Save & Invest

Save & Invest

Most of us don’t spend enough time considering the implications of choosing a particular investment asset, until it goes wrong, by which time it can be too late. There are many options out there for people with money to save or invest. The terms, levels of risk and potential returns can vary greatly, and it can be difficult to build a portfolio that aligns with your own objectives and needs.

We can help you make the right choice. Whether you are saving money towards a goal or investing a lump sum, you need to ensure the product is right for you. We will help you identify your goals, attitude to risk, and analyse your current situation to determine what level of security you require.

What to Consider

  • Diversification - Your investment should be well diversified, in other words, it’s important not to put all your eggs in the one basket.
  • Liquidity - How quickly can you turn your investment into cash if you need money fast?
  • Guarantees – Is your capital secure and how much of it are you prepared to risk in order to get a better return?
  • Borrowings – Borrowings or gearing can have serious implications on investments. It magnifies the growth effect but greater losses occur if the value of the investment falls.
  • Knowledge – It helps to do a little research and to have some understanding of the investment and how it works.

Understanding & Managing Risk

We can help you to determine the level of risk you are prepared to accept with your investments – this is based on your own attitude towards risk, and your current financial situation. The main risks include:

  • Inflation Risk: this refers to a decrease in the purchasing power of your investment due to inflation. For example, if you are earning 4% on your investment, but inflation is at 3%, your purchasing power will only increase by 1%.
  • Return / Capital Risk: sometimes investments will not perform as well as expected or hoped, and many products are performance based, and do not guarantee a minimum return. It is also crucial to consider the security of your invested capital – many products will return 100% of your capital at maturity, while others may put part or all of your capital at risk.

A well-diversified and managed portfolio will reduce your exposure to risk. It is important to understand your needs, and the consequences of a change in circumstances may have on your finances.

Savings & Deposit Accounts

For clients who do not wish to invest in equity or property based funds we offer a range of deposit options. Our main deposit providers are Investec, KBC Bank Ireland and Permanent TSB although we can make arrangements with other providers at your request. All interest on deposit accounts is subject to DIRT at 39%.

Fixed Term Deposits: These are deposits are placed with banks for a particular length of time. The interest payable is credited to the principle at the end of the term. The most popular fixed term periods range from one month up to 2 years.

It is generally not possible to withdraw funds from a fixed term deposit during the term. Withdrawal rules vary from bank to bank and sometimes penalties will apply. Some banks will allow depositors to withdraw a certain amount from the account without paying a penalty.

Notice Accounts: These require the deposit holder to provide a certain amount of notice before withdrawing funds. Interest is usually paid on these at the end of each calendar year.

In recent years, people have become concerned about the safety of money placed in bank accounts. The Deposit Guarantee Scheme is operated by the Central Bank, and covers all amounts up to €100,000 if the deposit is held in a regulated institution which is covered by the scheme. The €100,000 applies per person, therefore a joint account can be covered up to €200,000.

Global Markets & Share Trading

There are now more ways than ever to participate in the stock markets and it is becoming more affordable. Some investors like to manage their own funds and one way of doing this is to invest in shares.

We recognise that shares play an important part in many investment portfolios. We deal with a number of preferred operators who can provide share dealing and stock broking services to our clients. Shares can yield handsome profits, and be traded at short notice, however values do fall as well as rise, so they are not without risk.

Lump Sum Investments

A lump sum investment plan is where you make an initial investment in your choice of funds. There is no obligation to invest any subsequent amounts. Normally the minimum initial investment is €5000. Some of the key factors to consider with a lump sum investment are the access you will have to your funds, timeframe and the level of risk involved.

We will help you reduce your exposure to risk, which can be done by investing in a capital guaranteed fund which secures your money or you might want to spread your investments over different funds of various risk levels. By investing in a wider range of asset classes you are increasing your diversification which can help to reduce your risk.

Savings & Investments FAQ

What are exit charges?
Exit charges are applied to some policies in the first five years. They are applied to dissuade the investor from withdrawing his funds from the policy during this time. We would recommend in the vast majority of cases that a client should be considering at least a five year investment term as most products are not designed for investment terms of shorter periods. Exit charges usually start at 5% of the fund value in the first year reducing to 1% in the fifth and no exit charges thereafter. These charges do however vary from company to company so you should contact us for more details.
Can I split my investment into different funds?
Yes. The majority of life companies offer a range of funds in each of their lump sum products and once you are invested you can switch between the funds according to your investment choices. There may be a charge for switching although the majority of companies offer a number of free options per year. Switching is not considered to be exiting the product and no exit tax is applied for switching out of a fund, once you remain invested in the product. Funds come with different risk levels from secure eg (cash) to highly volatile (eg concentrated equity funds) and the choices that are made depend on the investor’s appetite for risk. Some products do not offer an option to invest in different funds and these are generally funds which offer a capital guarantee.
Is there a minimum amount I can trade?
This depends on the stockbroker and the type of service you require from them. For online brokerages the minimum amounts tend to be less but each company has different values. It is possible to trade for €20 per transaction, but if you trade small amounts often, you can spend a lot on transaction charges.
What are the 'bull' and 'bear' markets?
Generally speaking a bull market occurs when share prices are increasing and a bear market occurs when share prices are falling. Bull markets are associated with investor confidence and bear markets tend to be prevalent during times of economic uncertainty.

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