Question on risk mitigation

L

lop130371

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Hello,

I received about 300K of inheritance and plan to invest the funds in no didvidend stocks /ETF/Cash. I'm already maxed with the private penson have no debts etc.
My question however is related not to the investment per se, but how to mitigate the risks associated with the financial institutions (in case they fail) and would be thankful if someone could give me an optinion.

I was thinking of opening 3 accounts and put

1) 100K in raisin.ie on BFF that pays 4% yearly interest.
2) 100K with Degiro with a mix of accumulating ETFs and stocks .
3) 100K with Interactive Brokers with the exact mix of accumulating ETFs and stocks as point 2 above

I'm mainly worried about rasisin.ie it looks like they have awful reviews in Google.
Are there any other suggestions ?

Thanks
Luke
 
The 100k guarantee refers to bank deposits, savings and cheque accounts

Any amounts in shares, ETF are not covered by bank guarantees. There is a separate 20k guarantee for balances held by investment firms ie brokers such as Degiro, IB, Davy
 
lop130371 said:
accumulating ETFs and stocks
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I think you’re probably just making life difficult for yourself doing this. You’ll likely end up having to do dividend tax returns annually, maybe CGT too if you’re going to try and use the annual CGT allowance. Then you’ll probably need to rebalance those stocks too, across multiple accounts. Would you consider choosing a single ETF (World or US, whatever is your poison) and stick to that? No tax returns for 8 years, no rebalancing, no temptation to ‘daytrade’ the stocks if they do well/poorly.

As to your original question, I went with a DeGIRO and IB account to spread the risk.
 
Thanks JPD and Zenith63 , yes to make life easier I will invest mainly in a few well diversified accumulating ETFs so I won't need to do any calculations for 8 years or until I sell them as there will be no dividends paid. It's a pity that those ETFs are taxed so highly at 41% , I will do the same then: open a Degiro and IB account.
 
lop130371 said:
to make life easier I will invest mainly in a few well diversified accumulating ETFs
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FWIW I’d suggest one is more than enough to be very well diversified, again in the interests of simplification.
 
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Thanks Zenith but I don't understand where is the complication with having a few accumulating ETFs vs a single one. So If I buy 3 accumulating ETFs with each broker and stick with those for the foreseable future, it will still be very simple. I'm only worried about the taxation after 8 years or when I decide to sell one of them (if I do so before the 8 years)
 
Gordon Gekko said:
Why not buy a diversified portfolio of equities?

Better tax treatment for starters.
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I know that's an option but you will never get the same diversification that you would have with a ETF. You would need to have thousands of shares, then it really gets complicated to keep track of income and CGT generated by a high number of stocks
 
lop130371 said:
I know that's an option but you will never get the same diversification that you would have with a ETF. You would need to have thousands of shares, then it really gets complicated to keep track of income and CGT generated by a high number of stocks
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You don't need thousands of shares to get the same effective diversification.
 
lop130371 said:
Thanks Zenith but I don't understand where is the complication with having a few accumulating ETFs vs a single one
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I suppose the question might be why have more? The iShares MSCI World ETF is diversified over 1500 companies, will investing in an additional ETF achieve much, unless you want to dabble in the likes of the BRIC economies (in whichcase that's different). I guess I'm just making the point that coming from the world of buying/selling shares, people are tempted to think they need to have a basket of ETFs in their portfolio like World, S&P and EU ETFs. Wasn't sure if that's what you were getting at. On the more trivial side, it's a little easier to cast your eye over the price of a single ETF every month or two if you're interested in tracking it, your spreadsheet to track purchases will be a little easier to build and maybe somebody else can comment on the profit/losses side but my understanding is that you can only offset the losses in a single ETF against gains in that same ETF (?).
 
You can not set realised losses in an ETF against future gains in that ETF
 
What do you mean by "within the same transaction" ?

A share in a ETF is Sold or Bought?
 
lop130371 said:
I know that's an option but you will never get the same diversification that you would have with a ETF. You would need to have thousands of shares, then it really gets complicated to keep track of income and CGT generated by a high number of stocks
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I help my parents with their tax return. It’s dead easy because their investment advisers produce idiot proof tax packs. They have around 50 equities which as I understand it is plenty of diversification.
 
jpd said:
What do you mean by "within the same transaction" ?

A share in a ETF is Sold or Bought?
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Sorry what I meant was lets say you've bought a single ETF a number of times over a year (so no DD yet). You now sell all of them in one go, some are in a losing position, some are up. I assume you add up all the profits and subtract the losses to get to the profit that Exit Tax needs to be paid on?
 
Zenith63 said:
Sorry what I meant was lets say you've bought a single ETF a number of times over a year (so no DD yet). You now sell all of them in one go, some are in a losing position, some are up. I assume you add up all the profits and subtract the losses to get to the profit that Exit Tax needs to be paid on?
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Losses cannot be set against gains for Exit Tax.
 
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