Good or Bad time to invest

Jellybaby_1 · 04-11-2022 12:44am #1

I've no knowledge of investment but recently had a financial review with a well known company and was advised to invest a five-figure sum for five years. With the world at it is at the moment, looming recession, war, etc., would I be mad to invest such a large amount now? They gave me no other information about type of investment or risk, that information will be available if I decide to do it. Sounds scary to me.

57 views so far. Maybe I asked a forbidden question but as I said, I don't know anything about the subject and I'm in a quandary over this. Doesn't look like I can delete this so if there is a Mod around, please delete.

05-11-2022 10:16pm

If money has been sitting in a bank account for the last year, 10% has evapourated and more will follow through inflation. The money will never be worth what it was a year ago.

If money has been sitting in S&P 500 ETF for the last year, 20% has evapourated through falling stock values. But it is pretty much inevitable that over time the value of that fund will exceed the value of the money which was put into it a year ago after accounting for inflation. But if you need access to that money today, you've lost twice what you would have by putting it in the bank.

Maybe you'll double your money (or better) by the time you chrystallise your investment, or it may plummet 50% (or worse). No risk, no reward. But in general, stock market index tracking exchange traded funds over 5+ years are relatively safe statistically speaking.

Jellybaby_1 · 06-11-2022 12:15am

Appreciate your reply. Many thanks. I don't know what 'S&P 500 ETF' is though?

walterking · 06-11-2022 12:22am

If your money was in the s&p 500 etf the drop would have been about 6%.

It dropped almost 20% in dollar terms, but the dollar has strengthened almost 15%, so in EUR terms the drop in the market has been very cushioned.

Once the fed starts to talk of stabilising/dropping interest rates, the market will start moving up again.

Jellybaby_1 · 06-11-2022 5:24pm

https://www.boards.ie/discussion/comment/119839325#Comment_119839325

I'm still lost, but thanks anyway for replying.

Neames · 09-11-2022 11:38pm

https://www.boards.ie/discussion/2058270335/good-or-bad-time-to-invest

Have you cleared all high interest debts and your mortgage?

Have you maxed out pension contributions?

Jellybaby_1 · 10-11-2022 1:23am

No debts. Full pensions.

Ush1 · 10-11-2022 9:29am

What's the investment this company has advised?

No you shouldn't invest because you don't even know what you're investing in.

Jellybaby_1 · 10-11-2022 8:54pm

https://www.boards.ie/discussion/comment/119856056#Comment_119856056

I agree, that's why I made my mind up to do nothing.

Bobeagleburger · 11-11-2022 4:39pm

Good time to invest.

11-11-2022 5:13pm

https://www.boards.ie/discussion/comment/119858887#Comment_119858887

You should do your research in my opinion— exchange traded funds, long term performance of the various markets etc. There's plenty of information online. Your decision will be informed by how risk averse you are.

Bear in mind though that the only way to avoid making a mistake is to do nothing— but doing nothing is also an action, and can often be a mistake all of its own. Every action and omission of action has an associated cost, whether financial or an opportunity cost.

My long term investments are monthly payments to (Zurich) funds based on NASDAQ 100 & S&P 500. Average return over the past 3 years is about 2% or so after this year's hammering (it was running at about 26% a year ago). That's not much, but it's still much better than anything I'd get from any bank account or GILTS. Also, it'll be another decade before I touch them, so it would be amazing if the average return hadn't gone up a lot by then.

Neames · 11-11-2022 7:58pm

https://www.boards.ie/discussion/comment/119862305#Comment_119862305

Would you mind sharing the name of the Zurich Fund please?

04-12-2022 5:37pm

https://www.boards.ie/discussion/comment/119862916#Comment_119862916

-- Top Tech 100

-- 5 * 5 North America

05-12-2022 4:24pm

In the long run (10 years) you should be fine. But 2023 will probably be worse than 2022 so in the short run your investment might lose value but so long as you don't sell and ride out the storm you could see a return in the long term.

Jellybaby_1 · 05-12-2022 10:49pm

https://www.boards.ie/discussion/comment/119959832#Comment_119959832

Speaking for myself, there isn't much long time left at my age!

06-12-2022 2:04am

https://www.boards.ie/discussion/comment/119961578#Comment_119961578

The next five years could be volatile. Very difficult to predict.

If you choose to invest, I would play it safe.

Jim2007 · 06-12-2022 2:38am

https://www.boards.ie/discussion/comment/119858887#Comment_119858887

Doing nothing is actually doing something, it failing to invest which means you have actually chosen to loose money.

There is no good time to invest and there is no bad time to invest, there are just different approaches and strategies to accumulate wealth over time. None of these approaches involve trying to time the market because that is a fools game which you will loose!

You you have provided your advisor with a lot of personal information and presumably paid a fee to obtain their advice. If you are not going to take advice from someone in command of all the information then for heavens sake don’t seek advice from random individuals on the internet.

06-12-2022 7:32am

https://www.boards.ie/discussion/comment/119962172#Comment_119962172

"don’t seek advice from random individuals on the internet"

Completely agree, but feel the need to add that I analyse economic/financial risk professionally. I don't believe I've ever met anyone in Economics or similar who is "in someone in command of all the information".

There is data and inference. A heavy emphasis on the latter. Command is too strong a word, imo.

Jim2007 · 07-12-2022 12:23am

https://www.boards.ie/discussion/comment/119962264#Comment_119962264

And I spent 30+ years working in Swiss banking and I have heard every single dumb idea out there at one presentation or another.

And if you revisit what I wrote, I was referring to the personal data of the client, I don’t give a toss what the economic analysis of the next five years is, it will not change a thing for me.

07-12-2022 12:51pm

https://www.boards.ie/discussion/comment/119965883#Comment_119965883

Revisited. Still think the notion that anyone has a "command of all information" is laughable.

dxhound2005 · 07-12-2022 2:54pm

Doing nothing, as in leaving it on deposit, should not be dismissed either. If someone is able to live their life comfortably, without ever having to deplete the savings entirely. Someone will inherit it, as happens with vast amounts of such assets.

It gives the security of having the funds guaranteed, either by the financial institutions participating in the guarantee scheme, or by the State in the case of State Savings. And generally instant access, and no anxiety about how the stock market or crypto etc is performing. And certainly no fees to enrich the intermediary. Horses for courses.

Saudades · 09-12-2022 10:16pm

https://www.boards.ie/discussion/comment/119966854#Comment_119966854

I read it that he was referring to the financial advisor having a 'command of all the clients information' - age, planned retirement date, risk profile etc.

Not a command of all information in the financial market.

daithi7 · 25-12-2022 2:58pm

Ok some basic rules of thumb for investing:

-Pay down debts first

- invest in yourself as your first priority (education, job, business, welfare, health, etc)

- invest in your network 2nd

- with any further investments , only invest what you can afford to lose

- 1/3 in equities,(passive etfs or investment trusts (cos of Irish tax laws), 1/3 in property & 1/3 in cash is a pretty good rule of thumb imho.

- don't invest in anything you don't understand

Is it a good time to invest in equities? Well it's certainly a much better time than 12 months ago, it may not be as good a time as 6 months hence (but nobody can be sure of this, and if they are, they're total spoofers), but given that long term real returns are now forecast to be ~4.5-6.5% after this 12 month correction period , it's probably not a bad time , considering everything....

Good luck.

TomJohnJimGer · 26-12-2022 1:43pm

https://www.boards.ie/discussion/comment/120033201#Comment_120033201

Hello,

In somewhat of a similar situation to OP, where I have come into some money (low 5 figures)

My first quandary is should I invest or pay down mortgage. Current mortgage is ~60k, <3% interest - so it’s not onerous.

Second quandary then is where to invest, if I was to do so. I think I would be looking at some sort of managed fund? I’m not a financial expert in any way… (Appreciate the comments that I need to speak to a financial advisor, and I will do before I do anything)

As for the ‘can afford to lose’ - it would annoy me to lose it, but I’d still manage away if it did disappear.

But interested to hear opinions here - especially as to the pros and cons of invest or put money into mortgage

Thanks in advance folks…

Oh, yes, this is my first post on boards. Would love to be able to trot out the “first time poster, long time lurker” line but to be honest, that would be a total lie 🙁

Bobeagleburger · 26-12-2022 2:06pm

https://www.boards.ie/discussion/comment/120033201#Comment_120033201

Max out pension contributions also before investing.

No point using money that you have paid ~50% tax on to invest in shares when you can get 40% tax relief on gross earnings.

It's basic, but the amount of people that don't factor it in is astounding.

Donald Trump · 26-12-2022 2:16pm

https://www.boards.ie/discussion/comment/120034767#Comment_120034767

Depends on the years to retirement and the tax you will be paying when taking it out too.

MyStubbleItches · 26-12-2022 11:05pm

https://www.boards.ie/discussion/comment/120034789#Comment_120034789

Not to mind that most will be considering relatively small sums to invest which might not make a massive difference to a weekly pension.

Jim2007 · 26-12-2022 11:35pm

https://www.boards.ie/discussion/comment/120034789#Comment_120034789

The key is to take the tax savings and invest that as well. That will give you a very big jump start on the annualized return. Instead most people blow the savings on something they can’t even remember 18 months later.

Jim2007 · 26-12-2022 11:38pm

https://www.boards.ie/discussion/comment/119977361#Comment_119977361

Exactly.

Donald Trump · 27-12-2022 12:29am

https://www.boards.ie/discussion/comment/120036651#Comment_120036651

My point was to the example of someone close to retirement who is going to retire on an income which will be above marginal tax rate anyway. Yes they will still benefit from the return on the delayed tax portion, but if they are close to retirement then that factor won't be as beneficial.

The people it is really beneficial for are those with a long time to retirement and who might be paying top marginal rate now but would not be paying it after retirement.

doubledouble · 05-01-2023 3:35pm

Has anyone looked at this ? Morgage just paid off end of 2022. Have some cash sitting in the back earning zilch. https://www.zurich.ie/corporate/company-pensions/master-trust/?PPCCorporate&gclid=CjwKCAiAh9qdBhAOEiwAvxIok3XWgTf-VI_0NxZyqzW4CPv1E2fecbjNWJxxTHf55t_IL24wkwWypRoC1aAQAvD_BwE

Good or Bad time to invest

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