Savings? What options now to ensure inflation protection?

banie01

Hiya folks.
Given the punitive Taxation measures taken against savers in the last few budgets along with the paltry interest rates on offer to the vast majority of Irish customers, I am just wondering how many or indeed if any of the users here are considering investing in Government Debt/Bonds as a genuine alternative to deposits for their fixed income portion of their portfolio?

Ireland's case in particular the hammering of interest deposit rates seems to have a twofold aim imo.
1: To try and force money out of savings accounts and into the economy via increased consumption as the cost benefit of leaving on deposit is basically eliminated via inflation increasing the attraction to spend now.
2: To stimulate direct investment in Irish government savings products such as those offered via An Post and give the NTMA more direct access to leveraged liquidity.

As a person with some savings and looking to protect those savings against inflation along with ensuring some Capital security, have we reached the stage where normal ''Deposit'' options available in Ireland are no longer fit for purpose?
Are Government issued bonds(as opposed to the An Post offered products) purchased directly on the market now a more attractive and indeed a more viable savings/Inflation protection option for a saver with a lump sum nowadays?

Just to clarify by Government bonds I mean any Government issued security of investment grade rating,not just Ireland.

mickman

They want you to invest it in the stock market cos a high stock market makes people feel good. They are busy trying to cause another market boom which will be followed by another bust

banie01

mickman wrote: »

They want you to invest it in the stock market cos a high stock market makes people feel good. They are busy trying to cause another market boom which will be followed by another bust

My question is aimed at those interested in securing and maintaining the real cash value of their savings in a low interest/high inflation environment.
People who are after a degree of security(Not that anything these days is that secure) that is not available from stocks and equities.
Stocks and equities have a place in any investment portfolio as does fixed income.
It is the fixed income strategy/portion of ones portfolio that I want to focus on.
Now that in Ireland, savings deposit rates and even NTMA certificate rates are below real inflation levels!
What strategies are folks planning to protect their savings and provide at least on par with inflation growth?

Browney7

banie01 wrote: »

My question is aimed at those interested in securing and maintaining the real cash value of their savings in a low interest/high inflation environment.
People who are after a degree of security(Not that anything these days is that secure) that is not available from stocks and equities.
Stocks and equities have a place in any investment portfolio as does fixed income.
It is the fixed income strategy/portion of ones portfolio that I want to focus on.
Now that in Ireland, savings deposit rates and even NTMA certificate rates are below real inflation levels!
What strategies are folks planning to protect their savings and provide at least on par with inflation growth?

If you were to buy 2020 government debt and hold to maturity the yield would be greater than 3% per annum. You'd have income and capital gains tax to worry about and you'd still have a risk of getting back less than you put in if you need to liquidate your holdings before maturity. Not many "safe" investments with a good return out there now

tommylimerick

i think you can buy us treasury inflation linked bonds but you will pay a premium for it
but at the moment there is hardly no inflation less than 2 percent i think
eddie hobbs had a article about this only 2 weeks ago
saying that the goverment was trying to get people to invest in property and the stock market again