100k to invest/deposit....not mine!

Bearcat

Ok, my late mother left 50k each in a trust for my two sons to pay for their education. I'm paying their school fees but I've lost 20k of it f-ing putting it into an investment fund of euro business with AIB. I pulled out the other day but have made money previously with another fund so I'm quits. All investments are now highly speculative hence I'm in cash.

With the times we are in as a trustee to the lads who are in their early teens, I just want to put their money some where that will be 100% guaranteed so at 21yrs old they'll be in a good position to get on the life ladder and pay for my retirement the way things are going!...(joke). I neither want to commit the monies long term either.

Any thoughts off hand?

Sonnenblumen

National Savings (various options) would seem the right albeit conservative choice with all the necessary protection and best deposit returns than would be available from commercial alternatives.

odnauq

taking advice from strangers on a public forum may not be a great option. Be careful!

turbobaby

Just remember that the govt can guarantee your savings, but they cant guarantee those savings will be able to buy anything when you withdraw them.

I would look at something linked to inflation... I don't even know if those investments are offered anymore though.

Bearcat

odnauq wrote: »

taking advice from strangers on a public forum may not be a great option. Be careful!

i appreciate it, I'm a big fella now but theres some great advice on these boards....hence the post.

OfflerCrocGod

Inflation is something which I would love to see in the eurozone but is highly unlikely to happen, especially with bank lending being so anemic and money multiplier falling like a brick.



With loan growth negative I can't see strong inflation taking hold.

Although of course the simple people will continue to squeal about HYPERINFLATION!!!1!!!!

turbobaby

OfflerCrocGod wrote: »

Inflation is something which I would love to see in the eurozone but is highly unlikely to happen, especially with bank lending being so anemic and money multiplier falling like a brick....................

Although of course the simple people will continue to squeal about HYPERINFLATION!!!1!!!!

Why in the name of God would you like to see inflation in the Eurozone? To erode all the unpayable debts? That is tantamount to daylight robbery of lenders and savers. Of course if you're in negative equity like so many of 'the simple people' you should pray all day for inflation.

And by the way, inflation is already here.

OfflerCrocGod

turbobaby wrote: »

Why in the name of God would you like to see inflation in the Eurozone? To erode all the unpayable debts? That is tantamount to daylight robbery of lenders and savers. Of course if you're in negative equity like so many of 'the simple people' you should pray all day for inflation.

And by the way, inflation is already here.

I'm not in negative equity. I realize that if a significant portion of the country is in negative equity it becomes a significant social and economic problem for the country. So inflation is one way to help people out of the odious trap.

No one has a God given right to earn a real return on their savings, the root of the current problems came from the glut of savings in the saintly Northern European countries flooding into risky investments in the peripherals. The reason this happened was down to the low returns that safe assets would generate, so they moved their capital into risky assets. Thing about risky assets is, they're risky.
The saintly savers want the returns but they don't want the risks, so we are left with a situation where the peripherals are being crucified so the over-saving North can get its savings back.

It takes two to tango, no one forced them to loan the money out. None of us here get bailed out if an investment we made goes sour so I see no reason why they should be bailed out. Inflation is a way of evening up the lopsided arrangement.

Interest rates are the cost of money and like any market they will plummet when there is too much money (savings) and not enough demand (safe assets/investments). If everyone acts like the sainted Northern Europeans expect negative returns, it's simple supply and demand.

Yearly inflation in Ireland is currently 1.3%, that's as close to nothing as you can get and the second lowest in the EU.

turbobaby

I agree that those who lent money out should of course not be repaid if it goe tits up. I donbt like how you vilify savers though. Savings and capital investment is how an eonomy grows. It's no coincidence that the successful european countries are 'savers'; Finland for example.

The european banks who lent to the periphery took out insurance on their 'risky' loans (CDS). We now know that because the problem is so bad, the issuers of the CDS (American afaik)will not be able to pay out on the insurance. Just like AIG in 2009. So rather than have for example, the Greeks repay in full, they have agreed to let them repay half and also not deem it to be a default. The CDS issuers are the big winners here (America again, no surprise). I believe the FED opening up the swap lines was a 'thank you' to the european banks to sweeten the deal.

In terms of inflationary numbers, they come from government bodies so I do not trust them.

OfferCroc, can you suggest an investment to the OP as we're getting off topic. I still say anything linked to inflation is the best option.

OfflerCrocGod

They would not be so successful if the recklessness of their lending were to properly rebound back on to them though. We bailed out core banks to the tune of tens of billions of euro. They can only export their goods to people who are willing to be in deficit to them, their economies grow as long only by putting other economies into debt. The internal economy is purposely repressed for the cause of greater export surpluses.

Either they accept that the surpluses must disappear or they will take haircuts on their debt, there are no other possible solutions.

Investment is only good when it yields a positive return and covers its cost of capital. Ireland is a case in point where too much investment is a massive mistake, we had large fixed asset investment which resulted in destroyed wealth. The housing bubble was investment lest you forgot.

I believe the best investment is one that returns the highest amount relative to the risk, specifically targeting inflation linked investments is narrowing down the possible universe too much.

turbobaby

OfflerCrocGod wrote: »

I believe the best investment is one that returns the highest amount relative to the risk, specifically targeting inflation linked investments is narrowing down the possible universe too much.

Get off the fence!

The OP is looking for particular examples, not a definition of what a good investment is. I give an example, you slag it off. Give your own example.

I will add that I consider blue chip stocks to be 'inflation linked investments'. The S&P has almost doubled from its low in 2009 mainly due to quantitative easing rather than any real recovery. As the dollar continies to lose value against real assets we should see the stock market continue to rise.

Feel free to agree with me on at least one thing. It's not so black and white.

OfflerCrocGod

Yes I agree stocks are adequate inflation hedges, not over the short term but over the long term (commodities can react faster but it takes time for product prices to change so stocks can lag)



Hence taking a multi-year measure of returns with different levels of inflation is best.

turbobaby wrote:

I would look at something linked to inflation... I don't even know if those investments are offered anymore though.

That's your idea of an example? Your blue chip recommendation (and the graph above would agree with you) is an example your first response isn't.

I would also recommend large blue-chips, well diversified 12 individual names minimum, as I get the feeling Bearcat isn't the kind of person who is best suited to adventurous investments.

clairedavies

Diversification is the key. Don't put all your eggs in one basket or over expose yourself to anything. 100k is a large amount of money and maybe you'd be happy just keeping it 'safe' or with a small return? How old are your children? How long until they are 21?

turbobaby

Yes, sorry I should have said inflation linked bond. My caveat is that the reported inflation rate is not based on actual reality, so the bond will not actually track true inflation levels.

OfflerCrocGod

turbobaby wrote: »

Yes, sorry I should have said inflation linked bond. My caveat is that the reported inflation rate is not based on actual reality, so the bond will not actually track true inflation levels.

It does appear to track the inflation figures from MITs BPP though. Let me guess, they're all in on it! The entire internet is on the giant conspiracy.

When people lie about the figures they get caught out.

turbobaby

OfflerCrocGod wrote: »

When people lie about the figures they get caught out.

Exactly. Enron lied and were found out. Lehman too. Greece lied. Same story. All these happened pretty quickly. I think it'll happen to the US. You don't. Let's just agree to disagree.

maddragon

Buy shares in McDonalds. 2.8% dividend this year and look at the graph of their share price since 1970.

http://finance.yahoo.com/echarts?s=MCD+Interactive#chart1:symbol=mcd;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

RXMPS

Bearcat wrote: »

Ok, my late mother left 50k each in a trust for my two sons to pay for their education. I'm paying their school fees but I've lost 20k of it f-ing putting it into an investment fund of euro business with AIB. I pulled out the other day but have made money previously with another fund so I'm quits. All investments are now highly speculative hence I'm in cash.

With the times we are in as a trustee to the lads who are in their early teens, I just want to put their money some where that will be 100% guaranteed so at 21yrs old they'll be in a good position to get on the life ladder and pay for my retirement the way things are going!...(joke). I neither want to commit the monies long term either.

Any thoughts off hand?

I wouldn't put any money into an Irish bank for the long term.

Know one know's what is going to happen with ous and the euro so it would be crazy to put a significant amount into an Irish bank.

What if we leave the Euro and your 100k get's devalued to 60k?

A good few european business that have been sold recently have agreed sale prices in US dollars, not Euro's.

IF I won the lotto in the morning know way would I leave it Euro's, I would be on a plane to america to open an account there and have it changed to US dollars.

OfflerCrocGod

turbobaby wrote: »

Exactly. Enron lied and were found out. Lehman too. Greece lied. Same story. All these happened pretty quickly. I think it'll happen to the US. You don't. Let's just agree to disagree.

They left the gold standard decades ago...

turbobaby

OfflerCrocGod wrote: »

They left the gold standard decades ago...

So did Greece.

What I was getting at is that confidence is lost very quickly.

Sonnenblumen

RXMPS wrote: »

I wouldn't put any money into an Irish bank for the long term.

Know one know's what is going to happen with ous and the euro so it would be crazy to put a significant amount into an Irish bank.

What if we leave the Euro and your 100k get's devalued to 60k?

A good few european business that have been sold recently have agreed sale prices in US dollars, not Euro's.

IF I won the lotto in the morning know way would I leave it Euro's, I would be on a plane to america to open an account there and have it changed to US dollars.

Isn't simply amazing how much blind faith people have in US$, few seem concerned at the mounting US debt c US 13.0 +Trillion, yes, that's a lot of billions, making € PIGS debt seem minor.

RXMPS

Sonnenblumen wrote: »

Isn't simply amazing how much blind faith people have in US$, few seem concerned at the mounting US debt c US 13.0 +Trillion, yes, that's a lot of billions, making € PIGS debt seem minor.

No other country in the world can generate revenue like the US.

Every country in the world is in debt, i am not an economist, but I do understand that, no goverment debt = no money.

HowFinancial

35% Stocks (25% blue chip/multinat brands in developed mkts, 10% emerging markets)
25% Bonds (5% sovereign, 20% Corporate)
10% Property
15% Commodities (energy, precious metals, industrial metals)
15% Cash ($, € & CHF)

Above asset split should give good starting point.
Unit linked investment products which give options to switch funds during investment term may also be of interest.

saywhatyousee

Buy a couple cases of Chateau Lafite Rothschild preferable 2003 or 2009 vintages they cost around 15000 for a case they increase on average 10% in value a year.There is always a market for rare fine wines especially when there rated a perfect 100

clairedavies

RXMPS wrote: »

What if we leave the Euro and your 100k get's devalued to 60k?

Gold is the greatest hedge against this - if you own gold and the euro gets devalued by 40% as the above example suggests you lose none of your buying power. The gold can be converted into the 'devalued currency', or any currency that you like for that matter.

Not forgetting the fact that if the euro were devalued in such a way the price of gold would inevitably rise... if we believe the history books anyway.

Sonnenblumen

RXMPS wrote: »

No other country in the world can generate revenue like the US.

Every country in the world is in debt, i am not an economist, but I do understand that, no goverment debt = no money.

Has China not replaced USA for top spot largets economy? US Govt deficit is enormous no matter what the US GDP is!