Ask HN: What is the best low-risk, passive way to invest 150,000 euros?

https://news.ycombinator.com/item?id=13237471

by valueprop • 10 years ago

22 20 10 years ago

news.ycombinator.com

For USA citizens, the choice is clear: index funds

For those living in Europe, what is the best low-risk, passive way to invest 150,000 euros?

Option A: conservative funds offered by local banks (90% bonds, 10% stocks for EU companies) Any specific banks or EU index funds that you recommend? Should EURO be avoided altogether, due to some EU members wanting to leave?

Option B: buy 1-2 apartments and rent (too much hassle)

See also https://www.quora.com/What-is-the-best-way-to-invest-150-000-euros

saltvedt• 10 years ago

We have index funds in Europe...

jklein11• 10 years ago

I think they were trying to give you context for tax purposes..

forgetsusername• 10 years ago

Option A...I guess.

Seems quite bond heavy though. If you have a choice, 60/40 stocks/bonds (preferably global, equal-weighted vs cap weighted for the stocks to take advantage of the higher growth of small and mid caps).

Let me say something about Option B: Being a landlord is not passive. There are many young people here, some who have made some good money, that buy and rent property. If they describe it as easy it's because they likely haven't owned the property long enough to have to pay for big maintenance projects, or long enough to have had bad tenants.

Investments are an efficient machine, and they don't produce easy money. The long-term real returns on real estate are steady and low. TINSTAAFL. Any advantages come from being able to leverage a down payment with a mortgage, which may or may not be possible for a rental property.

miguelrochefort• 10 years ago

Index funds.

BjoernKW• 10 years ago

ETFs.

GFK_of_xmaspast• 10 years ago

Are there no professional investment advisors in Europe.

Someone• 10 years ago

Define 'best'. What are your goals? For example, if you want to maximize expected ROI over decades, the answer will be different from the one when you want to maximize worst-case ROI over a year.

Also, "For USA citizens" isn't disjunct from "For those living in Europe", and "Europe" is quite diverse (even if one reads it as 'in the EU', tax laws may affect what's 'best')

Also, avoiding the euro may, depending on what you want to do with the funds, add exchange rate risks, with their pros and cons (higher variability of ROI). If you want to spend the money in what now is an euro country, I don't think there is a way to take exchange rate risks (either because of investing in other currencies or because of not knowing a possible euro exchange rate)

And I think option B should be disqualified as it doesn't meet your requirement of 'passive' (you know that, based on the remark 'too much hassle')

valueprop• 10 years ago

Thanks,

For Citizens in the EU.

While keeping a low risk, what are good options to maximize ROI for a ~5yr investment? (local bank conservative investment funds have a history of 2% for previous 3 years)

Thanks

bsvalley• 10 years ago

Short answer to your question, the best option is your Option B.

edblarney2• 10 years ago

Buy 1 (small) apartment in a place with very stable real-estate prices, and put the rest in Gold, Commodities Cash, Equities, Bonds.

If you are looking for risk aversion ...

sauronlord• 10 years ago

Second that.

Ideally buy a triplex or a fourplex and live in one of the units.

Depending on your location... you may be able to break even with 3 units rented and therefore allowing you to live free for the rest of your life.

DarkLinkXXXX• 10 years ago

I have to agree with Brian Bain on this one: Perhaps energy is a good place for you to look. Many solar companies should offer great returns for years to come and many oil and gas companies will likely be great buys this year as prices decline more.

edblarney2• 10 years ago

"Many solar companies should offer great returns for years to come"

Most solar companies offer abysmal returns. Major US companies have gone bust. Well run companies can blow up if the government changes policy on subsidies. In Ontario - the government just decided they would stop paying 82 cents/kw/h for solar, and dropped it to 50 cents/kw/h. Imagine what that would do to your balance sheet.

You can make possibly better returns, but it's not remotely 'low risk'.

Getting out of the 3% ROI range is quite hard while not getting into extra risk.

orasis• 10 years ago

Can someone explain why index funds are not an option?

aminozuur• 10 years ago

You can invest in US index funds such as the S&P500 as a European. Many people do. DeGiro is a good broker.

tkumarb• 10 years ago

https://www.raisin.com

Disclaimer: I work there

scawf• 10 years ago

max 1.05% ? wonderful choice

qwrusz• 10 years ago

Why can't those living in Europe also buy index funds? You don't have to be US citizen to buy them?

There are currency hedged funds if that's an issue for you.

ukoki• 10 years ago

90% bonds 10% stocks is ridiculously conservative. The person in the question is only 34 and planning to retire at 50-55. With a 20 year investment horizon you can have 80% stocks 20% bonds, and have an extremely low chance historically of not making a profit. ETF providers like Vanguard will sell you these funds for about 0.2% fee / year (watch out for hidden fees from local banks, anything over 0.5% is too much).

Personally I stick it all in US index funds and am averaging more than 20%/year over the last five years (although I'm not supposed to look at it).

id122015• 10 years ago

I think Europe is not a great choice. Ask Americans who visited it. And ask programmers who worked in Europe. Or ask Einstein. You will get the same answers.

Ask HN: What is the best low-risk, passive way to invest 150,000 euros?

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