You have likely considered the prospects of putting your money to a productive capacity by investing in financial assets instead of having your money sitting in the back and losing some of its spending power each year to inflation.
You may also be drawn to the idea of generating some passive income and having your money working for itself, or you’re interested in the idea of becoming an active trader. In order to get your portfolio started in Ireland, you can purchase some equity in a company by buying shares that will return a percentage of your investment.
When it comes to purchasing stocks, you’re going to want to know all about the trading process, tax implications and rules that affect Irish investors. That’s where we come in! This article aims to inform you how you can go about buying shares in Ireland and set yourself up for a financially secure future.
Understanding the Irish Stock Market
Regardless if you were born and raised here on the island of Ireland or you have moved here recently. , if you intend to invest in shares here, then you are going to want to understand the Irish stock market and the factors that influence it.
One of the cornerstones of the Irish stock market is Euronext Dublin which has a dated history dating as far back as 1793. This is the main access point for trading securities in Ireland, serving as an avenue for companies to reach investors across the world.
When buying equities in a company, you should be just as selective about the platform that you are using to purchase your shares.
Euronext Dublin definitely comes with a stamp of security, as it plays a role in the trading of more than 35,000 companies hailing from over 85 different countries. It also has a substantial user base.
The next thing you’re going to want to know before jumping in and acquiring shares is the four different markets that serve various types of securities and businesses.
Now, the idea of there being four different markets might seem confusing to a beginner, but it's actually rather straightforward once you wrap your head around it.
For starters, the Primary Securities Market is the marketplace for both Irish and international companies to trade in stocks and shares. Then we have the Enterprise Securities Market Index (ESMI), which appeals to emerging businesses looking to expand their presence.
The Global Exchange Market (GEM) primarily focuses on the debt market and lastly, the Atlantic Securities Market (ASM) is dedicated to companies that wish to dual list in Ireland and the United States.
As it currently stands, 50 companies have shares listed on the markets of the Irish Stock Exchange. The ISE offers both domestic and international membership for trading in various securities, including shares, ETFs, and Irish Government bonds. It uses world-class, easily accessible, and cost-effective trading and post-trade infrastructure.
While time is something that's super sensitive when it comes to purchasing stocks, it’s important not to get ahead of yourself and jump right into investing.
Make sure to take time to understand some of these aspects of the Irish stock market so that you are able to make more informed investment decisions and mitigate the risk involved in your transactions.
Choosing an Online Broker
Let’s move on to the next stage, which is involved in the process of buying shares here in Ireland. Shall we? Once you have exited the information stage and have a good understanding of the investment landscape, you’re going to want to find the right online broker for your investment goals.
There isn’t necessarily a right answer for what the best broker is; it really comes down to which one suits your needs and preferences best.
There are a number of great choices at your disposal, each with its own unique set of perks.
Goodbody Connect
One great broker that you can take, for example, is Goodbody Connect, which has been around the longest among brokers in Ireland and provides a secure and dependable share trading account complete with clear information on costs and fees.
One thing to note if you are considering using this broker would be that, like many others, they ask for a minimum account balance of €5000, so it’s likely a better option for those looking to invest a more significant sum of money.
Breaking down everything you need to know about investing in Ireland so that you can reach your financial goals.
Interactive Brokers Ireland
Another reputable option available for those looking for brokering here in Ireland is Interactive Brokers Ireland Limited which are overseen by the Central Bank of Ireland and are listed with the Companies Registration Office.
They provide account options for both traders and investors, such as individual and joint accounts.
It's important to remember that different account types have age restrictions. For instance, margin accounts require you to be at least 21 years old, whereas cash accounts can be opened starting at 18 years of age. If you are older, then this isn't something that will affect you, but it is an important consideration for those looking to get into investing from a young age!
Arriving at the Right Choice For You
With so many options with varying incentives and benefits to them, the decision process is far from an easy process. It’s important that you look inwards as well as outwards in order to arrive at the best choice for you.
You’re going to need to ask yourself important questions about what your investment goals are, how much you are considering investing and how adverse you are to risk. With a refined knowledge of what your needs are, the decision process becomes a lot easier.
One of the things that you might want to take into account is the reputation of the broker, opting for one that has a proven track record for exceptional service and the ability to offer positive testimonials from current clients.
From your correspondence and their digital footprint, you should be able to get a sense of the level of experience and knowledge in the Irish market; regardless of the value that your portfolio amounts to, it's important to make sure that they comprehend the risks associated with your investment objectives.
Curious about how to buy Bitcoin in Ireland? You'll be pleasantly surprised by how user-friendly trading platforms have made the process!
Steps to Buy Shares in Ireland
Armed with an understanding of the investment landscape here in Ireland and the right broker by your side, let’s take a look at the steps that you can follow in order to get some stocks added to your portfolio.
The first step is to get set up with a trading account. In order to do this, you’ll need to choose a trading platform and follow the verification process, typically involving you submitting a copy of your passport and answering a series of personal questions.
Once you have your account verified, you can add funds to the account. The amount that you choose to put into your trading account will depend on what your trading objects are, how risky adverse you are, and whether you choose to passively or actively manage your portfolio.
When evaluating whether a share is a good investment, start by analysing the company's financial health and market position. Look into the value of the shares on exchanges like Euronext and consider using platforms such as Degiro or eToro for detailed insights. Pay attention to the fees associated with trading, as these can impact your overall returns. Understanding the tax implications in Ireland is crucial, as it affects your net profit.
Utilise services from financial advisors like Goodbody to gather comprehensive information. Consider the market trends and the potential for growth in the sectors you are interested in. Finally, ensure your investment aligns with your financial goals and risk tolerance, using available tools and resources to make informed decisions.
By opting for the best trading platforms in Ireland, you'll pave the way for achieving your financial goals.
Managing Risk When Buying Shares
When overseeing your investment portfolio, it's crucial to grasp the risks at hand as the value of your investments can fluctuate in both directions.
In order for you to manage the risk associated with your investments, you can opt for funds that have been rated with lower risk levels. But if you are attracted to a higher return on investment, then you’re going to have to take greater risk on a fund that yields a greater return on investment.
In its most basic sense, you can think about buying stock as you are buying a slice of the company, how it performs will dictate the returns that you see. If you open up your account one day and see that your portfolio has grown to a point where you are happy to sell your shares, you can sell your slice for the market price of a share.
Keep in mind that if you make a profit from the shares that you sell, then you are going to need to pay capital gains tax (CGT). In Ireland, the tax is going to be 33% of the profit you make from selling assets like shares after deducting expenses such as acquisition and disposal costs.
Adjusting the weights of your portfolio is crucial for managing investment risk effectively. By diversifying your holdings across shares, funds, and ETFs, you can balance potential returns with risk exposure. Using platforms like Degiro and eToro, investors can access international markets, including Euronext, to buy and trade various assets.
It's important to consider the fees associated with each transaction, as well as the tax implications, to optimize your financial strategy. Services from Dublin-based financial advisors, such as Goodbody, offer valuable information to help tailor your portfolio.
By regularly reviewing and adjusting your investments, you can ensure alignment with your financial goals and risk tolerance, leveraging available tools and services to maintain a robust portfolio. Once you're all set to make your investment move, you have the option to go ahead online or give the broker's trading desk a call.
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