If you invest 500k and in the first year you lose 20k due to market crush or due to fund managemen fees - how should you react? Do you need to maintain the average balance?
Conversely, if things are going fund, can you take the profits out and only leave 500? I am talking about Stock market funds with liquidity in particular. Thanks.i
Please use the search. No, you do not get to withdraw but you also don’t need to add if the value changes
sorry I tried to search and didn’t find it.
Why don’t I get to withdraw? It’s my money to take out of the fund as I please. It’s an open ended fund with stocks and bonds.
My understanding is GV requires maintaining the cost basis. If the investment rises or falls that doesn’t change the cost basis. But withdrawing or adding money would change the cost basis.
You can withdraw but it could jeopardize your GV renewal. So if you want to renew, you shouldn’t withdraw.
You can indeed withdraw at any point. But you won’t get a renewal on your visa. They want you to invest a certain amount and not touch it for the duration you need the visa
what I am saying is that I keep the principal and withdraw the money I make every year
If you don’t touch he principal, the cost basis doesn’t change. So how does i jeopardize my renewal if I only take out the profit?
“If you don’t touch he principal, the cost basis doesn’t change. So how does i jeopardize my renewal if I only take out the profit?”
The few PT GV open funds are accumulating types. None that I know of issues profit distributions, rather these funds reinvest all earning (dividends, etc.). PT GV open fund investing is not suitable for income generation, please view it as a necessary but not necessarily profitable expenditure that with any luck returns your principal investment once you pull out after obtaining all the PT GV goals that you seek. Earning above your investment will be a nice bonus, any losses are simply part of your GV cost structure. (Of course, you could leave your investment intact after the required holding period ends if you feel like the market may recover any losses.)
If you get dividends that doesn’t change your cost basis.
If you sell you are reducing your cost basis. You can’t choose to sell “only gains”. That’s not how selling stocks works in any tax system I know of.
Further, these PT open funds are structured as mutual funds in which you hold shares. It’s not a separately managed fund in which each holding is registered to you (and maybe in that case one could sell off some split shares, or other scenarios, arguably without affecting the initial investment). Selling as a mutual fund share owner by definition constitutes a reduction in your original number of shares in that mutual fund, it’s the only manner of making any trade relative to your investment, and doing so jeopardizes your GV qualification.
that’s a very helpful explanation thanks!
The way I think about it - 500k invests over 7 years generates $300k+.
So I am not getting a bonus, I am losing at least 300k if I don’t get any returns above the fund’s related fee.
8% return from S&P500 seems pretty much guaranteed(i know I know, nothing is 100%) lol
Yes. I’m telling you that that is not generally understood to be possible and still get approval for renewal.
I wanted to understand why, looks like the other person was able to explain the reason why it’s indeed the case :(.
If that is the opportunity cost then the Art Donation option of 200/250k becomes a reasonable option. You eliminate the risk of the Portuguese market and the consternation of watching your investments underperform without being able to rebalance.
Interesting. Given the political uncertainty in the US, I don’t share the assumption that its market will necessarily outperform Portugal’s over the next 5 to 7 years. Still, I wonder if GV applications using one of the donation options might perhaps be looked upon more favorably than those using the fund option, and might therefore be processed faster or more reliably. Does anyone have evidence of that, or does it seem they’re all jammed into the same pipeline? Thanks.
To date no priority has been given by application type
Thanks, Peter – that’s a useful data point. I see that in that same thread there’s a link to an article claiming that under the new Solidarity (social investment) Visa “it will take less time for foreign investors to be accredited and obtain Residence Permits for Social Investment if the plan is approved.” Naturally, this claim is received on the list with a mixture of skepticism that it would in fact take less time, and outrage at the possibility that it might (and the new investors would jump the GV queue). From what I can find online, it appears the plan has been approved but the details are still being worked out…