I’m curious about how others will feel, but 36% really doesn’t sound that bad to me over such a long timeframe. It’s the difference between 4% growth and 2.6% growth per annum; I’m not sure how confident anybody should feel about matching any of the big indices themselves and not being off by 1.4%? You’ll need to constantly rebalance the portfolio, paying CGT, stamp duty, foreign exchange and broker fees along the way, and you cannot just pick the top 10 companies in a hundred company index because the company at 99 may be the one that brings all the growth, and the number 1 may be gone over a timeframe like that.compared with the way stocks are taxed you end up with around 36% less money post tax after 32 years (so ETFs really don't seem like the way to go).
I know ETF's are pretty much the lowest cost things you can purchase. That F&C Investment Trust I mentioned has a pretty low expense ratio of 0.57%, now I'm guessing it has extra hidden costs (more for FCIT here).36% really doesn’t sound that bad to me over such a long timeframe.
Could you explain these numbers a bit more please?It’s the difference between 4% growth and 2.6% growth per annum
I agree, somebody mentioned it to me recently and the idea has been lurking in my mind, but the more I think about it the more it sounds like a terrible idea!I’m not sure how confident anybody should feel about matching any of the big indices themselves and not being off by 1.4%?
That's a very good point.you cannot just pick the top 10 companies in a hundred company index because the company at 99 may be the one that brings all the growth, and the number 1 may be gone over a timeframe like that.
Just published my guide on this very subject
https://view.joomag.com/stock-market-monthly-saver/M0723039001578395978
It’s a shame that’s behind a paywall.Just published my guide on this very subject
https://view.joomag.com/stock-market-monthly-saver/M0723039001578395978
It’s a shame that’s behind a paywall.
Hardly in the spirit of AAM.
I've paid my few euro to have a look at Marc's guide and thought I would post a brief review of it that may assist others to decide if they should do the same. I don't have a lot of knowledge of investing in equities but I am looking to do this more and a regular saver type product would appeal to me.
The guide is 32 pages long. It is my first time using joomag and I have not found it particularly user friendly. I cannot zoom in on the pages either on my laptop or phone making some of the finer detail unreadable. It might just be me though. The first four pages are those that can be viewed on the link for free. Following this there is information on suitability, information on saving for children, how these savings can be held and some tax assessment of individuals and couples holding trusts. There are a few pages on Brexit and currency risks and then detail on two named investment trusts providing regular saving options, three pages on one trust and two on another. There is then a little information on the process of opening an account, some background on Global Wealth and an outline of Bare Trusts. It finishes with a costs disclosure for one of the Trusts which I could not read due to the small print.
My main conclusion after purchasing and reading this is that it is only really useful for someone who is looking to open an account in a child's name and gift them the money to be invested. This is alluded to in the introduction that can be read for free but I think it should have been more explicitly stated. Those considering a regular saving plan generally should be able to easily access the information elsewhere for free as Fella has mentioned above.
Furthermore I believe that the tax advice given regarding individuals and couples investing for themselves is wrong. Marc looks to have got confused between effective and marginal tax rates. He has sourced figures from Social Justice Ireland dealing with effective tax rates and presented them on a graph as marginal tax rates. I'm by no means a tax expert and obviously Marc is free to correct me on anything I say here if he wishes. I should add that there is also a disclaimer on the first page regarding the tax advice given.
I felt that there wasn't enough information given about the Trusts, the account opening and operating procedures and Global Wealth's role in these. There is an invitation to contact them for further information if interested but having paid for the guide I was disappointed not to learn more.
So although I am looking to invest regularly in equities (similarly to 'Fireduck') I did not find the guide worth paying for. However if someone is looking to invest in a child's account it probably would be. I have not done any research to see if the same level of detail about this is freely available online but I would doubt it.
Standard Life have a ‘bare trust’ product which is very user friendly. People don’t tend to like life companies but their big advantage is around the tax filing. No filing or payment obligations arise for people who invest via life companies. Whereas Investment Trusts and ETFs create an obligation to submit a tax return and keep track of dividends and gains. There is a lot to be said for simplicity, i.e. be mindful of the fees, avoid lock-ins, be mindful of the 1% levy, and use the most diversified global equity fund option.
The idea of a bare trust is to invest money for someone else - it's legally theirs. I've a very similar one set up with New Ireland for my children. If investing for yourself, you just do it without the bare trust.Do you think a Standard Life bare trust would be a better place to invest for a 100% global equity compared to say F&C Investment Trust (benchmark is FTSE World Equity)?
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