New to investing have €40k but not sure what to do with it.

nastros

I have mainly looked at putting the money in a Managed Investment account but I am not sure which company would be best to go with. Rabo seems to be one thats popped up a few times but I have yet to hear of anyone seeing results. I realize that there is a big risk with investing but this is money that I am ok with losing as I am in full time employment and have savings etc. I know absolutely nothing about investing hence I was thinking a managed investment is probably best for me. Can anyone advise on who tend to be the better groups to invest with. If someone could also advice some books or websites that are good for a beginner investor that would be great.

Thronegames

nastros wrote: »

I have mainly looked at putting the money in a Managed Investment account but I am not sure which company would be best to go with. Rabo seems to be one thats popped up a few times but I have yet to hear of anyone seeing results. I realize that there is a big risk with investing but this is money that I am ok with losing as I am in full time employment and have savings etc. I know absolutely nothing about investing hence I was thinking a managed investment is probably best for me. Can anyone advise on who tend to be the better groups to invest with. If someone could also advice some books or websites that are good for a beginner investor that would be great.

If you are really serious about being willing to lose 40k you are in a minority! Managed funds are OK if you are in for the long term. But be very careful. Question # 1 you need to ask from any broker is: "Is my capital guaranteed?" Some of these funds come with 90% guarantee. If there is a market crash in the asset class in which the fund is invested then you could lose the lot. Also ask re early exit penalties from the fund if you are going to need to money in the next few years. Also ask what's the annual management fee (usually 1.5% or so) There are loads of funds out there. Just for example GARS from Standard Life, also BCP etc. I invesetd in a Friends First commercial property fund last year and it's doing OK ish. As for equities I opened a Davy Select online account late last year and bought shares online. Their rates are reasonable but I'm told Saxo is the cheapest online broker for direct trading. Just a note on investing in equity funds; the stock market has been on a bull run for the last year and a half or so. It could be due for downward correction but who am I to say? A lot of VERY experienced people in this BB forum and many specialise in spread-betting. I've had my ass kicked around here for asking questions! I'll probably get chewed again for offering advice! All above is based on my recent limited experience and overall I would say to you - get INDEPENDENT financial advice. Best of luck!

JohnnieA

If you are sure about being OK with possibility of losing money initially, consider using a small amount of the 40k to buy shares directly.

Start with a small amount, 2-3k maybe and buy shares of solid companies (preferably with dividends). Read a bit and do some research.
As you feel more confident, you can start putting more money there, or perhaps buying shares of some more risky companies.

Just remember, it's not worth spending less than 1k in one go, because the commission fees will get you (I use Davy Select, and I'm fairly satisfied, but I too read Saxo is cheaper).

FTSE100 companies might be the best place to start.

nastros

Thanks for the advice appreciate it. I plan to a lot of research before I jump in.

Thronegames

JohnnieA wrote: »

If you are sure about being OK with possibility of losing money initially, consider using a small amount of the 40k to buy shares directly.

Start with a small amount, 2-3k maybe and buy shares of solid companies (preferably with dividends). Read a bit and do some research.
As you feel more confident, you can start putting more money there, or perhaps buying shares of some more risky companies.

Just remember, it's not worth spending less than 1k in one go, because the commission fees will get you (I use Davy Select, and I'm fairly satisfied, but I too read Saxo is cheaper).

FTSE100 companies might be the best place to start.

Hi JohnnieA thanks. You are right about the research of course. I use Davie Select too but is it not best to max the amount up to the 14.99 minimum charge on a trade? Why limit to 1000e? Also I have been trading mainly on the ISEQ because I know the companies (some), read the Irish business papers, use Irish boards, have a feel for the Irish economy and what's happening on the ground. Why do you say FTSE 100 index is a good place to start? Now I'm not questioning your judgement, just asking questions and my goal is understanding! I was in the market years ago, made a small fortune spent it then lost a small fortune. Only returned since last Nov and so far riding the crest of a wave but a lot more careful this time. We've all seen some shares go to zero; Anglo from 22.00e or so to zero; etc etc etc. So I'm a lot more careful now and have a mental stop loss of 10% where I will simply sell. Right or wrong!

JohnnieA

Thronegames wrote: »

Hi JohnnieA thanks. You are right about the research of course. I use Davie Select too but is it not best to max the amount up to the 14.99 minimum charge on a trade? Why limit to 1000e? Also I have been trading mainly on the ISEQ because I know the companies (some), read the Irish business papers, use Irish boards, have a feel for the Irish economy and what's happening on the ground. Why do you say FTSE 100 index is a good place to start? Now I'm not questioning your judgement, just asking questions and my goal is understanding! I was in the market years ago, made a small fortune spent it then lost a small fortune. Only returned since last Nov and so far riding the crest of a wave but a lot more careful this time. We've all seen some shares go to zero; Anglo from 22.00e or so to zero; etc etc etc. So I'm a lot more careful now and have a mental stop loss of 10% where I will simply sell. Right or wrong!

Hey,
If the OP goes with Davy, you're right of course that it's more efficient to spend at least 3000 (that's when the 0.5% commission becomes 15e). It's just that I usually talk with people who want to start investing with a few hundred, so I'm used to having to try and convince them to wait till it's 1000 at least. 1.5% commission is bearable.

Why FTSE100? No real reason, just my preference. That's where I started.
Advantage of UK: 0.5% stamp duty (as opposed to 1% in ISE). Davy gives instant quotes (as opposed to US, Europe and Asian shares). Daylight trading hours.
FTSE100 has some solid companies, good dividends. Good place for a starter I think.

But if the OP wants to try something else, then by all means go for it. Trading is really the best way to learn. Especially if you're OK with risk of losing money.

At the moment I usually hold about half my shares in UK stocks, rest in Irish and US. I'm thinking about diversifying more, but haven't had the time to reasearch.

nastros

So if I put 1000 with davy's would the best thing to do be split it across 10 shares lets say? Also does davy's allow you to buy shares on the Nasdaq as thats where I would have most knowledge.

JohnnieA

nastros wrote: »

So if I put 1000 with davy's would the best thing to do be split it across 10 shares lets say? Also does davy's allow you to buy shares on the Nasdaq as thats where I would have most knowledge.

No, quite the opposite. You should not spend less than 1000 per share. Preferably more.

Davy charges 0.5% commission, but a minimum 14.99euro. If you spend 100 on a share, you pay 15 euro commsion, so you'll need to be up 15% just to break even. If you spend 1000, your commission will be 1.5%, which is OK. If you spend 3000 or more, you'll pay 0.5% commission only.

Keep in mind that you'll also pay:
_1% stamp duty tax on Irish shares (you have to pay this with any broker).
_0.5% stamp duty tax on UK shares (you have to pay this with any broker).
_25 euro flat Oversees fees when buying US shares (this possibly applies to all non-UK/Ireland shares, but I don't know).
_20 euro maintanance fees per quarter.

I'm really satisfied with Davy, and would recommend it, but look around to see if you get a better deal. Saxo has been getting good reviews on these boards.
Just make sure you read about all fees. Some brokers charge flat commision rates. Some claim they offer 0 maintanance fees, but then charge "inactivity fees" if you make less than n-deals per month.

Yes, you can buy Nasdaq shares with Davy. I bought quite a few Nasdaq and NYSE shares myself. Just keep in mind that the trading hours are afternoon-evening. Also, you won't get instant quotes like you would for most UK/Ireland shares.

For most UK/Ireland shares you can ask to buy for example n shares, and you'll be immediately given a quote at a give price from Davy.
For other shares, you have to specify, I'd like to buy n shares at a maximum of x price, submit the order and then wait for it to be executed (usually 10-15 minutes if the shares are at your specified price or lower).
Same applies to selling.

It's really quite simple once you get the hang of it.

EDIT:
When trading non-euro shares, keep in mind currency rates fluctuations. A UK stock might go up 10%, but if at the same time the pound drops by 10% you end up with no gains. This of course can work in your favour too, if the pound/euro price increases.
The USD seems to be relatively cheap 1.37, compared to 1.3 not long ago, so it might be a good idea to buy Nasdaq shares like you want, but I'm not really a currency fx rate expert.

nastros

Perfect thanks for all the advice appreciate that makes sense. I think for me starting out the irish market might be easiest.