Beginning to Invest - All questions go here please

Bob24

Jim2007 wrote: »

It will not happen to with government bonds because they would just be shooting themselves in the foot. Do a bit of actual research into bond ownership, institutions required to hold government bonds etc.... it would be a pointless exercise.

I am aware of regulatory requirements forcing some institutions to hold government bonds, but you might also have came across a few of those points while doing your research:
- EZ bonds have seen haircuts before: Greece. So even without making assumptions on the future, it simply is stating a fact to say that haircuts on EZ bonds can happen (and it would be factually incorrect to say it can't happen).
- Outside the EZ we have seen defaults in the past few weeks (for exemple Lebanon recently defaulted *for the first time in its history*).
- We are entering very special times and in the last few weeks a lot of things which were never supposed to happen have happened in global financial systems or with government budgets.

So of course those decisions wouldn't be taken lightly, but IMO it would be naive to think haircuts/defaults simply can't happen and that any money put in a government bond is 100% safe.

Plus as I said, near-zero interest rates combined to inflation (which I think might come in the medium term) would be another way to effectively reduce the actual purchasing power of creditors once they see their money back. Not technically defaulting but similar outcome for the creditor.

But going back to my original post, this was just an informational side warning to the OP so that they are clear on what bonds are and can do their own research and make up their own mind about that potential risk of they want to. I wasn't telling them not to get bonds or that all governments are about to default.

Mantis Toboggan

So I'm thinking of investing 5-10k in the stock market. Did this a little in the past and got slightly burned so this time I've done a good bit of research into a number of companies. Question is would I be better dividing this between stocks and ETF's? No very little about ETF's.

garbanzo

Interesting to note since the whole Covid-19 business started:

1. My personal equity portfolio of six shares is down 50%

2. My pension fund is down 20%

I know the reasons behind this. Just interesting to see it in fact and thought to share my experience. I’ve about 10 years or so for these to hopefully recover so I’m not over-worried about it. Fingers crossed and all that... ��

Cheers

garbanzo

Bob24

garbanzo wrote: »

Interesting to note since the whole Covid-19 business started:

1. My personal equity portfolio of six shares is down 50%

2. My pension fund is down 20%

I know the reasons behind this. Just interesting to see it in fact and thought to share my experience. I’ve about 10 years or so for these to hopefully recover so I’m not over-worried about it. Fingers crossed and all that... ��

Cheers

garbanzo

If you are 10 years from retirement and on a default strategy, I assume a decent part of you pension is on defensive stocks and bonds, and a small portion even possibly possibly on a cash fund?

Mad_maxx

Mantis Toboggan wrote: »

So I'm thinking of investing 5-10k in the stock market. Did this a little in the past and got slightly burned so this time I've done a good bit of research into a number of companies. Question is would I be better dividing this between stocks and ETF's? No very little about ETF's.

if it was me , id buy half now and then wait another six months to invest the rest , if the virus situation has resolved itself and stocks are much higher , thats a good result , it means you bought value today but also you can buy more without having to look over your shoulder

id wait a week before buying now however , the market appears to be retesting the lows from around st patricks day , better if you get in several percent lower

personally id consider the following sure thing companies in terms of what will always be with us

coca cola ( has a really good dividend and people will still drink coke albeit at home if need be )

johnson and johnson , again they have a very good dividend and are more or less recession proof

google = stock is back a good bit , they have a boat load of cash to weather this crisis

nestle = as safe a company as is out there , it wont treble in value but will allow you sleep at night soundly

volkswagen ( id wait until it drops to 80 euro again ) , cars are not going away , it and toyota are the worlds largest car makers by a mile but VW is in euro where as with toyota you are buying the expensive japanese yen

amazon = will emerge even more powerful after this crisis reseeds

Bob24

Mad_maxx wrote: »

nestle = as safe a company as is out there , it wont treble in value but will allow you sleep at night soundly

Good company for sure, but am I wrong in thinking the Swiss are very punitive for non-residents in terms of taxing dividends?

Ciaran10014

Hi, I am trying to sell shares on degiro and keep getting the message: "The maximum quantity of open orders allowed on this instrument is 0. Please delete some of your pending orders before placing an additional one on this instrument." does anyone know what I am doing wrong? I don't have any outstanding orders. The stock is National American University Holdings (NAUH). Thanks

Shedite27

Ciaran10014 wrote: »

Hi, I am trying to sell shares on degiro and keep getting the message: "The maximum quantity of open orders allowed on this instrument is 0. Please delete some of your pending orders before placing an additional one on this instrument." does anyone know what I am doing wrong? I don't have any outstanding orders. The stock is National American University Holdings (NAUH). Thanks

I can't find that stock on Degiro (basic package), did you buy it throguh degiro?

Ciaran10014

Shedite27 wrote: »

I can't find that stock on Degiro (basic package), did you buy it throguh degiro?

Yeah I bought it maybe about a year ago and haven't looked at my degiro account since.

Ciaran10014

This is it in my portfolio

Jim2007

Bob24 wrote: »

Good company for sure, but am I wrong in thinking the Swiss are very punitive for non-residents in terms of taxing dividends?

As per the double tax agreement - 15% withholding tax offset in the usual way... if non resident.

if resident, it is treated as normal income and taxed at the normal income tax rate - we don't have progressive tax rates. And capital gains from investing are tax exempt.

Shedite27

Ciaran10014 wrote: »

This is it in my portfolio

I can see that's on the Acra index, I can't see any shares listed on that when I search through the Product --> Shares route.

Looks like something to do with the Index rather than just your shares anyway.

Jim2007

Ciaran10014 wrote: »

Yeah I bought it maybe about a year ago and haven't looked at my degiro account since.

Presumably you bought it before it got kicked to the kerb. Look through the notices you received from the broker, there may be something in there telling you what to do or contact support.

Bob24

Jim2007 wrote: »

As per the double tax agreement - 15% withholding tax offset in the usual way... if non resident.

Not sure I fully get you.

Switzerland has a 35% withholding tax on dividends right?

So what we’re saying is that for and Irish tax resident 20% can be offset against Irish income and 15% are “lost” to the Swiss government?

Jim2007

Bob24 wrote: »

Not sure I fully get you.

Switzerland has a 35% withholding tax on dividends right?

So what we’re saying is that for and Irish tax resident 20% can be offset against Irish income and 15% are “lost” to the Swiss government?

No the Swiss withhold tax rate is 15% for Irish residents. So the Swiss company will distribute 85% of the declared dividend. I don’t know if Irish law requires the broker to apply additional withholding taxes before the cash hits your account.

I don’t believe the 15% is lost as you say. I expect you either get a credit for it against your taxation or it is treated as an investing expense. It should be no different from the dividends you receive from other foreign companies.

Bob24

Jim2007 wrote: »

No the Swiss withhold tax rate is 15% for Irish residents. So the Swiss company will distribute 85% of the declared dividend. I don’t know if Irish law requires the broker to apply additional withholding taxes before the cash hits your account.

I don’t believe the 15% is lost as you say. I expect you either get a credit for it against your taxation or it is treated as an investing expense. It should be no different from the dividends you receive from other foreign companies.

Are you absolutely positive about 15% withholding tax?

I had done some googling a few weeks ago as I was considering Nestlé shares and all the sources I came across were mentioning 35%, for example:
- https://www.pkf.com/media/10028480/switzerland-tax-guide-2016-17.pdf - "Dividends paid from Swiss capital companies to Swiss residents and non-residents are subject to 35% withholding tax"
- https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-switzerlandhighlights-2019.pdf - "Dividends paid to a nonresident are subject to a 35% withholding tax"
- https://sigtax.com/en/dividend-tax-switzerland - "Dividends and interests are a subject of the withholding tax, at a rate of 35%"

Jim2007

Bob24 wrote: »

Are you absolutely positive about 15% withholding tax?

I had done some googling a few weeks ago as I was considering Nestlé shares and all the sources I came across were mentioning 35%, for example:
- https://www.pkf.com/media/10028480/switzerland-tax-guide-2016-17.pdf - "Dividends paid from Swiss capital companies to Swiss residents and non-residents are subject to 35% withholding tax"
- https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-switzerlandhighlights-2019.pdf - "Dividends paid to a nonresident are subject to a 35% withholding tax"
- https://sigtax.com/en/dividend-tax-switzerland - "Dividends and interests are a subject of the withholding tax, at a rate of 35%"

Article II, Section 2 of the Double Tax agreement:

https://www.newsd.admin.ch/newsd/message/attachments/25548.pdf

The best is to ask your broker how they apply it.

(Seems a bit strange that no one else has chipped in... surely someone here, must own a Swiss MNC and got dividends?)

Mantis Toboggan

Quick question that someone maybe able to help with.

So I've a few CRH shares and got the dividend payments today. The dividend rate is 63 cent per share which I knew about but when I check it on yahoo finance it lists the rate at 83?

Just slightly confused and wondering should I be trusting the info on yahoo?

AlmightyCushion

Mantis Toboggan wrote: »

Quick question that someone maybe able to help with.

So I've a few CRH shares and got the dividend payments today. The dividend rate is 63 cent per share which I knew about but when I check it on yahoo finance it lists the rate at 83?

Just slightly confused and wondering should I be trusting the info on yahoo?

Dividend withholding tax for Irish companies is 25%. It could be that.

Bob24

Jim2007 wrote: »

Article II, Section 2 of the Double Tax agreement:

https://www.newsd.admin.ch/newsd/message/attachments/25548.pdf

The best is to ask your broker how they apply it.

(Seems a bit strange that no one else has chipped in... surely someone here, must own a Swiss MNC and got dividends?)

To complicate the matter more my broker is neither based is Ireland nor in Switzerland so I’m not sure they’ll be to interested in discussing Irish-Swiss tax treaties, but I’ll drop them a message and see what they say! (Although I fear they will give a vague answer so that they don’t commit to anything ...)

Mantis Toboggan

AlmightyCushion wrote: »

Dividend withholding tax for Irish companies is 25%. It could be that.

No the dividend withholding tax is taken from the 63 cent.

Bob24

Jim2007 wrote: »

Article II, Section 2 of the Double Tax agreement:

https://www.newsd.admin.ch/newsd/message/attachments/25548.pdf

The best is to ask your broker how they apply it.

(Seems a bit strange that no one else has chipped in... surely someone here, must own a Swiss MNC and got dividends?)

Bob24 wrote: »

To complicate the matter more my broker is neither based is Ireland nor in Switzerland so I’m not sure they’ll be to interested in discussing Irish-Swiss tax treaties, but I’ll drop them a message and see what they say! (Although I fear they will give a vague answer so that they don’t commit to anything ...)

So the broker came back and said that since they are not located in Ireland or Switzerland, they are not able to apply the reduced withholding tax rate from the tax treaty.

I suspect this will be a problem with most brokers. I know there is a similar issue with French shares whereby France has a 30% withholding tax for French tax residents which is reduced to 12,8% for tax residents of foreign countries countries France has tax treaties with. But only French brokers seem to apply that reduced rate of 12.8%; for example DeGiro will apply the full 30% to Irish tax residents even though they should only pay 12.8%, and because the tax treaty between France and Ireland says 12.8 this is all you can offset against other tax liabilities here so you get screwed with the other 17.2%.

Jim2007

Bob24 wrote: »

So the broker came back and said that since they are not located in Ireland or Switzerland, they are not able to apply the reduced withholding tax rate from the tax treaty.

Ouch, not good.

I guess the first problem is that the shares are not registered in your name, but some kind of nominee and so the company making the dividend distributions have no idea of the ultimate owner's residential status. And so the standard withholding takes in each country apply.

bfa1509

Has Degiro been more glitchy than usual for anyone else? I'm finding it slow to refresh figures and graphs and the daily loss/gain (while a useless figure anyway) has been all over the place.

I wish they would stop messing around with things at such a crucial time. I thought they were overwhelmed with traffic as it is?!

iAcesHigh

bfa1509 wrote: »

Has Degiro been more glitchy than usual for anyone else? I'm finding it slow to refresh figures and graphs and the daily loss/gain (while a useless figure anyway) has been all over the place.

I wish they would stop messing around with things at such a crucial time. I thought they were overwhelmed with traffic as it is?!

Being overwhelmed with traffic is probably cause for those issues...

Jim2007

bfa1509 wrote: »

Has Degiro been more glitchy than usual for anyone else? I'm finding it slow to refresh figures and graphs and the daily loss/gain (while a useless figure anyway) has been all over the place.

I wish they would stop messing around with things at such a crucial time. I thought they were overwhelmed with traffic as it is?!

A lot of Europe was very patchy today. Some parts did not have access to Vienna or London for most of the morning.

Kristopherus

Hey Guys, can anyone tell if Star Bank in USA is legit, please?

Answer via pm if necessary.

1123heavy

I see on the shares to look out for thread people talking about a range around 2500, what exactly is this range and what significance does it have on buying a particular company's stock?

Shedite27

1123heavy wrote: »

I see on the shares to look out for thread people talking about a range around 2500, what exactly is this range and what significance does it have on buying a particular company's stock?

It's the S&P index, probably the most common index to use to see if the market is up or down. It's basically a combination of all the 500 most common stocks (there's a compelx algorith to calculate it). You'll hear a lot of commentators talk about it.

The record in Feb was almost 3400, it dropped to 2300 in a week or so, and has slowly been climbing back to about 2800. Every commentator/analyst would have an idea of where it should be at currently.

1123heavy

Shedite27 wrote: »

It's the S&P index, probably the most common index to use to see if the market is up or down. It's basically a combination of all the 500 most common stocks (there's a compelx algorith to calculate it). You'll hear a lot of commentators talk about it.

The record in Feb was almost 3400, it dropped to 2300 in a week or so, and has slowly been climbing back to about 2800. Every commentator/analyst would have an idea of where it should be at currently.

Thanks. Is it something I should really be looking at before buying stock? Is it possible to focus on things at a company/sector level without this added complexity? I've been looking at lots of videos of the do's and don'ts of stock buying but haven't come across this till now

Shedite27

1123heavy wrote: »

Thanks. Is it something I should really be looking at before buying stock? Is it possible to focus on things at a company/sector level without this added complexity? I've been looking at lots of videos of the do's and don'ts of stock buying but haven't come across this till now

I think if there's a stock you like, there's no wrong time to buy.

If you're watching CNBC, all the analysts discuss it a lot. It's an interesting reference point, but it outlines the entire market. The S&P could remain static, while Oil and Airlines go way down, balanced out by Amazon and Google having a good week.

Jim2007

Shedite27 wrote: »

I think if there's a stock you like, there's no wrong time to buy.

Dead wrong! Most people have no problem identifying the good stocks, but few of them will buy the stock at a price that gives them a good chance of earning a reasonable return. There are in fact very occasions on which to buy the popular stocks at a price that will give you the opportunity to earning a reasonable return at a reasonable risk.

ANXIOUS

Anyone having issues buying FBD or Ryanair on DEGIRO? It is like they have no live price for them and don't actively show what the bid/ask is.

tamova

Hi folks.

I'm new to the world of investing (or saving really!) and I'm trying to figure out how to invest. For context, I'm 24 and I'm currently enrolled in my company's pension plan (with max contribution, which they double) and I have also enrolled in the ESPP as I get 10% discount on a really stable growth stock.

The ESPP has been going pretty good and I seen a 25% return on my first purchase of stocks (which I'm guessing is definitely timing related). I also put 1500$ in to a stock on Revolut trading and I've seen a 3.5% return on that in three days. I think I'm doing fairly decent but I'm really just taking shots in the dark.

I'm trying to get in to videos on youtube but it's all very US-centric. The Irish tax aspect also has me a little baffled.

Could anyone provide me with some tips on books or youtube channels etc to get me started?

Thanks a million.

Shedite27

tamova wrote: »

Hi folks.

I'm new to the world of investing (or saving really!) and I'm trying to figure out how to invest. For context, I'm 24 and I'm currently enrolled in my company's pension plan (with max contribution, which they double) and I have also enrolled in the ESPP as I get 10% discount on a really stable growth stock.

The ESPP has been going pretty good and I seen a 25% return on my first purchase of stocks (which I'm guessing is definitely timing related). I also put 1500$ in to a stock on Revolut trading and I've seen a 3.5% return on that in three days. I think I'm doing fairly decent but I'm really just taking shots in the dark.

I'm trying to get in to videos on youtube but it's all very US-centric. The Irish tax aspect also has me a little baffled.

Could anyone provide me with some tips on books or youtube channels etc to get me started?

Thanks a million.

There's far more people invested in the US stock market than Irish, cheaper fees and more companies to choose from. I always advise people to download the MyWallSt Learn App and go through their lessons for a good introduction course.

The basic version of Irish tax is:
1. Any dividends you get paid, treat them as income, declare them on Revenue online and they'll tell ya how much ya owe based on your circumstances (20% or 40%.
2. When you sell shares, it counts as a gain/loss. Add up your gains/losses at the end of the year and pay 33% on that.

March/April has been record setting for the US Tech/Communications stock so 3.5% in 3 days is all over the place at the moment, won't last forever I'm afraid, but take it while it's going

tamova

Shedite27 wrote: »

There's far more people invested in the US stock market than Irish, cheaper fees and more companies to choose from. I always advise people to download the MyWallSt Learn App and go through their lessons for a good introduction course.

The basic version of Irish tax is:
1. Any dividends you get paid, treat them as income, declare them on Revenue online and they'll tell ya how much ya owe based on your circumstances (20% or 40%.
2. When you sell shares, it counts as a gain/loss. Add up your gains/losses at the end of the year and pay 33% on that.

March/April has been record setting for the US Tech/Communications stock so 3.5% in 3 days is all over the place at the moment, won't last forever I'm afraid, but take it while it's going

Thank you for this advice!

Question, with the tax exemption of capital gains up to 1270 - can I hold on to these shares and just file there loss/gain every year (basically meaning I'd be exempt as I doubt I'll be earning more than 1k a year in gains)? If I did this and sold them ten years down the line, I wouldn't have a lump sum capital gains payment would I?

Shedite27

tamova wrote: »

Thank you for this advice!

Question, with the tax exemption of capital gains up to 1270 - can I hold on to these shares and just file there loss/gain every year (basically meaning I'd be exempt as I doubt I'll be earning more than 1k a year in gains)? If I did this and sold them ten years down the line, I wouldn't have a lump sum capital gains payment would I?

Sorry, not sure why I skipped that bit, should be:

2. When you sell shares, it counts as a gain/loss. Add up your gains/losses at the end of the year, keep the first 1270 tax free, and pay 33% on the balance.


No, you only count the gain/loss in the year you sell them. It's annoying for those that want to hold long term, If you buy now, grow 1k each year for 10 years, then sell in year 10, you pay no tax for the first 10 years, then in year 10 you would have a gain of 10k, subtract the tax free allowance for that year (1270), so you'd owe tax on 8730. Pay 33% on that (2880), so you'd keep about 7300 of the 10k gain.

On the flip side, means you don't need to make a CGT return every year.

Bob24

Shedite27 wrote: »

Sorry, not sure why I skipped that bit, should be:

2. When you sell shares, it counts as a gain/loss. Add up your gains/losses at the end of the year, keep the first 1270 tax free, and pay 33% on the balance.


No, you only count the gain/loss in the year you sell them. It's annoying for those that want to hold long term, If you buy now, grow 1k each year for 10 years, then sell in year 10, you pay no tax for the first 10 years, then in year 10 you would have a gain of 10k, subtract the tax free allowance for that year (1270), so you'd owe tax on 8730. Pay 33% on that (2880), so you'd keep about 7300 of the 10k gain.

On the flip side, means you don't need to make a CGT return every year.

And just to add to this, if you are making net losses some years to file them in a tax return as they can be offset agains future gains in the following years (if I am not mistaken).

tamova

Shedite27 wrote: »

Sorry, not sure why I skipped that bit, should be:

2. When you sell shares, it counts as a gain/loss. Add up your gains/losses at the end of the year, keep the first 1270 tax free, and pay 33% on the balance.


No, you only count the gain/loss in the year you sell them. It's annoying for those that want to hold long term, If you buy now, grow 1k each year for 10 years, then sell in year 10, you pay no tax for the first 10 years, then in year 10 you would have a gain of 10k, subtract the tax free allowance for that year (1270), so you'd owe tax on 8730. Pay 33% on that (2880), so you'd keep about 7300 of the 10k gain.

On the flip side, means you don't need to make a CGT return every year.

Really helpful thank you.

Would it be possible for me to sell my shares annually to avail of the tax exemption, then take this money and put it straight back in to shares?

Shedite27

tamova wrote: »

Really helpful thank you.

Would it be possible for me to sell my shares annually to avail of the tax exemption, then take this money and put it straight back in to shares?

To be honest, I thought it didn't count as a gain if you bought it back within 30 days, and p0sted about it a few days ago (halfway down this page), people have come back both agreeing with my view and others with a different interpretations. So essentially I don't know.

Concentrate on making over 1,270 gains a year first and we'll worry about the tax implications then

Mantis Toboggan

Do most solely invest in shares or diversify into bonds, etfs crypto, commodities? What's a good portfolio?

Bob24

Mantis Toboggan wrote: »

Do most solely invest in shares or diversify into bonds, etfs crypto, commodities? What's a good portfolio?

Very much depends on your particular investment target and timeframe, as well as your own beliefs on where the economy is going and how involved you want to be with following your investments.

The advice you will often hear is that for a medium term “lazy” investment strategy, you can go 60% on a MSCI world (or S&P500) stocks ETF, 40% on bonds, and rebalance regularity.

But this is rather far from what I am personally doing.

It is a good idea to think of what you are trying to achieve and then understand what the appropriate options are.

Steer55

pocketdooz wrote: »

Do you really get 7-8% in the credit union?

I dont think so.

.

Most credit unions are paying Zilch, Zero, Nought :-(. In fact some have even set limits on how much you can save with them now.

Bob24

Steer55 wrote: »

Most credit unions are paying Zilch, Zero, Nought :-(. In fact some have even set limits on how much you can save with them now.

Just in case you overlooked it, the post you are replying to dates back from 2010.

Mantis Toboggan

Bob24 wrote: »

Very much depends on your particular investment target and timeframe, as well as your own convictions and how involved you want to be with following your investments.

The advice you will often hear is that for a medium term “lazy” investment strategy, you can go 60% on a MSCI world (or S&P500) stocks ETF, 40% on bonds, and rebalance regularity.

But this is rather far from what I am personally doing.

It is a good idea to think of what you are trying to achieve and then understand what the appropriate options are.

Cheers Bob

Blisterman

Am I right, that generally from a tax efficiency perspective, you want the majority of your gains to come through increase in the share price rather than dividends, as you pay income tax, USC and PRSI, whereas you can get the first €1,270 capital gains tax free, and the remainder at 33%?

Assuming I am willing to tolerate the risk, am I best off focusing on selecting a diversified portfolio of non dividend paying shares?

Also, given the stamp duty on Irish and UK shares, should I be primarily looking at other stock markets, such as the NYSE?

iAcesHigh

Blisterman wrote: »

Am I right, that generally from a tax efficiency perspective, you want the majority of your gains to come through increase in the share price rather than dividends, as you pay income tax, USC and PRSI, whereas you can get the first €1,270 capital gains tax free, and the remainder at 33%?

Assuming I am willing to tolerate the risk, am I best off focusing on selecting a diversified portfolio of non dividend paying shares?

Also, given the stamp duty on Irish and UK shares, should I be primarily looking at other stock markets, such as the NYSE?

Yep, that was my take on it, had similar discussion in some thread not that long ago. Stamp duty is quite low on LSX as far as I could see, especially if you're being for long hold so I wouldn't be concerned about that though (didn't check Irish shares as up-until-now wasn't interested in any)...

Mantis Toboggan

If luckin coffee are de listed will the shareholders be reimbursed?

Jim2007

Mantis Toboggan wrote: »

If luckin coffee are de listed will the shareholders be reimbursed?

No, you are an owner - there is nothing to reimbursed. It just means the shares can no longer be traded on the exchange. Normal the shares can then be traded on some OTC market.

Behind you Joey

Hello folks, just about to create a portfolio and have a good idea of my split between stocks, bonds, cryptocurrencies, etc. My question is what is the best application/online trader to go with for trading stocks?

I have heard anecdotally that Revolut is too basic, Trading 212 is decent and DeGiro is robust and reliable. Uncertain regarding the others.

Any advice on which to go with? Investment will be circa €10k for reference.