Small amount to invest

tim3115

I was considering investing/saving a small amount of money, to the sum of 1k lets say. Is this too small? What can be done with it?

nesf

I'd personally open a savings account and keep building it up. In my experience having a few grand in a savings account in case of an emergency is a very good idea.

Either a demand or term deposit depending on what your needs are.

Can you see yourself needing this money anytime soon? If not, you could look into a savings cert or bond or something similar. That would tie up the money for a few years though, which might not suit you.

tim3115

Already have some money tied up in bonds from my younger days so not going to go that way again. A savings account was what I was thinking. What do you mean exactly by 'demand'?


Thanks.

CCOVICH

A demand deposit allows you to withdraw your funds with little or no notice period, and are 'open ended'. Term deposits generally require you to commit to leaving the money on deposit for a minimum period of time, you may not be entitled to withdraw money without notice or penalty.

Term deposits should give a better return, but in fact NR and Rabo demand accounts offer the best rates on the market today. AIB online has the potential to offer the best rate, but there are more ts and cs that exist with either NR or Rabo.

tim3115

Thanks for the replies,


I currently have a BOI current account. What are my options there?

CCOVICH

tim3115 wrote:

Thanks for the replies,


I currently have a BOI current account. What are my options there?

I don't think that BoI offer very competitive savings rates.

Your best option would be too set up a Northern Rock (3.05%) or Rabo Direct (3%) account.

AIB will give you 3% plus, but only if you have online banking (need a current account, on which they will charge you fees). So you could also close your BoI account and move to AIB, but this might not be ideal.

Otherwise, you could invest the money in something like a unit linked fund, but you would need to be willing to leave the money invested for 5+ years, and be willing to risk losing some of it.

Best to have some savings for the 'rainy day' before thinking about investing IMHO.

tim3115

Right, I think I'll just stick with BOI for convenience if you get what I mean.

bullrunner

you could also invest in the forestry funds... theres one every 6 mths..invest in blocks of 750eur for 10 years...they look like they are making around 6-8% per annum so far.

RainyDay

bullrunner wrote:

they look like they are making around 6-8% per annum so far.

What do you base this on, Bullrunner - Have they published their past performance figures?

bullrunner

they give estimated performances in each new prospectus. They also give some help to people who want to buy/sell existing shs by advertising the shs for sale for a time (free) on the website


www.irishforestry.ie

http://www.irishforestry.ie/forestry_investment_domestic_fip_overview.htm
gives some financial details about previous forestry funds (that are still in place)

RainyDay

bullrunner wrote:

they give estimated performances in each new prospectus.

Thanks - You're probably aware that this tells you absolutely nothing about how the existing funds are doing. That's one of several things that worries me about these funds - the lack of transparency. They don't publish the prices that shares are trading at either, so if you're selling your shares early, you're really nothing to go on. I'm also concerned about the conflict of interest, whereby the directors of the firm promoting the funds are also the directors of the firm providing maintainance facilities to the forests at a fixed price. I asked them for information to show that the price being paid to the maintainance firm was good value, but they failed to respond - Worrying....

bullrunner

they have some accounts published for most of the funds. you can calculate a share price from them. But thats only a net asset value...not what somebody is willing to pay for them.

RainyDay

bullrunner wrote:

they have some accounts published for most of the funds. you can calculate a share price from them. But thats only a net asset value...not what somebody is willing to pay for them.

Are these accounts in the public domain?

bullrunner

yeah

check this link
http://www.irishforestry.ie/forestry_investment_domestic_fip_overview.htm

press on the euro symbol

RainyDay

Thanks - Didn't realise they were publishing this information.

D'Peoples Voice

RainyDay wrote:

Thanks - You're probably aware that this tells you absolutely nothing about how the existing funds are doing. That's one of several things that worries me about these funds - the lack of transparency.

Well Rainyday, I don't wish to criticize these funds, as I have invested over EUR10K over the last few years, but I must admit that something looks odd.
Before IFSRA & disclosure requirements on investment companies come into force in 2001, the forestry company in question were saying theur returns were guaranteed to grow by 9%p.a. since the establishment of IFSRA and the introduction of disclosure, the word "guaranteed" has been removed, and has been replaced with "projected".

Now, every year they send out a annual report in accordance with company Law.The share price in each fund was increasing nicely in recent years, say 10% plus some years. In the last year, the growth on the 3 funds that I have invested in have only grown by about 4-5%. And according to their P+L, they made operating losses last year in all of my 3 funds.

Let me just say here, that it is possible that this is normal for them to be high profitable in the early years, loss making in the intervening years, and at maturity the big money comes in. I don't know but I'm just saying my funds over the past year have been quite low. perhaps at maturity when i average out the growth, it may equate to 8%-9% pa, but right now, I'm unsure.

bullrunner

they say in the brochures that the growth is based on certain assumptions...i've seen a few prospectus and don't ever remember ( but am open to correction) seeing any guarantees on growth.I also think there is an accounting convention that means that they cannot increase the value of an asset until it is sold (ie the forests)...hence the yearly losses (due to cash flow costs which they can account for). I think if you look at some of the older funds that you will see some big gains in the last year (because they can realise a profit on sale of forests)...


i am open to corrections on the above