How to Invest in the Stock Market in Ireland?

What is stock market investment?

Investing in the stock market involves buying financial securities – mainly stocks or bonds – with the aim of making a profit in the medium or long term. These securities are traded on financial markets, where buyers and sellers meet.

Investing in the stock market allows you to become a shareholder in a company (through shares) or a creditor (through bonds). In return, the investor can receive income (dividends or interest) and hope for a capital gain when reselling the securities. This type of investment is therefore a way to grow your savings by taking advantage of the development of companies and the economy.

Unlike speculation, which relies on short-term operations that are often riskier, investing in the stock market is a long-term strategy. It requires a good understanding of how markets work, accepting a degree of risk, and diversifying investments to limit exposure to losses.

What are the different accounts for investing in the stock market in Ireland?

To invest in the stock market in Ireland, it's essential to have an appropriate investment account to hold your financial assets (such as stocks, bonds, ETFs, etc.) and to manage your transactions. In Ireland, several types of investment accounts are available, each with its own tax implications, advantages, and suitability for different investor profiles.​

Here's a comparative table to help you understand the different investment account options in Ireland:​

Once you've decided on the type of account that suits your investment goals, you'll need to select a financial intermediary to execute your trades. Here are the main options available in Ireland:​

• Online Brokers: Platforms like DEGIRO, Interactive Brokers, and eToro offer low-cost trading options and access to international markets. They are suitable for investors who prefer to manage their portfolios independently.​
• Traditional Stockbrokers: Firms such as Davy and Goodbody provide personalized investment advice and comprehensive services, which may be beneficial for investors seeking professional guidance.​
• Robo-Advisors: Services like Moneycube and MyWallSt offer automated investment solutions based on your risk profile, making them ideal for those who prefer a hands-off approach.​
• Banks: Some Irish banks offer investment services, including access to mutual funds and pension products. These may be convenient for customers who prefer to keep their banking and investing under one roof.

What to Invest in on the Stock Market?

The Stock Market offers a wide range of financial products allowing you to diversify your portfolio according to your objectives, risk appetite, and investment horizon. Here are the main types of assets in which it is possible to invest:

Stock Trading

Stocks represent a share of a company's capital. By buying a stock, you become a shareholder and can receive dividends (a share of the profits) as well as hope for a capital gain on resale if the price increases. Stocks are investments with high potential returns, but also high risk, as their value depends on many factors (company results, economic situation, geopolitics, etc.).

The best stocks to invest in on the stock market depend on your goals and investment style. Thus, you won’t invest in the same stocks whether you are looking for a regular return or a significant capital gain.

• For a steady return: we will favour the most stable stocks such as Astrazeneca, Total or McDonald's.
• For a significant capital gain potential: we will favour growth stocks such as Tesla, NVidia, Apple or Airbus.

Our Opinion

Stocks are suitable for investors willing to accept market volatility in exchange for potentially higher long-term gains. Sector and geographic diversification is essential to limit risk.

ETF (trackers)

ETFs (Exchange Traded Funds) are index funds traded on the stock exchange. They replicate the performance of an index (such as the ISEQ 20, the S&P 500 or the MSCI World) by investing in all the securities that make it up. ETFs are traded like stocks, in real time, and allow for broad diversification at a lower cost.

Our opinion

ETFs are particularly suitable for beginner or intermediate investors wishing to easily gain exposure to a market or sector, without having to choose each stock individually. It is an excellent tool for long-term passive management.

Unit Trusts

FCPs are collective investments actively managed by professionals. They pool the savings of multiple investors to create a diversified portfolio, according to a defined strategy (stocks, bonds, mixed, thematic, geographic, etc.). Unlike ETFs, they are valued once a day, and their fees are generally higher.

Our opinion

Unit trusts are designed for investors who prefer to delegate the management of their portfolio to experts. They are well suited to those who wish to benefit from a structured management framework, at the cost of a return often lower than ETFs, due to fees.

Obligations

Bonds are debt securities issued by governments or companies. By buying a bond, you lend money to the issuer, who undertakes to repay you at maturity, with the payment of regular interest (coupon). Bonds are generally less risky than shares, but offer a more moderate return.

Our opinion

Bonds are an essential component of a balanced portfolio, particularly for cautious investors or those nearing retirement. They help stabilise overall performance and ensure regular income.

How to invest in the stock market when you are a beginner?

More and more young people are getting into stock market investing these days, but there's no age limit to starting in this field. However, as a beginner investor, it's necessary to take some precautions before getting started.

• The simplest solution is to entrust the management of your investments to a third party whose job it is, such as a financial advisor or software specifically developed for this purpose, such as a robo-advisor.
• It is also possible to make your own investments on the stock market, but in this case, it is preferable to take the time to train yourself and take an interest in how the markets work before you start investing your money.
• As an investor does not become profitable overnight, it is also preferable to not invest money on the stock market that you may need to live on or to meet unexpected expenses.
• Similarly, it is necessary to put in place a precise investment strategy and ideally in the long term by setting achievable goals and taking risk into account.

When to Invest in the Stock Market?

While it's possible to make stock market investments at any time, it's essential to know how to spot good opportunities before buying securities. To determine if it's the right time to buy a stock or stocks, you should ask yourself these simple questions:

• What is the current economic situation? Is there growth, or are we in a period of crisis?
• What level of risk are you willing to take? An investor with a high risk appetite will frequently find interesting opportunities in the stock markets, while a cautious investor will prefer to wait before investing.
• What is a stock market value really worth? The intrinsic value of companies listed on the Stock Exchange must be defined in order to know if it is the right time to acquire the securities.
• When does the company pay its dividends? Finally, if you have opted for a yield strategy with shares allowing you to receive a dividend, you must hold these shares no later than the day before the ex-dividend date.

Why Invest in the Stock Market?

Investing in the stock market offers numerous advantages for growing your wealth, protecting your capital against inflation, and diversifying your income streams. Here are the main reasons to invest in the financial markets:

• Grow your savings in the long term: Stock markets have historically generated attractive returns over several decades. Regular, long-term investment allows you to benefit from the growth of businesses and the economy.
• Protect your capital against inflation: Uninvested savings lose value over time. By aiming for a return higher than inflation, the stock market allows you to maintain or even increase the purchasing power of your capital.
• Generate passive income: Some stocks pay regular dividends. Bonds pay coupons, offering a stable income to the investor.
• Diversify your assets: The stock market can complement real estate investments or secured savings products.
• Good diversification reduces exposure to a single type of asset or risk.
• Easily access global markets: With online brokers and ETFs, it is possible to invest in thousands of companies around the world. This allows you to position yourself in different sectors, geographical areas and levels of economic development.

Good to know

The stock market is a powerful tool for investors ready to adopt a long-term vision. Well managed, a stock portfolio can become a lever for sustainable growth and a pillar of your wealth strategy.

Which broker to choose for investing in the Stock Market in Ireland?

To invest in the stock market, it is essential to go through an approved financial intermediary, called a broker. They transmit your buy and sell orders to the markets. The choice of broker directly influences your investment experience, the fees you will pay, the products accessible and the tools at your disposal.

Here are the main categories of brokers available in Ireland, with their characteristics:

Expert's Opinion:

• An independent investor who wants to diversify at a lower cost will favour an online broker.
• An active trader will opt for a CFD broker, being aware of the risks.
• A beginner or long-term saver will prefer automated management with a robo-advisor.
• Finally, a cautious profile or one attached to their bank will use a bank broker, despite higher fees.

How Much Money Do You Need to Start Investing in the Stock Market?

The amount of money needed to invest in the stock market will depend on various factors, especially your personal financial situation. Here are the rules to follow if you want to get started:

• Invest a portion of your savings in the Stock Market: it is important not to put all of your savings into your stock market investments. You should keep a portion of your savings to use in case of need. Ideally, if you can, keep 20% of your capital in a secure investment or a traditional savings vehicle and invest 80% in the Stock Market.
• Investing in the Stock Market with a small budget: it is entirely possible to invest in the Stock Market with a small budget. It is not necessary to have a large amount of capital to start building a stock portfolio. 500 to 1,000 will be enough to create the basis for it, and you can then reinvest your income from dividends or capital gains to buy new securities.
• Don't put all your eggs in one basket: while the stock market is attractive in terms of return and investment, it is necessary to spread the money you invest in the Stock Market by ensuring that your portfolio is diversified. For example, you can invest part of it in stocks, another part in one or more funds, and another part in bonds.

Investing in the Stock Market with a small budget: our tips

If you are a beginner investor and want to invest small amounts in the stock market, you have two solutions:

• Invest your current savings: this is possible from 500
• Invest a small amount each month: you can also freely make payments to your stock market investment accounts, such as a securities account, to gradually fund it.

What taxes apply to stock market investment income in Ireland?

In Ireland, income generated from stock market investments — such as capital gains, dividends, and interest — is subject to taxation. The applicable tax treatment depends on the type of income and the financial product involved.

1. Capital Gains Tax (CGT)

• Standard Rate: 33% on profits from the sale of assets such as stocks or bonds.
• Higher Rate: 40% for certain foreign investment products that are not declared within the required timeframe.
• Annual Exemption: Each individual benefits from a €1,270 tax-free allowance on capital gains per year.
• Loss Relief: Capital losses can be offset against gains of the same nature within the same year or carried forward to offset future gains.
• Payment Deadlines:
• For disposals made between 1 January and 30 November: tax must be paid by 15 December of the same year.
• For disposals made in December: tax is due by 31 January of the following year.

2. Dividends

• Dividend Withholding Tax (DWT): 25% withheld at source on dividends paid by Irish companies.
• Additional Taxation: Gross dividends are taxed at the investor’s marginal income tax rate (20% or 40%), plus PRSI (4.1%) and USC (up to 8%).
• Tax Credit: The amount withheld through DWT can be credited against the final income tax due. If excess DWT was paid, a refund may be claimed.

3. Interest Income (Deposit Interest Retention Tax - DIRT)

• Rate: 33% withheld at source on interest earned from savings accounts held by Irish residents.
• Reporting: Interest received must be reported on the annual income tax return.
• Exemptions: Some individuals, particularly those over 65 who meet certain income conditions, may be exempt from DIRT.

4. Investment Funds (including ETFs)

• Tax Rate: 41% on gains made from the sale of fund units and on income distributions.
• Specific Regime: ETFs and other collective investment funds are subject to a distinct tax regime, which is often less favorable than that of individual shares.

Our 5 Tips for Investing in the Stock Market

• Set achievable goals: any self-respecting investor must set financial goals for their various investments. These objectives will depend on the purpose of the investment. Is it to prepare for retirement, finance a purchase or a specific project? A motivating objective will be an engine that will allow you to dedicate yourself to your investment with passion.
• Learn about the stock markets: good knowledge about the stock markets and how they work is essential if you want to make profitable investments. So take some time each week to inform and train yourself. There are many online training modules allowing you to learn analysis methods and you can also consult targeted financial news feeds.
• Favor a long-term investment horizon: unless you are an expert in the financial markets and want to speculate in the short term in order to generate maximum profits in a short time, it is more prudent to invest with a long investment horizon. Speculation presents many risks that you can avoid with progressive investment.
• Know your risk tolerance: you must define as precisely as possible the level of losses and variability of your capital that you are prepared to assume. Remember here that the higher the potential return of an asset or market, the higher its level of risk will be. A strong aversion to risk should direct you towards the least risky instruments such as bonds or certain secured funds. If you have a high tolerance for risk, you can try riskier investments such as stocks or cryptocurrencies.
• Don't let your emotions get the better of you: finally, investing in the stock market is an activity that can generate all kinds of emotions such as stress, infatuation or fear. A good investor must not let these feelings make him make bad decisions and must always keep his initial strategy in mind and stick to it.

Looking to invest in the stock market independently? Join a reputable online broker today and start placing your orders on the market.

All our guides on stock market investment

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.