Taking The Plunge Into Investing - Any Thoughts On My Strategy

J

justme

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Hi All,

Recently my financial situation changed for the better and I had money to invest as a result. I'm new to investing and was too cautious to go it alone, so I have an amount of money being invested on my behalf with a professional broker which is split between 2 actively managed options. However, I don't like the fees I'm paying (1.5%, when you do the maths over 15years it's a lot to pay!). I'm going to give it a go myself with an online account and leave the two run side by side for a few years and see how they compare.

I'm going to set aside 250K for this experiment. I already have small accounts going with Interactive Brokers, Degiro and Saxo. I've just been playing around with small amounts to see how I like them. So I'll pick one of them and then my plan is just to keep it simple. I'm going to spread 250K across Berkshire-B, JAM Investment Trust and maybe one other, I'm avoiding ETF's because of the taxes. Then, I'm just going to leave it alone and see what happens. I'm looking at this as 15-20 year investment

I'm already set up financially. I have a nice, regular, relatively passive income. I own my house and I have some property etc. with no loans and a small new company starting up making a few quid. If I lose all this money, it won't hugely effect my life. I'm not including that info as a brag, it's just to add context to the post and point out that I know investing is a gamble, but it's one I can afford to take. If things go really bad, I'll be okay.

I'm intentionally trying to keep it as simple as possible. I'm not looking for very specific advice on here (although it's welcome). I suppose I'm just throwing my strategy out there like someone would ask a friend to proof read a proposal / presentation to see if I have omitted any thing important.

Thanks for taking the time to read.
 
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What are securities, are they just regular stocks / shares? I rather something like Berkshire or JAM because they are more broad ranging to give me some diversification. Kinda similar to an ETF without the tax implications. If I were just to pick one or two regular stocks like Coca Cola and Amazon, I dunno would I feel as comfortable picking stocks like that.

And I believe a US Estate Tax is regarding the transfer of an estate upon ones death, in America, but I'm not sure how it's relevant here.
 
Securities is broad term to include shares .

You will find better explanations online elsewhere of us estate tax but highly relevant to you given your large investment. It doesn’t just apply if die in US.
 
Buy say ten or 15 good shares when they are cheap and keep them forever.[My two cents]!
 
DK123 said:
Buy say ten or 15 good shares when they are cheap and keep them forever.[My two cents]!
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Thanks for the advice. Now if you could just advise me on 15 good shares that are cheap, I'll be eternally grateful!
 
You've got two general camps

1. Value Stocks - Stocks that pay a steady dividend annually to share holders
2. Growth stocks - No dividends all about growth, think Tech stocks

The most popular ETF is the S&P 500 tracker, which just tracks the performance of the S&P500 index (largest 500 companies), it is usually the cheapest way to get broad based market exposure (concentrated in the US).
 
DublinHead54 said:
You've got two general camps

1. Value Stocks - Stocks that pay a steady dividend annually to share holders
2. Growth stocks - No dividends all about growth, think Tech stocks

The most popular ETF is the S&P 500 tracker, which just tracks the performance of the S&P500 index (largest 500 companies), it is usually the cheapest way to get broad based market exposure (concentrated in the US).
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I tend to side with value investing as a strategy. However, that requires a little more knowledge about picking and choosing stocks than just following the S&P or buying a broad ranging ETF. My broker would be deemed a value investor and that's the approach he is taking.

I'm not keen on growth stocks for the long haul. I think tech is over valued and that when the crash comes it could wipe out many years of gains. Which makes me wary of the S&P because it appears propped up by tech stocks. That being said, when is ever a good time to get into the S&P. Throughout history people have probably always thought the same thing, yet the S&P (if you are leaving your investment in long term) has always recovered and gone up to the right. That's why I'm willing to give JAM a go.
 
The only thing I would say is that Berkshire and JAM are US focused. What about European and Asian exposure or a proper global investment trust. The US can do badly for long periods too, Japan was the 1980s and way outperformed the US then
 
justme said:
Thanks for the advice. Now if you could just advise me on 15 good shares that are cheap, I'll be eternally grateful!
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I have 10 shares that I track on the FTSE 100. Look at them every day, dip in and out of them on a regular basis. Read all their news, trading statements, outlook, RNS news etc. Majority of them are good dividend payers.

Today I will decide if I will sell one particular share or wait until it has it's trading statement tomorrow. Sometimes a share runs up in price before it's trading statement and then drops when it is announced. Buy the rumour sell the news type of thing.
 
Interesting
joe sod said:
The only thing I would say is that Berkshire and JAM are US focused. What about European and Asian exposure or a proper global investment trust. The US can do badly for long periods too, Japan was the 1980s and way outperformed the US then
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Thanks, that's a very salient point. I hadn't actually looked into the individual companies in Berkshire yet, of course I will do my due diligence before investing money. I will do some Google research to look for a list of investment trusts and find a good globally diversified one. Thanks for that input, that's helpful.
 
Laramie said:
I have 10 shares that I track on the FTSE 100. Look at them every day, dip in and out of them on a regular basis. Read all their news, trading statements, outlook, RNS news etc. Majority of them are good dividend payers.

Today I will decide if I will sell one particular share or wait until it has it's trading statement tomorrow. Sometimes a share runs up in price before it's trading statement and then drops when it is announced. Buy the rumour sell the news type of thing.
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Thanks for the input, that's a little more active than I intend to be. A lot actually. I don't think I have the knowledge or the desire to be that involved. Ideally, I will pick two or three diversified investment trusts and sit back and try to forget about them. Maybe making slight adjustments over the course of the years.

Perhaps a few years down the line, I'll be more knowledgeable and confident in picking and choosing stocks more actively.
 
I just decided the same last month, I split 3 ways. The third I choose was Allianz Technology Trust but if you're not feeling like investing in Tech you could try just 2 or some other IT.

Edit: I wanted to say that the Irish Department of Finance should be sacked after making the most tax positive way of diversified investing in Ireland involve paying The United Kingdom stamp duty directly.
 
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boomshine said:
I just decided the same last month, I split 3 ways. The third I choose was Allianz Technology Trust but if you're not feeling like investing in Tech you could try just 2 or some other IT.

Edit: I wanted to say that the Irish Department of Finance should be sacked after making the most tax positive way of diversified investing in Ireland involve paying The United Kingdom stamp duty directly.
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Interesting. What platform are you using? I'm thinking of going with Interactive Brokers, maybe just because they seem to be running a long time and are very established. There's something a little unnerving to handing over 250K into an online account having never actually had any dealings with the people! Any money I've made in the past, I've always been able to look the person in the eye when I'm doing a deal!
 
justme said:
Thanks for the advice. Now if you could just advise me on 15 good shares that are cheap, I'll be eternally grateful!
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Investment advice is said to be either 'useful bad advice or useless good advice'

Buy XXX shares, is useful bad advice, in that you can do exactly that, but bad advice because who knows if XXX will prosper.

Buy the stars of the future when they are cheap, is useless good advice, who knows which are the stars of the future, but no doubt they will prosper.

'Buy shares in great companies at a good price' is I believe the Warren Buffet quote. It is no doubt good advice, and it is not completely unusable. Ignoring price, some companies have a better record than others at increasing sales and profit, the best of these can be considered great. No doubt they are never cheap, but if you follow their prices there are times when they available at a good price.

'Buy shares in great companies at a good price', Is not perfect advice, but it has real value and it is free.
 
justme said:
Interesting. What platform are you using? I'm thinking of going with Interactive Brokers, maybe just because they seem to be running a long time and are very established. There's something a little unnerving to handing over 250K into an online account having never actually had any dealings with the people! Any money I've made in the past, I've always been able to look the person in the eye when I'm doing a deal!
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Yes I used Interactive Brokers (IBKR) after reading that they are apparently the most robust broker with a very safe approach, and holding their own assets. I also got a referral link from a friend which gives the new signer 1% of their investments up to 100k USD back as IBKR's own stock. So why not get an instant 1% return I thought. My amount is 1/3 of yours FWIW. Still have my own mortgage to overpay and pension to use, I do like that it is much simpler than having to deal with deemed disposal / higher tax % and also tracking each and every deposit when investing in ETFs.
 
What is jumping out at me is your lack of knowledge in what you are doing. It's very hard to pick individual stocks, so don't do it. When you do due diligence, what are you going to do? Remember, when you are buying, you will most likely be buying off a fund manager who has done a lot more due diligence that you and will sell it to you at a higher price.

Seeing as the tax tail is wagging the dog, invest in investment trusts and forget about them.

If you invest in quality companies, you are doing anything but gambling. You are investing your money and it will grow in the long term. Invest in bad companies, you will indeed be gambling and will most likely lose your money. Best of luck with it.
 
boomshine said:
Yes I used Interactive Brokers (IBKR) after reading that they are apparently the most robust broker with a very safe approach, and holding their own assets. I also got a referral link from a friend which gives the new signer 1% of their investments up to 100k USD back as IBKR's own stock. So why not get an instant 1% return I thought. My amount is 1/3 of yours FWIW. Still have my own mortgage to overpay and pension to use, I do like that it is much simpler than having to deal with deemed disposal / higher tax % and also tracking each and every deposit when investing in ETFs.
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Thanks for that. Have you got a referral that I can use for IB?
 
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