To clarify, the article says that " the government stressed that as part of its plan, it is considering intermediation and accreditation. This means that it will take less time for foreign investors to be accredited and obtain Residence Permits for Social Investment if the plan is approved." So even if the plan as a whole has been approved, I have no idea whether “intermediation and accreditation” will be part of it.
There is no political uncertainty in the US, absolutely none. And will 90% likely to outperform Portugal, like it always does. Take it to the bank, let’s be real.
That said, you math is off, it’s still better to lose 300k over 7 years, rather than in one day.
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That’s just the historical average over a very long time period (much longer than 7 years). The sequence of returns is much more uncertain.
But I agree that even if the US/world markets tank you’re not very likely to get superior returns from investing in listed equities in Portugal. Private equity may outperform though.
This is true. If you drop €250K in a day you only have €250K more invested outside Portugal for the 7 years than you would have had if you invested in a fund. Assuming an annual return of 8% outside Portugal your opportunity cost would be about €178K.
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You’re joking, right? (And it wasn’t my math, it was a previous poster’s.)
Not at all. Everything is growing, inflation is going down, markets skyrocket. Noone is really concerned about wars in 2025 anymore. People were worried before, given escalations. But all the news are pretty positive for the upcoming presidency.
yep we are in full agreement 
Not to derail us too much, but the Trump admin has seriously threatened immediate, widespread tariffs and invading/annexing both Canada and Mexico, among many other things. I’m not sure what world you’re living in
If you honestly believe the US is going to invade or annex Canada and/or Mexico, you should probably move to Portugal ASAP lol
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Fund vs Art Donation:
- 500.000 in Portugal needs to return 2%-3% / year over 7 years to break even after fees.
- 250.000 in US equities need to return 12% / year over 7 years to break even on the 250.000 donation.
So, decide:
- can you get better than 3% in the Portuguese funds?
- Will you need to hold for longer than 7 years where the donation is one time and done?
- Is the stress and tax burden of funds greater or less than the stress of giving money to a museum?
US return rate drops to 8% if you can invest 300.000 in US equities and donate 200.000
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And after currency fluctuations, which could be significantly larger cost (or profit) than the fees.
(Assume comparison is between unhedged PT <> US markets)
Just for fun, since I invested in 2021, my Portugal fund has returned 9.4% per annum; the S&P total return over the same period is 12.0% pa.
Since I invested in a Mercan property, the return is 0% (assuming they honor the buyback).
But at least the investment was only 280k. If I’d known that publicly traded funds were an option, I might have gone for those at 350k at the time. But at the time I investigated, all I found were privately managed closed funds.
I agree, you must be from another planet. Where I live we haven’ heard of such thing. But everyone around me is pretty normal… so let’s agree to disagree.
Congrats. I do expect something like 5% after 2% fees, at most, on average. Post covid recovery was an outlier in your case, probably. But let’s hope for he best!
How do we incorporate the total management fee over 8 years into the opportunity cost? 2% fee on 500.000 is 10.000/year. Therefore minimum cost of management fees are 80k over the 8 years. But if the funds grow at 8% then so do the management fees.
Am i thinking about this correct that if Fund Management costs 100.000k over 8 years then the donation option opportunity cost is 250.000 - 100.000 = 150.000 ?
yes, ballpark. Of course it assume thy wouldn’t beat the the S&P500 growth. The idea of management fees is supposed to be that Warren Buffer-like figure gives you much higher returns, so it’s worth paying them. In this case, there is a small chance they beat the average but it’s more likely that it underperforms. so I’d say more like 250,000-50,000=200,000