My son, who is a mature 3rd level student, doesn't have a fixed income. However, from time to time, he works part-time. He is thinking of buying shares occasionally, from time to time, when he has a bit of surplus cash, to build up a portfolio gradually. What is the minimum amount he can buy? For example, he is thinking of buying Ryanair. If he opens an account with, e.g. Goodbody, what would his expenses be?
Minimum amt of shares that can be bought
- Thread starter joanmul
- Start date
If he is buying small amounts, he would be better off investing through a unit linked fund, e.g. Quinn Life or Rabodirect. Both allow small monthly investments.
Investing directly in shares is almost certainly not feasible due to the costs.
Please don't mention individual shares.
Investing directly in shares is almost certainly not feasible due to the costs.
Please don't mention individual shares.
Taking one of the cheapest Irish brokers, Davy Direct, heres the costs for a €500 Ryanair transaction bought and sold over one year...
€25 (to Buy)
€25 (to Sell)
€5 (Stamp Duty)
€80 (Annual Account Fee)
Total Costs: €135
So, just to break even you would need the shares to rise in value by over 25% in one year.
If we deal with a €1,000 purchase and sale...
€25 (to buy)
€25 (to sell)
€10 (Stamp Duty)
€80 (Annual Account Fee)
Total Costs:€140
Here you'd need a rise in value of 14% over a year.
Obviously the larger the sums the smaller the costs as a percentage. If he is dealing with small sums, he should either get a cheap online broker or just do €50 once off trades with Sharewatch.
I'm also a 3rd level student getting ready to delve into the stockmarket. Ive decided the minimum investment I'm prepared to make is €2,000 in a single trade. At that figure the pure transaction costs would equal 3-4% and hopefully I can spread the account fees across several trades (using a joint account with a family member).
€25 (to Buy)
€25 (to Sell)
€5 (Stamp Duty)
€80 (Annual Account Fee)
Total Costs: €135
So, just to break even you would need the shares to rise in value by over 25% in one year.
If we deal with a €1,000 purchase and sale...
€25 (to buy)
€25 (to sell)
€10 (Stamp Duty)
€80 (Annual Account Fee)
Total Costs:€140
Here you'd need a rise in value of 14% over a year.
Obviously the larger the sums the smaller the costs as a percentage. If he is dealing with small sums, he should either get a cheap online broker or just do €50 once off trades with Sharewatch.
I'm also a 3rd level student getting ready to delve into the stockmarket. Ive decided the minimum investment I'm prepared to make is €2,000 in a single trade. At that figure the pure transaction costs would equal 3-4% and hopefully I can spread the account fees across several trades (using a joint account with a family member).
Actually more after CGT is taken into account. If the shares appreciated by 25% then your gain after tax would be €100 so you would still be out of pocket.
Isn't there an annual exemption of €1,270 per person?
Fully agree, if I go ahead, i'll be dealing with 4-5 shares, not one.
I was just making the above example as simple as possible to illustrate to the original poster how unviable small share dealing is.
I'd agree with that figure (indeed its the exact figure i'm dealing with).
Yes, I have no doubt you would be adopting a sensible strategy CGorman 
.
It doesn't sound like the OPs son will have €10k to invest (immediately anyway).
Of course another strategy is to save until you have €10k (or whatever) to invest directly and then do so.
This thread in the Best Buys forum may be of interest to the OP.
.It doesn't sound like the OPs son will have €10k to invest (immediately anyway).
Of course another strategy is to save until you have €10k (or whatever) to invest directly and then do so.
This thread in the Best Buys forum may be of interest to the OP.
Have been researching my options heavily in the past few weeks (much thanks to the many excellent trends on AAM) and have noticed a US firm called Firstrade.
Apparently they charge the equivilant of €5.30 to buy and the same to sell US Equities, with no other obvious fees. My point is, if the OP's son wants to start off small, those rates make it quite possible to do so. At €5.30, he could even invest in 5 companies at €500 each (€2,500)... a nice spread of risk at low cost.
I have not fully researched this company yet, all I know is a AAM poster recommended them and that they are one of a surprisingly small number of foreign online brokers to allow Irish people to set up accounts.
OP, note that sharedealing can have significant tax implications. I've spent the evening on revenue.ie getting up to speed on CGT and dividend implications.
* Having spent some time researching my options, i've compiled a table of firms which accept Irish citizens and there relevent costs. If anyone would like me to post this table (about 8 firms), i'd be happy to do so.
NOTE: Using US/UK brokers will leave the OP's son venerable to currency movements
Apparently they charge the equivilant of €5.30 to buy and the same to sell US Equities, with no other obvious fees. My point is, if the OP's son wants to start off small, those rates make it quite possible to do so. At €5.30, he could even invest in 5 companies at €500 each (€2,500)... a nice spread of risk at low cost.
I have not fully researched this company yet, all I know is a AAM poster recommended them and that they are one of a surprisingly small number of foreign online brokers to allow Irish people to set up accounts.
OP, note that sharedealing can have significant tax implications. I've spent the evening on revenue.ie getting up to speed on CGT and dividend implications.
* Having spent some time researching my options, i've compiled a table of firms which accept Irish citizens and there relevent costs. If anyone would like me to post this table (about 8 firms), i'd be happy to do so.
NOTE: Using US/UK brokers will leave the OP's son venerable to currency movements
Last edited:
That would be very useful. Could you post it in the Best Buys forum?
A
adam
Guest
Not sure if this is any help but I recently set up a Davy's online A/C - it was very straight forward - downloaded forms etc.. You did need a min of 2,000 euro to deposit with them to start off though. Presume Goodbody's are much the same.
No problem, sure I'd all that data sitting on my pc, why not share it and save others the work?
BTW: When you take into account stamp duty, the huge range of US shares and the cheapness of Firstrades commissions it seems mighty attractive to trade frequently in the US and try and aim for small quick gains of 5-10% rather than leave it all sitting in boring FTSE 100 firms!
However, in the end I think the currency stability of the sterling outweighs the pros of jumping to the states... sure 0.5% stamp duty is'nt too bad.... I think i'm going to end up putting the 10k into Hoodless Brennan.
It is possible to trade for 2.5K, I also use firstrade and at $6.95 per trade its very easy to deal with small portfolios plus you done have the 1% stamp duty on irish shares.
The only downsides is the currency fluctuation, but the euro is worth ~1.32$ at the moment so i think it possibly it could work in your favour.
The other limitation is funding the account, you need a electronic funds transfer from your irish bank who will charge you 15-30Euro and you probably will be charged at the other end too for recieving the money (~30$) plus whatever commsion the bank charge on the currency conversion.
Also you cant trade any irish/uk shares (unless the are listed in the US).
Wouldnt go near irish stockbrokers unless you have a lot of money to trade 10-20K+as the commisions are ridiculous.
The only downsides is the currency fluctuation, but the euro is worth ~1.32$ at the moment so i think it possibly it could work in your favour.
The other limitation is funding the account, you need a electronic funds transfer from your irish bank who will charge you 15-30Euro and you probably will be charged at the other end too for recieving the money (~30$) plus whatever commsion the bank charge on the currency conversion.
Also you cant trade any irish/uk shares (unless the are listed in the US).
Wouldnt go near irish stockbrokers unless you have a lot of money to trade 10-20K+as the commisions are ridiculous.
Some of the last few threads seem to be digressing into arguing particular points with each other rather than answering joanmul's question.
As clubman pointed out (and this is my experience too), €10000 is about the min worthwhile transaction in Irish shares. You could just about do €5000 if you're using someone a little cheaper like Sharewatch who I use. As was also pointed out by another poster due to risk it's not a good idea to purchase shares in just 1 company. I'd recommend 4 to start with.
I don't agree with the recommendation for investing with US brokers. He would be investing in US shares which are more liquid, more volatile and carry a $ currency risk that has been hanging around the last 2 years. Yes it's much cheaper to invest in the US but not necessarily a good idea for a novice with small funds.
The best suggestion given (which I concur with) is to buy into funds such as those from Quinn Direct, Rabobank or others. Given your son is in university it's unlikely he has time to track individual companies he would be investing in and it's a bad idea to buy without having done the homework. I would recommend Euro Funds at the moment as the returns are > 10% with a much lower risk than other global funds which aren't preforming much better (or in some cases worse).