Would I not be wiser to buy into a fund for diversification?
Agree. Also, as you build up your portfolio (by buying €10,000 worth of one company's shares every 6 months or so), you should avoid over-concentration, in terms of geography (e.g. don't just buy Irish shares), industry sector, etc. From a tax perspective, it's probably best to buy shares that pay a low dividend. Some companies use their spare cash to reduce the number of shares outstanding rather than pay it out in dividends. For someone in your position, they're a better bet than high dividend-payers.
No, I don't bother with bonds. So I don't know anything about them.
You can invest a rainy day fund in equities as you can access the money very quickly if you need to.
Brendan
It certainly goes against the standard advice to keep a rainy day fund in cash - Brendan’s view on this subject is very unconventional.Does that not somewhat go against investment advice?
Well, I don’t think it’s a terrible idea but any subsequent drawdowns would obviously be taxable.I'm curious what people think ofour idea of investing via non-tax-deductable payments to your pension.
You are already well diversified with your home and your pension fund. Investing €10k in one share will not change your overall portfolio or risk.
You don't need to buy €1,500 worth of shares every month. When you have €10k buy one share. When you next have €10k buy a second share.
No need for research. Just buy a few of the bigger company shares and forget about them.
Brendan
I don't think this is standard advice. Buying one of any share instead of a basket absolutely decreases the diversification of your portfolio.
Take two Irish shares I semi picked at random today and twelve years ago.
Bank of Ireland: €17.22, now €4.84
Glanbia: €4.55, now €16.30
Bank of Ireland has decreased by three-and-a-half times and Glanbia has increased by three-and-a-half times.
Choosing Glanbia over Bank of Ireland would have seen your return vary by a factor of ten! This is not unusual for individual stocks, and is why it is generally advised to buy a basket.
Just remember, under current tax rules, if you invest more in your pension that you can get tax relief on in a given year, you can carrt that forward and claim tax relief in future years. So you benefit from longer tax free compounding within the pension, and if in a year or 2 you have less money you take a break from contributing to pension and claim a tax refund on the but you've carried forward.I'm finding it hard to put money in when im not getting the tax benefit
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