Is there a near-generic investment strategy? Looking for recommendations

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romakarol

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I want to invest 20k I can afford to lose. Just to have it grow instead of sitting idle. I want to avoid paying the increased tax rates on index funds.
To my mind this leaves:
A) A fund where the management fees will likely end up similar to just investing in an index.
B) Manually purchasing and managing individual stocks in mimickry of an index fund.

Assuming I want to pursue B:
Is anyone willing to share what their portfolio management looks like atm? Multiple trades will cost you regardless of what platform you use so how many companies is your fund invested in and how often do you manage it?

Or alternatively if someone doesn't mind spoonfeeding me I'm essentially looking for a strategy:
'Use <this> platform and buy the best-performing X stocks from <index of choice>, re-assess every Y period of time and re-balance '.

Thanks for any advice
 
romakarol said:
I want to avoid paying the increased tax rates on index funds.
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I suppose you mean the deemed disposal and exit taxation of ETFs?

romakarol said:
B) Manually purchasing and managing individual stocks in mimickry of an index fund.
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I suppose your alternative strategy is for any gains be subject to CGT instead?

This thread discussed the strategy of using the "Pie feature" from Trading 212 but I think the conclusion was you end up having to pay CGT every time you need to re-balance so ETFs might be a better option.
J

Thread 'An alternative to an ETF to avoid 8 year deemed disposal?'

irishfinanceguy said:
Is this the best available option as it updates your pie?
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Hard to say any one method is the best, depends.

For me, I want to be risk averse and am quite content with matching the return of the big indices. The best solution to do so is typically ETFs, but they are taxed awkwardly and unfairly in Ireland. So, I set up a pie on 212 that mimics the top 50 or so of the S&P index with the weightings adjusted accordingly. So for example, if Apple are say 12% of the S&P 500, I give them 12 divided by the sum of the top 50 weightings, thus they come out at about 13%, which is what I set...
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I found the idea of an unleveraged CFD ETF interesting as that would be subject to CGT and no re-balancing required but you don't own the underlying asset. If the provider goes bust, so too goes your investment.
 
Protocol said:
The 41% exit tax does not just apply to "index funds".
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I suspect that "index funds" may have been mistakenly used here to refer to "unit linked funds"? But your caveat/clarification about where 41% 8 yearly deemed disposal and exit tax applies still stands.
 
romakarol said:
I want to invest 20k I can afford to lose
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If you are of the mindset that you can lose it, you'd be looking at investing in extremely risky assets. Invest in solid companies that will make you money over the long term. I know I don't invest with the mindset that it could go to zero. That's too risky for me.

€20,000 is a relatively small amount to invest, so you don't have huge amount of options. An index fund is your best bet. Yes, the tax is higher but we are all waiting in anticipation on the Budget in a few weeks time to see if the exit tax is reduced to CGT at 33%.

Being invested in a slightly more expensive index fund is better value than a few selected shares that you have to manage yourself, do the trades, rebalancing and taxation on.
 
Steven Barrett said:
€20,000 is a relatively small amount to invest, so you don't have huge amount of options. An index fund is your best bet. Yes, the tax is higher but we are all waiting in anticipation on the Budget in a few weeks time to see if the exit tax is reduced to CGT at 33%.
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Another option perhaps...
C

Post in thread 'What to do with a million euros?'

For many years I had a basic understanding of shares/stock markets and was comfortable with putting my long term maximised pension savings into equities, but was a little more averse to putting significant chunks of my non-pension savings into shares. The diversification, potential risk/volatility and tax issues put me off. So I tended to invest indirectly via low charges unit linked funds. These served me well but I could've done much, much better if I had invested directly in shares due to the lower charges and taxes.

Better late than never I started more seriously investing directly in...
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I was under the *impression managed funds from companies like zurich were structure to avoid the 41% tax but I didnt look into them deeply as Im not really interested in the first place.

So far everywhere the advice I've gotten seems to be to just invest in an ETF. I dont really want to do that when I could be paying the CGT tax instead and offset my losses as well so looks like I will have to do figure it out myself. Investing in X stock that I like from an index carries higher risk but I guess it also carries higher reward potentially so not the end of the world if I cant diversify the portfolio as much as an index.
 
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romakarol said:
I was under the managed funds from companies like zurich were structure to avoid the 41% tax but I didnt look into them deeply as Im not really interested in the first place.
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Technically, the funds don't pay the 41% tax but the life assurance products using the funds do have to pay it.
 
Is there a template on what to record and what will need to be entered on tax return for ETF.

Last I saw there seemed to be some debate regarding calcs at time of return. Perhaps not for year 8 but for year 16.
 
faketales said:
Is there a template on what to record and what will need to be entered on tax return for ETF.
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Any use?
5

Thread 'ETF Tax Tracking SS'

Hi All

With all the discussions and commentary on ETF's and the deemed disposal tax headache, I have never been able to find a simple spreadsheet to track the purchases and tax that would be due.

To date I was thinking of just purchasing 1x or 2x a year to minimise the hassle and calculations involved, but I figured its not that complicated to calculate once its tracked effectively and I would prefer to invest monthly.

I have pulled together a spreadsheet which I think will do the task - would appreciate any input into this and obviously if it works then it could be useful for others on...
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Mine

FundTickerRatingAllocationYieldFeeStyleStrategy
Berkshire HathawayBRK.B
25%​
0.00%​
Lg BlendUS
F&C Investment TrustFCITSilver 5
15%​
1.59%​
0.56%​
LG GrowthGlobal (CORE)
Scottish Mortgage Investment Trust plcSMTGold 5
15%​
0.62%​
0.38%​
LG GrowthGlobal Tech
iShares Physical Gold ETCEGLN
7%​
0%​
0.12%GoldInflation Hedge
Monks Investment TrustJEOSilver 2
10%​
0.28%​
0.43%​
LG GrowthGlobal Large Growth
BMO Global Smaller Companies PlcBGSCSilver 4
5%​
1.13%​
0.60%​
Sml GrowthGlobal Small
Finsbury Growth & Income Trust PlcFGTGold 5
5%​
1.71%​
0.67%​
Mix GrowthUK High Quality
Individual Stocks23%
​
 
carolinka said:
Offsetting CGT losses is a solid strategy too.
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What does this mean, thanks!

Hi @Steven Barrett - can i clarify the below? (Quote function not working for me on your post):

"being invested in a slightly more expensive index fund is better value than a few selected shares that you have to manage yourself, do the trades, rebalancing and taxation on".

Focussing on money (value) - managing individual shares, dealing with tax, rebalancing is more so to do with spending your time rather than "value" i.e cost of individual shares versus an index. Could I clarify this with you please? Why is an index fund better value ( in monetary/cost terms) verus picking individual shares? Thanks!
 
jim said:
What does this mean, thanks!
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Being able to offset previously incurred capital losses against subsequent capital gains which isn't an option with investments subject to 41% 8 yearly deemed disposal and encashment/exit tax.

If you make a loss

This page outlines how losses affect Capital Gains Tax
www.revenue.ie www.revenue.ie
jim said:
Quote function not working for me on your post
Click to expand...

How to reply to or quote a post

To reply to a post, you just start typing in box below the post and then press Post Reply.
www.askaboutmoney.com
 
jim said:
Focussing on money (value) - managing individual shares, dealing with tax, rebalancing is more so to do with spending your time rather than "value" i.e cost of individual shares versus an index. Could I clarify this with you please? Why is an index fund better value ( in monetary/cost terms) verus picking individual shares? Thanks!
Click to expand...
Buying an index is set and forget. You don't have to do anything until you sell. The index rebalances itself, sells and buys positions without your input.

Doing that yourself, you have a battle against your own mind and greed. Not selling an overweight position in case it is the next Nvidia or not selling a loser because you don't want to admit you bought a bad company. Then there is the admin and taxes.

Buying on your own account is extremely difficult to do. Buying an index is very simple. When you have €20k an investment in an index gives you the diversification you need including access to the biggest companies in the world that you will struggle to get buying individual shares.
 
Steven Barrett said:
Buying an index is set and forget. You don't have to do anything until you sell. The index rebalances itself, sells and buys positions without your input.

Doing that yourself, you have a battle against your own mind and greed. Not selling an overweight position in case it is the next Nvidia or not selling a loser because you don't want to admit you bought a bad company. Then there is the admin and taxes.

Buying on your own account is extremely difficult to do. Buying an index is very simple. When you have €20k an investment in an index gives you the diversification you need including access to the biggest companies in the world that you will struggle to get buying individual shares
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Thanks. Theres an admin burden and a time committment to buying individual shares.

Is it better value though, in monetary/cost terms, to buying index versus individual? Not so sure.
 
jim said:
managing individual shares, dealing with tax, rebalancing is more so to do with spending your time rather than "value" i.e cost of individual shares versus an index.
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Every time you rebalance, there'll be transaction costs and it's a taxable event for CGT.
 
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