Investing Advice: Are Stocks better than ETFs in Ireland?

[saachristian757]

Relatively new to investing, having only started a year a go and not invested much since Feb of this year, only adding BB to my Portfolio yesterday.

My plan is to invest €75-100 p/w.

I am looking for advice when it comes to Irish tax and Investing, is the Portfolio below suitable? I have been steering clear of ETFs having started out with purchasing them, the deemed disposable and higher exit tax has been putting me off. I have looked at possible investing in (BRK.B) Berkshire Hathaway as a make shift ETF as it's classed as a stock, or since I use Trading 212 to trade making use of their pies and creating my own 'personal ETF' and DCAing into that each week.

1. My main questions are is this an effective investing strategy in Ireland.
   
   (Buying 10-15 stocks each week DCA, and possibly cherry picking some if they look good which I did with GEVO and VUZI.)
2. Am I diversified enough, is there any area's that I have failed to invest?
3. Should I steer clear of ETFs entirely and focus on single stocks.
4. Are there any similar stocks to BRK.B that are effectively and ETF but are considered as a stock.

*All money invested is money that I am willing to lose, I have no debt and have a separate savings account outside of the market with 8 months expenses.*

Any general advice would be appreciated, and thank you in advance!

Portfolio:

Stocks:

AMC: 10%

VUZI: 10%

GEVO: 7%

NIO: 7%

BB: 7%

FUV: 5%

HVBTF: 5%

CCL: 5%

MARA: 4%

PLTR: 4%

ETFs: 15%

 

[beth12445]

@saachristian757 My strategy as an Irish person has been to dollar cost average into Berkshire Hathaway. It is very diversified like an index fund and is not subject to the deemed disposal. They don't pay a dividend so you don't need to pay income tax on those gains. Also, you may believe it has underperformed the standard snp500 index but after-tax, it is hugely in your favour.

 

[daniel001]

@beth12445 BRK has out-performed the S&P500 over the last 5,10,20 and 50 years. It slightly underperformed the market the last 3 years but not by much.

 

[noose]

@beth12445 Is the cost of the individual Berkshire shares not and issue. Currently around €280 each

 

[saachristian757]

@noose I can purchase fractional shares of Berkshire if I wish so I don't see the problem with the share being €280. Although while it is more diversified than a regular stock, its currently made up of a large proportion of Apple, (38.9%) with S&P and All World ETFs making up less than 0.2% of Berkshire.

 

[daniel001]

@saachristian757 Apple is only ~40% of Berkshire's investment portfolio. They wholly own a wide range of great businesses.

 

[saachristian757]

@daniel001 Oh yeah they do have a great range, as well as some businesses that private investors would never be able to get in on. I am just pointing out that it is currently very heavily weighted towards APPL. I personally wouldn't hold both APPL and BRK. Or at least not too much APPL

 

[startupchristian]

@saachristian757 US domiciled ETDs, UK ivestment Trusts and Berkshire Hathaway are your friends. I completely avoid UCITS ETFs due to deemed disposal.

 

[saachristian757]

@startupchristian Do you have any suggestions for some examples I could look into for some UK trust funds and US domiciled ETDs?

 

[startupchristian]

@saachristian757 MNKS, FCIT, BNKR are some diversified longstanding UK trusts to check out. VT is a world ETF.

 

[resjudicata]

@startupchristian How do you buy US ETFs? Who sells them? Do you need to file 1099? How do you deal with taxation?

 

[startupchristian]

@resjudicata You can buy them via options on IBKR or normally on Tastyworks. No need for any IRS forms. A 15% US tax on divedends is automatically withheld by the broker. A small price to pay to avoid deemed disposal.

 

[beamer]

@startupchristian

ns for some examples I could look into for some UK trust funds and US domiciled ETDs?

Can you suggest how to invest in UK investment trusts from Ireland please?

 

[panda01]

@saachristian757 Picking individual stocks isn't investing, it's gambling. Whilst deemed disposal is a pain in the ass, I think you will be far better off just investing in a simple all-world ETF like VWCE (personally I'd also keep the 7% BTC allocation).

It also doesn't make sense that you're concerned about deemed disposal (implying you have a long-term perspective for these investments, as deemed disposal won't be an issue for 8 years) and yet have multiple meme-stocks that will have crashed and burned long before that point.

 

[saachristian757]

@panda01 I was thinking of setting of a Pie on trading 212 and investing 100 a week in around 15 stocks so I am at least more diversified. This wouldn't be in the 'meme' stocks which I'll agree I have probably purchased a few of but all were for very low amounts

 

[panda01]

@saachristian757 Fair enough, I thought you had planned on buying more of AMC, BB etc each week. Which would be a terrible idea for long term investment. No real harm in having a small amount of your overall money in a few long-shot gambles.

If you were gonna go with setting up an investment pie of individual stocks on Trading212, I would aim to basically replicate the top few stocks on the S&P. You'll end up with all solid companies like Google, Apple, Microsoft etc. That wouldn't be my personal ideal, but its probably not a bad investment. Just definitely stay from trying to pick individual stocks by yourself, it's been shown time and again not to work.

The other thing is, trying to make your own little ETF of individual stocks may well be more difficult to work out your tax than just buying 1 ETF per week. If you bought 15 stocks every week, that's 780 purchases a year, versus just 52 (TBH, even buying once a month is likely to give pretty similar results and reduce the number of transactions you need to record even further). You'll need to look into exactly how tax is calculated on selling shares. I'm not 100% sure myself but pretty sure it's "first in, first out", meaning you will quickly end up having to keep track of a huge number of purchase dates and prices

 

[saachristian757]

@panda01 The only things I know about tax is that the CGT is 33% on Stocks while it's 41% on ETFs and you pay that after 7 years no matter what, which you don't need to with stocks.

Trading212 does send you an email each day you make a trade recording the price/shares/date you purchased so It wouldn't be too hard to calculate tax wise I assume.

One reason I am drawn towards stocks is that you can sell at a loss to offset against gains for tax purposes but you can't with ETFs. In an idle world I'd be looking for more stocks similar to Berkshire Hathaway that are similar to ETFs but classified as stocks.

Regarding the Pie it'd probably include 15 stocks with Berkshire taking up 10% then choosing 10-14 more stocks to help diversify, which is something I need to do.

 

[phoenix_spirit]

@saachristian757 https://github.com/leoncvlt/trading212-pie-sync

https://github.com/leoncvlt/etf4u

I use these two libraries to automate my ETF replication.
First one there is the one that does the balancing in T212 and the second one is the one that generates the csvs ingested by the first.

 

[startupchristian]

@panda01 Not true at all. Depends on your research and risk tolerance. Anyone invested in oil, natural gas, coal and uranium has made big gains in the last 6 months.

 

[emilyhall]

@startupchristian

Anyone invested in oil, natural gas, coal and uranium has made big gains in the last 6 months.

Very short time horizon there.

Anyone invested in oil companies for a 10 year period did badly