Prize bonds, should I cash in?

joeirish

Some years ago I invested a largish sum in prize bonds. Over the years I have won a few €50 prizes which are re-invested. At the moment I have accumulated about €750 in 21 separate prizes each with it's own number over the past four years. I notice that 20 of these came from the original block and only one came from a re-invested prize. My question is whether to convert the individual prize bonds into another large block and if would this increase the likelihood of future prizes? It seems to me that if I have a large block of numbers when winning numbers are selected randomly then it is more likely one of these random numbers woudl match one of my large block of numbers than match any single number.

Mango Joe

I've read online discussions on this previously where people were indignant and adamant that there could be certain patterns in prize selection occurring - Based on geography, age of certain bonds, whether they're in smaller groups etc, etc.

No way! they claimed - sure these draws are brilliantly randomised by computer processing...... As someone who has a long career in IT behind them I can tell you for a fact that that it is most certainly possible like any other human driven process there is every chance that this is not being done correctly.

joeirish

Mango Joe wrote: »

I've read online discussions on this previously where people were indignant and adamant that there could be certain patterns in prize selection occurring - Based on geography, age of certain bonds, whether they're in smaller groups etc, etc.

No way! they claimed - sure these draws are brilliantly randomised by computer processing...... As someone who has a long career in IT behind them I can tell you for a fact that that it is most certainly possible like any other human driven process there is every chance that this is not being done correctly.

I too have had a long career in computing and IT nd I see where you're coming from. I always thought that a random generator of some kind was used and that would eliminate human intervention. Unless the random generator was deliberately skewed. Any analysis ever been done on the alloction pf prizes over time based on age, sex, location etc?

I was actually thinking of another angle. If I have a block of numbers, say 613 to 707 and then a few individual numbers say 834, 712, 601, and 12. If you were to draw a number randomly in the range 1 to 999 would there be more likelihood that the number you drew would match a number in my big block or one of the other individual numbers. Seems to me that there'd be a betterh chance of a match to the big block because if the number you drew was 706 that would be in my block but would be near but not the same as 712 which I also have.

noodler

The returns are practically zero.
Investing anywhere else on a low risk basis would be better imo.

gypsy79

noodler wrote: »

The returns are practically zero.
Investing anywhere else on a low risk basis would be better imo.

Rates are negative on government investments

noodler

gypsy79 wrote: »

Rates are negative on government investments

Prize bonds by their very nature cannot be negative.

Different from other state saving products

stronglikebull

joeirish wrote: »

I was actually thinking of another angle. If I have a block of numbers, say 613 to 707 and then a few individual numbers say 834, 712, 601, and 12. If you were to draw a number randomly in the range 1 to 999 would there be more likelihood that the number you drew would match a number in my big block or one of the other individual numbers. Seems to me that there'd be a betterh chance of a match to the big block because if the number you drew was 706 that would be in my block but would be near but not the same as 712 which I also have.

You're looking at it all wrong. Each number has the exact same chance of being drawn, no matter if you have them in a big block, small blocks, or individually randomised numbers. Pick one winning number from a range of 1-999 and it's a 1 in 999 chance of being any particular number.

To your original question

My question is whether to convert the individual prize bonds into another large block and if would this increase the likelihood of future prizes?

No, it would not. If you're keeping money in prize bonds then just leave it as it is. If you are unhappy with the small returns then you should consider investing in something, that is if you are willing to accept some risk.

gypsy79

noodler wrote: »

Prize bonds by their very nature cannot be negative.

Different from other state saving products

Thats the point i was making. Prize bonds may be best available

https://www.thejournal.ie/interest-rates-state-savings-reduced-5334827-Jan2021/#:~:text=The%20variable%20interest%20rate%20used,month%2C%20the%20NTMA%20said%20today.&text=The%20prizes%20have%20been%20reduced,%2C%20June%2C%20September%20and%20December.

Reading that again prizes were reduced so thinking about cashing in also!

gypsy79

Oscar Madison wrote: »

https://www.thejournal.ie/interest-rates-state-savings-reduced-5334827-Jan2021/#:~:text=The%20variable%20interest%20rate%20used,month%2C%20the%20NTMA%20said%20today.&text=The%20prizes%20have%20been%20reduced,%2C%20June%2C%20September%20and%20December.

Reading that again prizes were reduced so thinking about cashing in also!

The expected return is still 0.35% for prize bonds. This is still very high in the current climate in my opinion

namloc1980

noodler wrote: »

The returns are practically zero.
Investing anywhere else on a low risk basis would be better imo.

Prize Bonds are as low risk as you will get and still have a return of c.0.35%. Of course the return isn't guaranteed due to the nature of the return pool (random draw) but there is nothing else out there at the moment that will preserve capital and generate a return.

joeirish

stronglikebull wrote: »

You're looking at it all wrong. Each number has the exact same chance of being drawn, no matter if you have them in a big block, small blocks, or individually randomised numbers. Pick one winning number from a range of 1-999 and it's a 1 in 999 chance of being any particular number.

To your original question

No, it would not. If you're keeping money in prize bonds then just leave it as it is. If you are unhappy with the small returns then you should consider investing in something, that is if you are willing to accept some risk.

Thanks for the reply. This is not a question of prize bonds versus another type of investment. This is a question of what is the better strategy having decided to invest in bonds. It's not a case of the likelihood of a particular number being drawn, I get that. It's a case of the number been drawn matching with a number I hold.

I've been trying to find aan analogy to explain what it is I am wondering. Here goes.

Imagine a piece of ground divided into numbered squares. Some of these are my squares and others belong to other people. Mine are in a big block, the other folk own squares in smaller blocks or even individual squares. If I have a stone and I chuck it randomly onto the patch of ground (forget about gravity etc for this analogy) then would it not follow that there is more likelihood of it landing on one of my squares instead of one belonging to somebody else?

noodler

noodler wrote: »

The returns are practically zero.
Investing anywhere else on a low risk basis would be better imo.

I'll just clarify this.

I mean shares, not savings schemes.

joeirish

I just realised by some of the replies that my original heading is misleading. What I want to know is would it be better to combine lots of individual numbers into a larger block. Would there be more likelihood of a drawn number matching one of mine if I have big blick instead of lots of single numbers.

noodler

joeirish wrote: »

I just realised by some of the replies that my original heading is misleading. What I want to know is would it be better to combine lots of individual numbers into a larger block. Would there be more likelihood of a drawn number matching one of mine if I have big blick instead of lots of single numbers.

I know this doesn't answer your question bit I think that's rearranging deck chairs on the Titanic.

I had a substantial 5 figure sum in PBs for almost three years and got about 250 euro in wins.

A friend of mine has 3k invested in a medium risk and a low risk portfolio and that is up 600e in seven months. I am not 100% clear on fees and tax liability here but clear the net return still dwarves the PB return.

runawaybishop

joeirish wrote: »

Thanks for the reply. This is not a question of prize bonds versus another type of investment. This is a question of what is the better strategy having decided to invest in bonds. It's not a case of the likelihood of a particular number being drawn, I get that. It's a case of the number been drawn matching with a number I hold.

I've been trying to find aan analogy to explain what it is I am wondering. Here goes.

Imagine a piece of ground divided into numbered squares. Some of these are my squares and others belong to other people. Mine are in a big block, the other folk own squares in smaller blocks or even individual squares. If I have a stone and I chuck it randomly onto the patch of ground (forget about gravity etc for this analogy) then would it not follow that there is more likelihood of it landing on one of my squares instead of one belonging to somebody else?

Short answer, no. The chances of a number being selected are independent of other numbers. It doesn't matter if they are all single, a large block or a combination.

GreeBo

joeirish wrote: »

Thanks for the reply. This is not a question of prize bonds versus another type of investment. This is a question of what is the better strategy having decided to invest in bonds. It's not a case of the likelihood of a particular number being drawn, I get that. It's a case of the number been drawn matching with a number I hold.

I've been trying to find aan analogy to explain what it is I am wondering. Here goes.

Imagine a piece of ground divided into numbered squares. Some of these are my squares and others belong to other people. Mine are in a big block, the other folk own squares in smaller blocks or even individual squares. If I have a stone and I chuck it randomly onto the patch of ground (forget about gravity etc for this analogy) then would it not follow that there is more likelihood of it landing on one of my squares instead of one belonging to somebody else?

No , the only thing that increases your chances of winning is having more numbers/squares. Where they are is irrelevant.

Imagine in your scenario that you have 25% of all the squares, but you have them all in one corner. You can only possibly win if the stone is thrown in that corner, otherwise your chances are 0.
So assuming properly random numbers/stones then their relation to each other is irrelevant

GreeBo

I'd put any money into an accumulating ETF and be done with it.

stronglikebull

joeirish wrote: »

Would there be more likelihood of a drawn number matching one of mine if I have big blick instead of lots of single numbers.

The answer is still no. Combining individual numbers into a block will not increase your odds of winning. Only adding more bonds will increase your odds (or if people cash out and leave the pool, then your odds will also increase).

joeirish

noodler wrote: »

I know this doesn't answer your question bit I think that's rearranging deck chairs on the Titanic.

I had a substantial 5 figure sum in PBs for almost three years and got about 250 euro in wins.

A friend of mine has 3k invested in a medium risk and a low risk portfolio and that is up 600e in seven months. I am not 100% clear on fees and tax liability here but clear the net return still dwarves the PB return.

Thnaks. I lso haave friends who had money invested in mdeium risk investments and they are considerable worse off since the crash of 2008/2009. They have never recouped what they lost then. So all a gamble.

joeirish

runawaybishop wrote: »

Short answer, no. The chances of a number being selected are independent of other numbers. It doesn't matter if they are all single, a large block or a combination.

Thanks but that is still not answering my question. It's not the selecting the number, I get that bit. It's the matching of the number that was drawn with one I own. It is more likely if I own blocks of numbers than if I own lots of single numbers.

Allinall

joeirish wrote: »

Thanks but that is still not answering my question. It's not the selecting the number, I get that bit. It's the matching of the number that was drawn with one I own. It is more likely if I own blocks of numbers than if I own lots of single numbers.

You're over complicating things.

Only one number is drawn.
Forget about who owns the numbers.
Each number has the exact same chance of being drawn.

It makes no difference where the number is in relation to any of the other numbers.

joeirish

Allinall wrote: »

You're over complicating things.

Only one number is drawn.
Forget about who owns the numbers.
Each number has the exact same chance of being drawn.

It makes no difference where the number is in relation to any of the other numbers.

Ah but from my perspective it is about who owns the numbers! And when I look back over my winnings for the past 4 years I seen that 20 came from the large initial investment block I have and only one came from one of my €50 winning tickets. So it does seem that there is a greater chance of one of the numbers that is drawn matching one in a big block I have.

joeirish

GreeBo wrote: »

No , the only thing that increases your chances of winning is having more numbers/squares. Where they are is irrelevant.

Imagine in your scenario that you have 25% of all the squares, but you have them all in one corner. You can only possibly win if the stone is thrown in that corner, otherwise your chances are 0.
So assuming properly random numbers/stones then their relation to each other is irrelevant

But if the target is so much bigger (i.e 25% of the total) surely there is a bigger chance I would hit it?

Allinall

joeirish wrote: »

Ah but from my perspective it is about who owns the numbers! And when I look back over my winnings for the past 4 years I seen that 20 came from the large initial investment block I have and only one came from one of my €50 winning tickets. So it does seem that there is a greater chance of one of the numbers that is drawn matching one in a big block I have.

Of course more came from the block, as there were more numbers in the block to be drawn.

if there were 100 numbers, and you owned 25 of them.

20 were in one block, and 5 were random individual numbers.

You would have an overall chance of 25% that one of your numbers would be drawn. That should be all that matters.

If you were able to join the 5 random numbers to your block of 20, you would then have a block of 25.
Still a 25% chance of one of them being drawn.

If you split up your block, and ended up with 25 random single numbers, you would still have a 25% chance of one of them being drawn.

See the constant here?

Esel

joeirish wrote: »

But if the target is so much bigger (i.e 25% of the total) surely there is a bigger chance I would hit it?

You have been told (correctly) a number of times, with explanations, that the answer is 'No".

Please stop asking the same question in the hope of getting the answer you want to hear.

Zenify

I have been investing in prize bonds for years and always advised others to do so too. Yes I'm aware if I had invested in stock I would be far better off. Hindsight is a great thing though.

I am 99.5% sure there is something very strange with their randomly selected winners. Here is a few examples. My wife had 1 single prizebond for about 20 years, it never won anything. She applied to buy more and then the next draw that single prizebond won 50eur. I regularly buy them and have often found that a purchase can boost winnings of other batches and sometimes a purchase will stop winners too. I have also found big batches do far better than little batches. My current winnings are around 3,500 and have built up about 150,000 over 10 years. All 50eur winnings and one 500eur.

dxhound2005

Mango Joe wrote: »

I've read online discussions on this previously where people were indignant and adamant that there could be certain patterns in prize selection occurring - Based on geography, age of certain bonds, whether they're in smaller groups etc, etc.

No way! they claimed - sure these draws are brilliantly randomised by computer processing...... As someone who has a long career in IT behind them I can tell you for a fact that that it is most certainly possible like any other human driven process there is every chance that this is not being done correctly.

Up until 1993 the draws were done by manually picking numbers out of a set of revolving drums. Since 1993 it has been computerised. Throw your expert eye over Section 10 of the Regulations here, and see if you can spot any flaws.

http://www.irishstatutebook.ie/eli/1993/si/337/made/en/print

People who make up conspiracy theories demand proof that the system is not being manipulated. It is up to them to provide proof that that it is being manipulated. Otherwise they would send us down endless rabbit holes. No such proof has ever been provided.

Full results of every draw are published. Lots of information can be derived. One thing is that Dublin and Cork combined wins over 50% of the prizes in every draw.

davetherave

You are looking at it as throwing a ball onto a grid square of 10 rows and 10 columns. If you have a large block then yes for the purposes of throwing a ball then that would give you a larger chance of the ball staying in your squares if the ball was released in that direction.

For the purposes of a lotto or a random choosing you need to think of it as having 100 pieces of identical sized and weighted paper with the numbers 1-100 on them, placed in a bag, thoroughly mixed and chosen one at a time by someone not looking in the bag.

You may have numbers 1-25 but they can only be considered as individual numbers and the odds of 14 being picked at random are the exact same as 44 being picked. You having a continuous range has no consideration when each drawing is an individual number and an individual event.

joeirish

Esel wrote: »

You have been told (correctly) a number of times, with explanations, that the answer is 'No".

Please stop asking the same question in the hope of getting the answer you want to hear.

Sorry that a conversation you were not invited to join is annoying you. Now go away if you do not wish to contribute positively.

Thanks.

burkey2k0

joeirish wrote:

Thnaks. I lso haave friends who had money invested in mdeium risk investments and they are considerable worse off since the crash of 2008/2009. They have never recouped what they lost then. So all a gamble.

The previous 10 years has been one of the biggest rises of the markets in the history of the markets. I would not be following anything they are doing as indicative of the returns of wise investing. They are probably investing in single stocks as opposed to funds and making an absolute dogs dinner of it. Please do not look to them as an example.

joeirish

davetherave wrote: »

You are looking at it as throwing a ball onto a grid square of 10 rows and 10 columns. If you have a large block then yes for the purposes of throwing a ball then that would give you a larger chance of the ball staying in your squares if the ball was released in that direction.

For the purposes of a lotto or a random choosing you need to think of it as having 100 pieces of identical sized and weighted paper with the numbers 1-100 on them, placed in a bag, thoroughly mixed and chosen one at a time by someone not looking in the bag.

You may have numbers 1-25 but they can only be considered as individual numbers and the odds of 14 being picked at random are the exact same as 44 being picked. You having a continuous range has no consideration when each drawing is an individual number and an individual event.

yes I totally agree with what you are saying. But my question is not actually about random selection. I accept all that is being said about the randomness of selcting a number in a draw. What does not seem to have been answered is what happens next. Matching the randomly selected number with those I own. Now I get that the percentage of numbers I have in a draw is related to the chances of my winning. What I ws wondering was has anybody done any mathematical modelling the level of chance of this matching numbers I own in a given (mathematical) space and if that is a contiguous space is there a change in the odds of the drawn number matching those in the contiguous space. It's kind of related to linear probing of hsh tables in computing.

joeirish

burkey2k0 wrote: »

The previous 10 years has been one of the biggest rises of the markets in the history of the markets. I would not be following anything they are doing as indicative of the returns of wise investing. They are probably investing in single stocks as opposed to funds and making an absolute dogs dinner of it. Please do not look to them as an example.

Fully understand, my point was simply that there are always losers as well as winners in any gambling (and investment is gambling because we can never know 100% wht the future holds).

bullpost

gypsy79 wrote: »

Rates are negative on government investments

https://www.statesavings.ie/our-products/5-year-savings-certificates

3% return with no risk. Modest but safe and better than leaving it on deposit.

dxhound2005

bullpost wrote: »

https://www.statesavings.ie/our-products/5-year-savings-certificates

3% return with no risk. Modest but safe and better than leaving it on deposit.

Not great if you find you need to withdraw early. €1,000 becomes €1030 after 5 years. But after one year it is still €1,000, two years €1,002, three years €1,003, four years €1,005. I would take my chances with Prize Bonds.

dxhound2005

joeirish wrote: »

yes I totally agree with what you are saying. But my question is not actually about random selection. I accept all that is being said about the randomness of selcting a number in a draw. What does not seem to have been answered is what happens next. Matching the randomly selected number with those I own. Now I get that the percentage of numbers I have in a draw is related to the chances of my winning. What I ws wondering was has anybody done any mathematical modelling the level of chance of this matching numbers I own in a given (mathematical) space and if that is a contiguous space is there a change in the odds of the drawn number matching those in the contiguous space. It's kind of related to linear probing of hsh tables in computing.

Unless someone got in before the €250K cap, and has a few 10's of millions worth of bonds, their percentage is too small to look for the patterns you seem to expect. What percentage of the €4 billion do you own?

joeirish

dxhound2005 wrote: »

Unless someone got in before the €250K cap, and has a few 10's of millions worth of bonds, their percentage is too small to look for the patterns you seem to expect. What percentage of the €4 billion do you own?

OK but I'm not looking for patterns. Let's just leave it there.

Esel

joeirish wrote: »

Sorry that a conversation you were not invited to join is annoying you. Now go away if you do not wish to contribute positively.

Thanks.

I was not even slightly annoyed. You don't get to invite people to post in 'your' thread. Anyone can post. I did.
Also, you don't get to decide who should not post again.

joeirish wrote: »

yes I totally agree with what you are saying. But my question is not actually about random selection. I accept all that is being said about the randomness of selcting a number in a draw. What does not seem to have been answered is what happens next. Matching the randomly selected number with those I own. Now I get that the percentage of numbers I have in a draw is related to the chances of my winning. What I ws wondering was has anybody done any mathematical modelling the level of chance of this matching numbers I own in a given (mathematical) space and if that is a contiguous space is there a change in the odds of the drawn number matching those in the contiguous space. It's kind of related to linear probing of hsh tables in computing.

How does linear probing relate in any way to your question? There is no comparison.

The only way your 'block theory' would work in your favour is if your block comprises the full set of possible numbers.

noodler

joeirish wrote: »

Fully understand, my point was simply that there are always losers as well as winners in any gambling (and investment is gambling because we can never know 100% wht the future holds).

Generally, that is incorrect.

A diversified portfolio, that one of the banks would put your money in, grows in the medium term (the odd dip here or there notwithstanding).

I was risk averse like you but I wish I'd done the math earlier.

bullpost

dxhound2005 wrote: »

Not great if you find you need to withdraw early. €1,000 becomes €1030 after 5 years. But after one year it is still €1,000, two years €1,002, three years €1,003, four years €1,005. I would take my chances with Prize Bonds.

Yeah makes no sense for small amounts. And only for someone who wants to secure their investment. Anything beyond that has an element of risk.

mrskinner

Suppose there were 100 prize bonds. The odds of one prize is 1/100.

If I buy a block of 10 prize bonds the odds on one of these winning is 1/10. The odds on the winning prize bond in this block is a particular prize bond winning is 1/10.

So the odds on this particular bond winning is 1/10 multiplied by 1/10 = 1/100.

No difference!

Mango Joe

gypsy79 wrote: »

The expected return is still 0.35% for prize bonds. This is still very high in the current climate in my opinion

Is this really where we're at now? If you've €100,000 to invest you should be delighted to get a paltry €350 back as an investment return a year later?

Bearing in mind that the Financial Advisors lurking in the long, dark shadows of our Dept of Finance continue to habitually and regularly try and cut this back further and further to the bone while releasing details of same at 4am on the Sunday of a Bank Holiday weekend or whenever it is - How sneaky and underhanded can you get???

dxhound2005

Mango Joe wrote: »

Is this really where we're at now? If you've €100,000 to invest you should be delighted to get a paltry €350 back as an investment return a year later?

Bearing in mind that the Financial Advisors lurking in the long, dark shadows of our Dept of Finance continue to habitually and regularly try and cut this back further and further to the bone while releasing details of same at 4am on the Sunday of a Bank Holiday weekend or whenever it is - How sneaky and underhanded can you get???

They sound like really sinister people. But they are not very effective. The last time they got their wicked way was in August 2017 for Prize Bonds. And June 2016 for the other NTMA product.