Portfolio advice and critique for a beginner please?

N

nonoperational

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Hi guys, Grateful for some opinions please if possible. SOrry for it being my first post.

If one was in the position of having 250-300 k to invest what would you guys make of this plan:

50k An Post 5 year saving certs at 0.98% per anum
50k Merrrion 70 Maps multi asset fund
50k Cantor fitzgerald structured 90% protected momentum bond
20k Vanguard Euro gov bond etf
30k Vanguard S&P500 etf
20k vanguard msci world etf
20k vanguard msci euro etf
25k in a brokerage for forex trading where I consistently make 2-7% per year over the past 5 years
10k Apple stock

My risk appetite would be medium, ultimately I don’t need this money to live etc. But obviously don’t want to lose it.
Pension is already taken care of.
Day to day expenses taken care of by a good salary.
 
Do you have a house and mortgage?
What age are you?
What is your pension fund like?

Best is to complete this

Key Post - Basic information required for the "Money Makeover" forum

It can be difficult, but please try to use a meaningful title in your thread For example "27 year old with mortgage arrears". You will get a much better and much more coherent answer if you give as much information as possible in your first post. For example, if you give your mortgage rate, it...
www.askaboutmoney.com

Brendan
 
A few questions -

What is the asset allocation within your pension fund?
Are you maxing out your tax relieved pension contributions?
Do you have a mortgage? If so, at what rate?
What is your investment horizon?
 
Hi there thanks for the replies

The pension fund is a public sector pension and between my wife and I it is very good. We are lucky in this regard. Looking at a lump sum of over 500k and a yearly salary of about 200k between both of us. We are in our mid 30s now.

The horizon I guess initially is 5 years or so, we wont need this money again until we move to a larger house once we are more settled. The plan then would be to use some of it as a deposit.

Yearly salary in the household is over 200k at the moment.
No other significant borrowings.
Life insurance for 1million
2 children

I do have a mortgage at 2.9%. I know paying down the mortgage is the most sensible thing to do, but I also see this as something I really enjoy reading about and getting into. I love reading about investments and checking the markets etc. The mortgage payment per month of 1700 doesn’t really impact our finances massively.
 
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Well, it makes no sense to buy a fixed income product with an interest rate of 0.98% while carrying debt at a rate of 2..9%.

And it makes even less sense to buy a bond fund with a current (taxable) yield to maturity of around 0.06%.

There is a significant overlap between your chosen equity funds. The MSCI World index already captures Apple and stocks comprising the S&P500 and EuroStoxx 50 at market weight.

FX isn't an investment - it has an expected return of zero.
nonoperational said:
The horizon I guess initially is 5 years or so
Click to expand...
IMO that's far too short a time horizon for an investment in equity funds.

Finally...
www.irishtimes.com

Don’t invest in an ETF until you understand the tax

Exchange-traded funds may be less attractive than they appear due to onerous tax reporting requirements
www.irishtimes.com www.irishtimes.com
 
Thanks for the reply. Yes noted about fx. It’s just something I’ve been doing for a few years and have managed to turn 10k into 25 so far.

I’m in the happy position where money isn’t an issue for us at the moment and this is a an interest and something I want to learn more about as I have a large lump sum due again in a few years.

thanks for the replies so far. Appreciate it.
 
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You really should listen to Sarenco.

Clear your mortgage. And then have all the fun you like with your investments.

But people enjoy gambling. Even if it costs them a lot of money.

Investing is not gambling.

But borrowing at 2.9% to invest in equities is gambling.

nonoperational said:
Yes noted about fx. It’s just something I’ve been doing for a few years and have managed to turn 10k into 25 so far.
Click to expand...

I turned €100 into €800 by backing a horse once.

So what?

If you have turned €10k into €25k on fx after the costs, then you have taken some extraordinary risks.

Brendan
 
Pay down the mortgage rather than put anything at all into cash or bond or structured products since the payoff is better

2.9% mortgage rate needs to be paid from net income so you need to gross it up. At higher rates of tax you need to make around 6%pa to break even before costs which are going to be 1 to 2% pa in Ireland.
Good luck making those returns from low risk investments.

So pay down the mortgage and with what’s left make AVCs with a very high equity content. With a public sector pension you already have a substantial low risk portfolio so taking equity risk is less risky for you see here for analysis
https://globalwealth.ie/defined-benefit-pensions

Only then should you consider investing anything directly and then again with a high equity bias.

Gambling on FX isn’t investing and is a zero sum game with costs
 
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Don’t really get the attitude. I’m receptive and grateful for the advice and opinions. I wanted to invest an amount of money and asked for advice. I didnt want to hear anything, completely open minded. I gamble 25k on forex, grand, I gamble about 100k on sports every year also. I enjoy it. I was just asking for advice on a balanced portfolio for 250k to help educate myself on what it takes to build a successful balanced portfolio. Absolutely if money was an issue and extracting the last bit of long term value was a concern was my priority I’d pay off my mortgage. But its not. Apologies if this is somewhat against the spirit of the forum. I have 250k and I’m going to invest it and just wanted to hear peoples opinions on reasonable options.
 
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Your philosophy seems to be:

I don't want to pay off my mortgage because I want to play the markets.
I have a good salary and so I can handle the downsides
Paying off a mortgage is boring.

That would not be my approach, but I fully understand and accept the attitude.

I have taken punts on things. Others might be appalled. But, I enjoyed watching the race or the match more. And it was a small part of my overall wealth.

But...

nonoperational said:
50k An Post 5 year saving certs at 0.98% per anum
Click to expand...

is a very odd way to play the markets.
 
Congrats on your amazing position.

Not many in the country or world on that type of earning trajectory.

I imagine merrion and cantor have high fees.
The tax returns on ETFs will break your heart.
The low returning bond/cash like seem crazy.

Pay off the mortgage and you effectively make 6p.c.+1p.c. fees p.a. for rest of your life on the money. Or that's what another product would have to return.

Use the 1700 pm to max your pensions relief if applicable or gamble by picking companies to buy each month.

Your next due lump sum can go towards future house. Or more adventurous investment.

Rich folks stay rich by not spending or losing all their income. Most who play the market lose.
 
I had a reply typed and I was pretty certain I posted it and edited it a few times and its seems to have disappeared!!

No idea why the previous post was deleted?

Yes I completely appreciate I am on a great earning trajectory. I luckily have a skill that not many others do and it pays well.


Thanks to everyone for their advice and really excellent opinions. Very good advice and appreciative of it all.
 
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What university course or skill could you advise to younger people to study/obtain to follow in your path? Or would it remove your cloak of anonymity to explain that?
 
Fix your mortgage for the longest term you can at the lowest rate you can.
If your mortgage rate is 3% and your investments are returning more that 3% after taxes you made the correct decision.

Then open 2 brokerage accounts.
Put 250K into a MSCI world fund, don't go near it until you have to pay your taxes on it.

But the rest into the other brokerage account, this one is for your kicks.
Trade Forex, Options, CFD, Metals.
If you blow it up do, not re-inflate it with the contents of brokerage account 1, consider it a life lesson.

Enjoy it.
 
magpietribe said:
If your mortgage rate is 3% and your investments are returning more that 3% after taxes you made the correct decision.
Click to expand...

That is simply not correct.

If you have a mortgage rate of 3% , you are getting a risk free and tax-free return of 3% by paying it off.

If you can invest this borrowed money somewhere which will give you a risk-free and tax-free return of 3%, then fine.

But no such investments exist.

In the current uncertain world, any investment could fall sharply.

The OP should pay down their mortgage.

Brendan
 
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