Investing some money

fjon

I have seen a few similar threads on this before, but none close enough to my situation.

I have €15K which I will not be using for around 5 years. I know it's not a huge amount of money, but it would be nice if I could make it grow a bit.
Does anyone have any suggestions on how to invest it?
I have seen people mentioningshares, savings accounts and also offshore accounts.
Any help on this would be greatly appreciated!

conorb56

askaboutmoney.com has got great advice for investments in ireland

aphex™

How about prize bonds? Have a look at www.prizebonds.ie for what sort of cash you can win.

If you mention this to some professional, he'll do one of those nervous fake laugh things, but remember that there are no admisistration fees, and with every certain amout of new bonds, they €75 prizes are automatically increased. There is a monthly prize of €100,000 or so.

Interest rates are crap these days, and the property market outside Dublin is not value for money, so investment schemes in property probably aren't a good option (yeah i know u only have 15k but first active etc do these- usually minimum of €5000 needed). Again the high fees are a problem.

silverside

If you can take some risk, I would invest it in a 'managed fund' - basically a mix of stocks,shares,bonds,etc - from either Quinn Life or EBS. Low charges, good spread of risk, and your money is not sitting in a bank earning a tiny rate of interest.

Look at askaboutmoney.com.

If you stick it in any bank account the most you will make is around 15% risk free.

And avoid tracker bonds. I know how they are set up and a big chunk goes in commissions and profit.

And if you have any loans to pay off or an SSIA you can top up, do that first.

Think about any planned expenses you might have coming up before doing any long term investments. (Car replacement, operations, weddings, whatever).

jay567

Over a min 5 year period it is proven that Shares/Stockes will give the better returns. U could buy urself into 7 different big companies in different sectors and just let them sit for the 5 years. I would say this would be the better option out there. "Internaxx" based in Luxembourg or "share watch" in Ireland are 2 of the cheaper better companies to purchase stock.

But again, askaboutmoney.com is a very good place to read up before making any decisions.

Good Luck!

ionapaul

DO NOT use Sharewatch. Worst brokers I have ever dealt with. Took a small loss recently to get my money away from that organisation. The lowest commission rates are no substitute for lack of professionalism!
If you are going to put it in a savings account, go for Northern Rock's Demand Online account. Best rates around.
If you are risk taker, put the lot in shares (I would). Five years is long enough to reasonably expect a nice return, despite occasional ups and downs.
To repeat what others have said, Askaboutmoney.com rocks! Check it out.

RainyDay

The problem with Prize Bonds (and indeed most deposit accounts) is that while the nominal value of the account is 'safe', the real value of the money in the account (or in the prize bonds) is losing value every month through inflation.

I'd concur with Silverside's recommendations. €15k is probably too small to split across 7 shares (as per Jay's recommendation). The transaction fees on each share purchase would eat into any possible gains. 4 shares from different industries/geographies would give you a reasonable degree of diversification.

Eurorunner

ionapaul wrote:

DO NOT use Sharewatch. Worst brokers I have ever dealt with. Took a small loss recently to get my money away from that organisation. The lowest commission rates are no substitute for lack of professionalism!

Hi Paul. I just posted my application for a sharewatch account about 3 hours ago! Needless to say, having read your post, I gotta ask for more details about how sharewatch didint work for you? Please elaborate.

fintan

it all depends on the level of risk you are willing to take.

Investing in four or five companies is expensive for a number of reasons, broker commissions, trading charges, stamp duty, capital gains tax etc. It would be easier and cheaper to set up a spread bettig account instead (but obviousy a lot easier to loose all your money too).

managed funds or fund of funds are a good way to invest BUT you get hammered on management fees etc. Lots of different funds to suit different levels of risk.

The safest thing to do? longe term savings account. As the special savings account thing is nearing an end soon, the banks will start offering new savings schemes for people to invest.

for a good overview of investing check out www.fool.com

RainyDay

fintan wrote:

managed funds or fund of funds are a good way to invest BUT you get hammered on management fees etc.

What do you mean by 'hammered'? You can get index tracking funds from Quinn Life at 1% pa fees, and actively managed funds from EBS at 1.5% pa. The bad old days of 5% bid/offer spreads are history.

fintan wrote:

The safest thing to do? longe term savings account.

Not true - The risk of losing the real value of your money through inflation is greater than the risk of losing money in the stock market (over the long term).

nahdoic

RainyDay wrote:

What do you mean by 'hammered'? You can get index tracking funds from Quinn Life at 1% pa fees, and actively managed funds from EBS at 1.5% pa. The bad old days of 5% bid/offer spreads are history.

Maybe but any type of yearly management fee should be avoided if at all possible - most of the good money sites recommend you pick and buy shares yourself across a broad range and just let it sit for the long term. No yearly management fees, and it can just grow.

Of course different strokes for different folks though but no way would I be paying a 1.5% yearly management fee.

Not true - The risk of losing the real value of your money through inflation is greater than the risk of losing money in the stock market (over the long term).

Very true. Doesn't necessarily mean the stock market is the answer though

RainyDay

nahdoic wrote:

most of the good money sites recommend you pick and buy shares yourself across a broad range and just let it sit for the long term. No yearly management fees, and it can just grow.

Of course different strokes for different folks though but no way would I be paying a 1.5% yearly management fee.

It's not that easy. The original poster had €15k to invest. In order to buy shares 'across a broad range', he would have to buy say shares at least 6 different companies (€2500 per company). Even with the cheapest Irish broker, the fees would exceed 1.5% for the initial purchase. He'll also be hit with 1% stamp duty. He'll also have to pay similar fees when he comes to sell. He'll also have to account for any dividend income for tax purposes.

A simple low-charging unit-linked fund where all the hassle is managed by the fund managers is starting to look very attractive. The level of diversification in such a fund will be way broader than anything you could hope to achieve on direct purchases.

fintan

RainyDay wrote:

What do you mean by 'hammered'? You can get index tracking funds from Quinn Life at 1% pa fees, and actively managed funds from EBS at 1.5% pa. The bad old days of 5% bid/offer spreads are history.

You are correct quinn life does seem to be very competitive compared to the banks and is definitely worth a look.

from the website:
Quinn life charge between 1% to 1.2% admin fees (depending on the fund)
Transaction charges of 2.54 to 3.81
Switching charges of 25

the small print doesnt seem to have any nasty little charges tucked away like a lot of the banks do.

But as the orginal poster seems to be new to investing, i thought it relevant to point out hidden pitfalls.

RainyDay wrote:

Not true - The risk of losing the real value of your money through inflation is greater than the risk of losing money in the stock market (over the long term).

In the long term anything is possible, while I do understand that stock market investment can provide good returns, the fact remains that bank interest should cancel out inflation and maintain the Present Value of the money on deposit. Especially in "notice" accounts.