at home asking them to increase the limit. I certainly think a 10k allowance is both modest enough to allow personal investing but also not too paltry that it discourages investing.

Has there ever been anything said about this limit changing?

I live in Canada too and the generous tax treatment for investments here is one of the main deterrents for moving back to Ireland. 6k tax free every year, accessible any time, and only 50% of gains gets added to your income tax so if you're in a low bracket, you pay very little. And no exit tax on ETFs.

Wish ireland would come out with something similar but tax on investments is terrible, pension is ok but you can't access it til you're 60+. The irish system really wants everyone to work until their 60s it seems, which is unfortunate

Taylor365 · 12-02-2021 07:25PM

massdebater wrote: »

I live in Canada too and the generous tax treatment for investments here is one of the main deterrents for moving back to Ireland. 6k tax free every year, accessible any time, and only 50% of gains gets added to your income tax so if you're in a low bracket, you pay very little. And no exit tax on ETFs.

Wish ireland would come out with something similar but tax on investments is terrible, pension is ok but you can't access it til you're 60+. The irish system really wants everyone to work until their 60s it seems, which is unfortunate

The Irish system wants everyone buying property.

tusk · 13-02-2021 06:21PM

HillCloudHop wrote: »

Is anyone having luck registering with Trading212 recently? I keep getting the email waiting list.

Nope. Waiting ages now

VonLuck · 13-02-2021 08:04PM

I'm looking for some guidance as I'm getting lost in a lot of information that I've been taking in over the past few months. I'm struggling to get off the starting block because of indecision, trying to avoid making the wrong first step. I know there's no right answer, but if you were starting off, how would you answer each of the below?

Is it best to focus on index funds and mutual funds initially and avoid individual shares?
If so, should you invest in multiple funds from the get go for diversification?
Is there much benefit in investing into multiple index funds? I imagine you would need to branch into different countries to be diversified e.g. one fund for the S&P 500 and another for the Nikkei 225.
How large should your portfolio be from the start? I know some people say to aim for around 20 as time goes on, but initially is it better to put larger amounts into 1 or 2 funds or else maybe smaller amounts into a mixture of 7 or 8 funds and individual shares?

Shedite27 · 13-02-2021 08:51PM

VonLuck wrote: »

I'm looking for some guidance as I'm getting lost in a lot of information that I've been taking in over the past few months. I'm struggling to get off the starting block because of indecision, trying to avoid making the wrong first step. I know there's no right answer, but if you were starting off, how would you answer each of the below?
Is it best to focus on index funds and mutual funds initially and avoid individual shares?

If so, should you invest in multiple funds from the get go for diversification?

Is there much benefit in investing into multiple index funds? I imagine you would need to branch into different countries to be diversified e.g. one fund for the S&P 500 and another for the Nikkei 225.

How large should your portfolio be from the start? I know some people say to aim for around 20 as time goes on, but initially is it better to put larger amounts into 1 or 2 funds or else maybe smaller amounts into a mixture of 7 or 8 funds and individual shares?

Firstly, you'll always make mistakes when you start off. Everyone does. No matter how much you read, you'll only really learn by your own mistakes. It's why I always advise you play with a 10%-20% of your planned investment for the first few months. That way, even if you invest $2k and lost half, and have another $8k to go when you've learnt how this works, you're only down 10%.

Then, I always ask what your goal is.
1. Is this your only money for your retirement? If you have a pension fund, chances are that's ina "safe" index fund. So most people probably have a lot invested in index funds as it is. So I'd pass on index funds.
2. Is this money needed for a deposit for a house in 2/3/5 years, if so you probably want to keep it safer, I always prefer shares, but maybe you stick to Google, Amazon, Apple etc.
3. If neither of the above, if this is your "I want to retire early, college fund for the kids, buy an island" fund, then you should be looking to individual stocks, probably 20ish sounds right.

I'm not gone on index funds, because they mean you buy the crap as well as the good stocks. We know what the best 100 stocks in the S&P500 are, why not keep within them rather than being dragged back to the average by the worse 400.

With regards to the number of stocks, there's no right answer. I always have had about 20-30, but about 10 of those are moonshots (small companies than might multiply or go to zero). I find the key is to try to keep 50% of your money in the 7/8 stocks that you love.

I find that way, any one stock going bankrupt won't ruin you, any one stock striking gold should make a good impact to your overall value.

So in summary
- I prefer 20/25 individual stocks
- Only use 10-15% of your planned funds in the first 2 months

VonLuck · 13-02-2021 09:45PM

Shedite27 wrote: »

3. If neither of the above, if this is your "I want to retire early, college fund for the kids, buy an island" fund, then you should be looking to individual stocks, probably 20ish sounds right.

This is me right now.

Shedite27 wrote: »

I'm not gone on index funds, because they mean you buy the crap as well as the good stocks. We know what the best 100 stocks in the S&P500 are, why not keep within them rather than being dragged back to the average by the worse 400.

It's a fair point regarding index funds as I have my own pension fund separate to this. I am still considering mutual funds and trusts at the moment as I feel they will give me good diversification with the prospect of higher returns than the indices.

Shedite27 wrote: »

With regards to the number of stocks, there's no right answer. I always have had about 20-30, but about 10 of those are moonshots (small companies than might multiply or go to zero). I find the key is to try to keep 50% of your money in the 7/8 stocks that you love.

I find that way, any one stock going bankrupt won't ruin you, any one stock striking gold should make a good impact to your overall value.

So in summary
- I prefer 20/25 individual stocks
- Only use 10-15% of your planned funds in the first 2 months

That's a useful indication of where to start, thanks. Another question for you - how would you actually build up to the 20/25 individual stocks? Would you do this over the initial 2 months or do you just start off with purchasing a single stock and build up a portfolio slowly over months (years?) after doing thorough research?

I feel like going with just the one to start with will leave me quite exposed.

Bob Harris · 13-02-2021 09:58PM

VonLuck wrote: »

T

I feel like going with just the one to start with will leave me quite exposed.

Do not out it all on one company unless you're starting with a very small amount i.e. If you have 500€ I wouldn't be putting it in 10 different companies. Two at most and then build on that.

if you had the money then I wouldn't buy 20-25 companies within two months. Chances of getting the timing anywhere near right on them all is zero.
You'll always hear to be patient once you hold a company as it's price will fluctuate.
Be patient getting in too. Make sure you know what you're getting into and once you're happy that you know where a price has been and you're confident you know where it's going, then scale in.

Underground · 13-02-2021 11:46PM

Let me ask a potentially stupid question.

I've been looking at the gamblers on WSB and they mainly trade options.

Here's what I don't get. If I buy a call on a stock and it's in the money, deep in the money, I would exercise the option.

The WSB guys sell the option in the above scenario, rather than exercise it.

If I sell an in the money call like the WSB crowd do, aren't I on the hook for it now in the event that the person I just sold it to wants to exercise it? (ie assignment risk)

Shedite27 · 14-02-2021 09:28AM

Underground wrote: »

Let me ask a potentially stupid question.

I've been looking at the gamblers on WSB and they mainly trade options.

Here's what I don't get. If I buy a call on a stock and it's in the money, deep in the money, I would exercise the option.

The WSB guys sell the option in the above scenario, rather than exercise it.

If I sell an in the money call like the WSB crowd do, aren't I on the hook for it now in the event that the person I just sold it to wants to exercise it? (ie assignment risk)

2 side to look at here.

1. The person who buys it, do they ever actually intend to buy the stocks? Some of the WSB crew who you heard had options that went up 10000%, well they now have the option to buy say 5000 Gamestop shares, even if the striek price was $30, can they really afford to buy $30,000 worth of shares, even if it's just for a few minutes? Much easier to just sell the option for the profit without touching the share.

2. In answer to your last point, yes you could be on the hook for providing the shares. So if you are selling options, it's very risky to do it unless you actually own that amount of shares (ie can provide them if neccessary).

Shedite27 · 14-02-2021 09:37AM

VonLuck wrote: »

It's a fair point regarding index funds as I have my own pension fund separate to this. I am still considering mutual funds and trusts at the moment as I feel they will give me good diversification with the prospect of higher returns than the indices.

That's fair enough. Are you looking at Index funds via Aviva/Zurich etc or going direct? Make sure you understand the charges on any of those. There's a Government Levy, Zurich Fee and Fund Manager Fee to be dedcuted from your fund.

VonLuck wrote: »

That's a useful indication of where to start, thanks. Another question for you - how would you actually build up to the 20/25 individual stocks? Would you do this over the initial 2 months or do you just start off with purchasing a single stock and build up a portfolio slowly over months (years?) after doing thorough research?

I feel like going with just the one to start with will leave me quite exposed.

Yeah I'd try to start with 5/6 at least. But again, that kinda depends on how much you have. A lot of companies have a share price of $100-$300 so if you're using Degiro where you can't buy fractional shares, you probably need to start with $2k. Not sure where that fits with your situation.

Below are 2 posts I put up recently, 1 with Stocks I like currently, and 1 with stocks that a very good stock picker put up recently. Might give ya some ideas.

Shedite27 wrote: »

My "buy and forget" shares for now would be:
Teledoc, Trade Desk, Crowdstrike, Pinterest, Twilio, Spotify, Square, Docusign

Second tier of shares that I'd be surprised if I sell in the next 2 years are:
Sea, Lemonade, Peloton, Fastly, StoneCo, Paypal, Shopify, Datadog, Veeva, Redfin

Shedite27 wrote: »

I mentioned Chris Perruna's annual watchlist and it just got released today. He's an amateur stockpicker, who just seems to like the game, but knows how to spot trends and companies. His watchlist of 15 stocks are below, aligns very closely to my own portfolio and thinking, tech based growth stocks (stocks in bold are the ones I own)

His full analysis is worth 10 minutes of your time

Teledoc - TDOC

Pinterest - PINS

Crowdstrike - CRWD

Fastly - FSLY

Cloudflare - NET

Digital Turbine - APPS

Datadog - DDOG

Unity - U

Peloton - PTON

Roku - ROKU

Zoom Video - ZM

Docusign - DOCU

Salesforce - CRM

Uber - UBER

AirBnb - ABNB

Big caveat that you'll see in the blog is that he believes many of these are very extended currently, so he suggests these for your watchlist rather than immediate purchase.

Bob Harris · 14-02-2021 09:39AM

Underground wrote: »

Let me ask a potentially stupid question.

I've been looking at the gamblers on WSB and they mainly trade options.

Here's what I don't get. If I buy a call on a stock and it's in the money, deep in the money, I would exercise the option.

The WSB guys sell the option in the above scenario, rather than exercise it.

If I sell an in the money call like the WSB crowd do, aren't I on the hook for it now in the event that the person I just sold it to wants to exercise it? (ie assignment risk)

Buying call options means you dont have to put up all the cash up front just the option premium.
So if you're deep in the money the value of the option will reflect the underlying share price so sell it and take the profits. Why would you take delivery of the shares when that is what you wanted to avoid in the first place?

A call is the right to buy not the obligation. The market maker who sold the calls originally would prefer its not exercised as it saves them having to buy the shares and deliver them to you though, as the expiration date gets closer they will have to start buying in case the option holder wants to take delivery. In the case of game that buying along with shorts trying to cover and people buying long caused the price to go up massively.

VonLuck · 14-02-2021 03:26PM

Shedite27 wrote: »

That's fair enough. Are you looking at Index funds via Aviva/Zurich etc or going direct? Make sure you understand the charges on any of those. There's a Government Levy, Zurich Fee and Fund Manager Fee to be dedcuted from your fund.

I'm actually looking at trusts at the moment. Seems to be a more attractive investment.

Shedite27 wrote: »

Yeah I'd try to start with 5/6 at least. But again, that kinda depends on how much you have. A lot of companies have a share price of $100-$300 so if you're using Degiro where you can't buy fractional shares, you probably need to start with $2k. Not sure where that fits with your situation.

Below are 2 posts I put up recently, 1 with Stocks I like currently, and 1 with stocks that a very good stock picker put up recently. Might give ya some ideas.

I was thinking 5 or 6 would be a good starting point myself, but don't want to just pick 6 stocks for the sake of it. I appreciate the suggested companies but obviously will have to do my own research into any of them.

Would you advise against blue chip companies to start off with? I know the return is likely to be lower, but at least you have a solid base and can branch off with riskier stocks whilst building up to 20 or so in your portfolio.

JohnK · 14-02-2021 04:19PM

Bob Harris wrote: »

Buying call options means you dont have to put up all the cash up front just the option premium.
So if you're deep in the money the value of the option will reflect the underlying share price so sell it and take the profits. Why would you take delivery of the shares when that is what you wanted to avoid in the first place?

A call is the right to buy not the obligation. The market maker who sold the calls originally would prefer its not exercised as it saves them having to buy the shares and deliver them to you though, as the expiration date gets closer they will have to start buying in case the option holder wants to take delivery. In the case of game that buying along with shorts trying to cover and people buying long caused the price to go up massively.

Does that mean so you're able to sell on the original call option at a profit rather than creating a new one that you'd be on the hook for? So essentially if I buy a call option from Person A and the share price doubles, rather than taking delivery of the shares at the agreed price, I can sell that existing option to Person B for a profit then if person B actually wants to take delivery of the shares they'd do so from Person A?

Bob Harris · 14-02-2021 06:15PM

JohnK wrote: »

Does that mean so you're able to sell on the original call option at a profit rather than creating a new one that you'd be on the hook for? So essentially if I buy a call option from Person A and the share price doubles, rather than taking delivery of the shares at the agreed price, I can sell that existing option to Person B for a profit then if person B actually wants to take delivery of the shares they'd do so from Person A?

Yes, person A is the person who writes the option, when you sell it on there is nothing new created. Person A will be assigned if the options are exercised by whoever holds them. As a buyer of a call you'll never risk more than the option premium.

Shedite27 · 14-02-2021 09:46PM

VonLuck wrote: »

I was thinking 5 or 6 would be a good starting point myself, but don't want to just pick 6 stocks for the sake of it. I appreciate the suggested companies but obviously will have to do my own research into any of them.

Would you advise against blue chip companies to start off with? I know the return is likely to be lower, but at least you have a solid base and can branch off with riskier stocks whilst building up to 20 or so in your portfolio.

Absolutely, I started off with things like Starbucks, Nike, Apple, great way to find your feet in the market.

Robson99 · 15-02-2021 10:41AM

Have €500 to €1000 to invest / save monthly.
Don't really have time or knowledge to be watching daily for investing so was thinking of setting an investment PIE on T212 with the following investment trusts

Monks Inv Trust 50% ( good mix)
Scottish MT 15% (riskier than Allianz)
Allianz Tech 15% ( safer than all in SMT)
Pacific Horizon 15% ( best Asian one I can put in )
Hipgnosis Songs 5% ( an alternative kicker )

Long term goal is to save for 8 - 10 years and see then.
Any opinions on above appreciated.

coco0981 · 15-02-2021 05:10PM

Any idea on what the current wait time is for an account on either Degiro or Trading 212. Are they much the same?

FionnK86 · 15-02-2021 10:09PM

Where should someone who hasn't invested a penny go, to learn about investing!? I'm sick paying a grand a month to let KBC give me .5% while inflation takes 1% back! Saving for a mortgage but would like to put about 100pm somewhere I can look to positively!

Beginning to Invest - All questions go here please

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