Where can I get the most bang for my buck?

Regina2009

Hi guys,
I'd like to gauge what folks think are the best investment products on the market today.

I'd consider everything: Savings accounts, banks investment bonds,ETFs etc.

Basically I'd like to explore the alternatives before plowing my moneyt into a low-return savings account.

Anyone have any cash in ISA's?

iminireland

There are a few things you need to do to decide before you even consider what to invest in: How long you are prepared to put the money away for. Do you need access to all or part of this money? Are you prepared to risk some of this money in an investment, if so how much are your prepared to risk? Do you have any lending that should be paid off instead of investing (personal loan interest rates are 9%+ and credit card rates are even higher)?

When you know the answers to the above questions you can start to consider where you might invest.

What I or several other people think is a good investment on this forum may not be suitable or good for you. I've seen posts here saying investing in Glanbia or Kerry Group shares is low risk. This is just their opinion and I strongly disagree with their opinion that those shares or any shares are low risk but you might? Some people think Gold is the best investment to hold at the moment but you have to understand the price can jump 20% or more + or - within a few weeks. Can you tolerate that + or - if you invested in Gold?

After you have had a think about these questions talk to a few investment advisors and then you can make a more informed and educated decision as to where you invest your money. You should then decide whether you will invest on your own and do your own research or use a financial advisors help. It is very important that if you have lending or other investments that they form part any investment strategy.

PS. ISA's are a UK saving/investment product with tax incentives, they are not available in the Rep of Ireland. If you are in the North of Ireland they should be considered.

Regina2009

Thanks for the reply.
Yes, I have considred all these issues.
With regards to term, i was thinking about 1 - 3 years perhaps.
Did some research, and think maybe an investmnet fund may be the way to go.
In order to spread my risk etc.
Has anyone ever invested in these or would you bother?
Whos the lowest cost provider with regards fees?

iminireland

Your term is too short for an investment fund. You need to be looking at minimum of 3 years and some advisors would still say that is not a realistic time frame for investing in a fund. You still also need to consider how much you may be prepared to lose in a worst case scenario.

If you still want to consider an investment fund "Absolute Return Funds" are popular at the moment. These funds try and achieve positive returns above deposit rates over 3 - 5 year periods. There are a few providers of these funds in Ireland and they all have different risks and ways of investing. The main ones available are Standard Life GARS, New Ireland BNY Mellon Real Return Fund, Bloxham Midas Fund and Aviva Blackrock Absolute Return Fund. You can also invest in some Absolute Return Funds with capital security if you invest your money for a minimum of 5 years with no access.

All of the funds mentioned above invest in very different ways, some are extremely complex and the returns are extremely reliant on the skills of the manager. I would strongly advise you take professional advice from somebody who understands these funds before you invest in one.

In relation to fees you can get investment funds with a charge as low as 0.65% per year but cheap doesn't mean good, most of the funds listed above would probably cost in the region of 1.5% per year. Be careful of the charging structure if you invest as some will have early encashment penalties so you could lose say 5% of your money if you cashed in the fund within the first 3 years. You might be better looking for a charging structure that allows access without penalty if you did want to cash in.

As I stated at the beginning 3 years is probably too short, only invest a portion of your money you could leave for 5 years or more.

Regina2009

Thanks, thats great.
Do you hold any investment funds?
Where is best to buy from?Rabo

iminireland

Yes. I hold several different funds. I'm a broker so I buy through various sources.

Rabo is good, they are also quite cheap 0.75% entry buying and the same cost when your selling. They have lots of info about the funds they offer and you make your own decisions on which ones to buy. Last time I checked you have to do your own tax return for any profit when you sell. This may or may not be an issue for you.

Regina2009

Again thanks, terrific stuff!
Last question to close, would you recommend investment funds as a good option for
The first –time investor. I mean as a way to achieve some degree of diversification, and a decent return over the medium term.
Seems better than a Savings account to me.

iminireland

In my opinion funds are a better option than savings/deposit accounts if the money is not needed for a number of years. I would recommend if your starting out investing use only a portion of your money to begin with, you can always increase the amount later on.

Most investment funds are long only (so they only make a profit if the market goes up) whereas Absolute Return funds can go short and long (so they can make a profit if markets go up or down). You should also research High Yield Funds which invest in shares that pay dividends, a lot of analysts believe this will be the best type of share to buy over the next few years.

If you don't fully understand any of these funds and the risks involved you need to take advice before investing. Investing in cash deposits is not a bad thing either, you can get nearly 3% after tax with very little risk.

krd

Euro denominated, developing world bonds.

I've heard about them. I'm not sure where you can get them. They're higher risk. But the return is good, if you're willing to take the risk.

I'm not sure - I think the UK are doing denominated bonds - they may be doing Euro denominated. They're also doing an inflation indexed bond. So, in theory if there was crazy inflation, you wouldn't lose your capital.

Chinese Yuan might get a good return too. The US are putting pressure on China to revalue upwards...And the Chinese have said they're working on it. It's not that volatile. Still risky. But ....

radioactiveman

hmmmm the most bang for your buck....

wait until greece defaults then buy a highly leveraged euro bank stock It'll either turn out brilliantly or terribly but at least you'll know pretty quickly rather than savings account

seriously though you could average into a euro ETF..