I came across an article earlier in the week that I shared on Tuesday and it was about deposits in Ireland – How much is a deposit and their views on investing.
There is €147 billion on deposit in Ireland which is a very substantial amount.
There was a survey done by Aviva and they found that a small proportion of people would be too nervous to invest.
Approximately 25% of people didn’t really know what investing would entail and the majority of people wanted to build up a “rainy day fund” before they started to invest.
I completely agree with that, if you have a lump sum or if you have a surplus income you take out your rainy day fund, you take out anything that you’re saving up for.
You might want to buy in the next 5 years and then anything over and above that is money that could be considered for investment.
When you’re investing money you’re putting it in with an investment company, which creates an investment fund.
As a rule of thumb the higher the amount in shares and property the higher the level of risk within the fund.
Now from my own experience individuals in Ireland when investing in a pension will take some risk but when it’s outside of the pension and it might be money coming from a deposit they tend to be much more cautious.
So, from that point of view there are funds available with a partial capital guarantee or a full capital guarantee and what that means is that you get most or all of your money back depending on the investment that you choose at the end of the investment term.
And so when you’re making the investment you buy units within that fund.
When you are investing you need to factor in current market conditions such as now, we’ve seen a big drop in the markets this year and a lot of volatility so you’ve got to factor that into your investment decision as opposed to the sort of returns that you’re looking for.
The two are a balance really. You’ve got to factor in if you’re taking more risk when the markets do drop, that you’re going to take more off the downside.
So, you’ve got to factor all that into your overall investment decision.
If you found this article helpful and would like to learn more about how to protect your finances, feel free to connect and start a conversation or contact me directly at +353 (87) 778 5325☎️
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