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Good or Bad time to invest

  • 04-11-2022 12:44am
    Registered Users Posts: 808 ✭✭✭Jellybaby_1

    I've no knowledge of investment but recently had a financial review with a well known company and was advised to invest a five-figure sum for five years. With the world at it is at the moment, looming recession, war, etc., would I be mad to invest such a large amount now? They gave me no other information about type of investment or risk, that information will be available if I decide to do it. Sounds scary to me.

    57 views so far. Maybe I asked a forbidden question but as I said, I don't know anything about the subject and I'm in a quandary over this. Doesn't look like I can delete this so if there is a Mod around, please delete.

    Post edited by Jellybaby_1 on



  • If money has been sitting in a bank account for the last year, 10% has evapourated and more will follow through inflation. The money will never be worth what it was a year ago.

    If money has been sitting in S&P 500 ETF for the last year, 20% has evapourated through falling stock values. But it is pretty much inevitable that over time the value of that fund will exceed the value of the money which was put into it a year ago after accounting for inflation. But if you need access to that money today, you've lost twice what you would have by putting it in the bank.

    Maybe you'll double your money (or better) by the time you chrystallise your investment, or it may plummet 50% (or worse). No risk, no reward. But in general, stock market index tracking exchange traded funds over 5+ years are relatively safe statistically speaking.

  • Registered Users Posts: 808 ✭✭✭Jellybaby_1

    Appreciate your reply. Many thanks. I don't know what 'S&P 500 ETF' is though?

  • Registered Users Posts: 1,297 ✭✭✭walterking

    If your money was in the s&p 500 etf the drop would have been about 6%.

    It dropped almost 20% in dollar terms, but the dollar has strengthened almost 15%, so in EUR terms the drop in the market has been very cushioned.

    Once the fed starts to talk of stabilising/dropping interest rates, the market will start moving up again.

  • Registered Users Posts: 808 ✭✭✭Jellybaby_1

    I'm still lost, but thanks anyway for replying.

  • Registered Users Posts: 938 ✭✭✭Neames

    Have you cleared all high interest debts and your mortgage?

    Have you maxed out pension contributions?

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  • Registered Users Posts: 808 ✭✭✭Jellybaby_1

    No debts. Full pensions.

  • Registered Users Posts: 11,445 ✭✭✭✭Ush1

    What's the investment this company has advised?

    No you shouldn't invest because you don't even know what you're investing in.

  • Registered Users Posts: 808 ✭✭✭Jellybaby_1

    I agree, that's why I made my mind up to do nothing.

  • Registered Users Posts: 44,594 ✭✭✭✭Bobeagleburger

    Good time to invest.

  • You should do your research in my opinion— exchange traded funds, long term performance of the various markets etc. There's plenty of information online. Your decision will be informed by how risk averse you are.

    Bear in mind though that the only way to avoid making a mistake is to do nothing— but doing nothing is also an action, and can often be a mistake all of its own. Every action and omission of action has an associated cost, whether financial or an opportunity cost.

    My long term investments are monthly payments to (Zurich) funds based on NASDAQ 100 & S&P 500. Average return over the past 3 years is about 2% or so after this year's hammering (it was running at about 26% a year ago). That's not much, but it's still much better than anything I'd get from any bank account or GILTS. Also, it'll be another decade before I touch them, so it would be amazing if the average return hadn't gone up a lot by then.

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  • Registered Users Posts: 938 ✭✭✭Neames

    Would you mind sharing the name of the Zurich Fund please?

  • Registered Users Posts: 3,656 ✭✭✭brainboru1104

    In the long run (10 years) you should be fine. But 2023 will probably be worse than 2022 so in the short run your investment might lose value but so long as you don't sell and ride out the storm you could see a return in the long term.

  • Registered Users Posts: 808 ✭✭✭Jellybaby_1

    Speaking for myself, there isn't much long time left at my age!

  • Registered Users Posts: 3,656 ✭✭✭brainboru1104

    The next five years could be volatile. Very difficult to predict.

    If you choose to invest, I would play it safe.

  • Moderators, Business & Finance Moderators Posts: 9,270 Mod ✭✭✭✭Jim2007

    Doing nothing is actually doing something, it failing to invest which means you have actually chosen to loose money.

    There is no good time to invest and there is no bad time to invest, there are just different approaches and strategies to accumulate wealth over time. None of these approaches involve trying to time the market because that is a fools game which you will loose!

    You you have provided your advisor with a lot of personal information and presumably paid a fee to obtain their advice. If you are not going to take advice from someone in command of all the information then for heavens sake don’t seek advice from random individuals on the internet.

  • Registered Users Posts: 3,656 ✭✭✭brainboru1104

    "don’t seek advice from random individuals on the internet"

    Completely agree, but feel the need to add that I analyse economic/financial risk professionally. I don't believe I've ever met anyone in Economics or similar who is "in someone in command of all the information".

    There is data and inference. A heavy emphasis on the latter. Command is too strong a word, imo.

  • Moderators, Business & Finance Moderators Posts: 9,270 Mod ✭✭✭✭Jim2007

    And I spent 30+ years working in Swiss banking and I have heard every single dumb idea out there at one presentation or another.

    And if you revisit what I wrote, I was referring to the personal data of the client, I don’t give a toss what the economic analysis of the next five years is, it will not change a thing for me.

  • Registered Users Posts: 3,656 ✭✭✭brainboru1104

    Revisited. Still think the notion that anyone has a "command of all information" is laughable.

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  • Registered Users Posts: 359 ✭✭Saudades

    I read it that he was referring to the financial advisor having a 'command of all the clients information' - age, planned retirement date, risk profile etc.

    Not a command of all information in the financial market.

  • Registered Users Posts: 1,288 ✭✭✭daithi7

    Ok some basic rules of thumb for investing:

    -Pay down debts first

    - invest in yourself as your first priority (education, job, business, welfare, health, etc)

    - invest in your network 2nd

    - with any further investments , only invest what you can afford to lose

    - 1/3 in equities,(passive etfs or investment trusts (cos of Irish tax laws), 1/3 in property & 1/3 in cash is a pretty good rule of thumb imho.

    - don't invest in anything you don't understand

    Is it a good time to invest in equities? Well it's certainly a much better time than 12 months ago, it may not be as good a time as 6 months hence (but nobody can be sure of this, and if they are, they're total spoofers), but given that long term real returns are now forecast to be ~4.5-6.5% after this 12 month correction period , it's probably not a bad time , considering everything....

    Good luck.

  • Registered Users Posts: 1 TomJohnJimGer


    In somewhat of a similar situation to OP, where I have come into some money (low 5 figures)

    My first quandary is should I invest or pay down mortgage. Current mortgage is ~60k, <3% interest - so it’s not onerous.

    Second quandary then is where to invest, if I was to do so. I think I would be looking at some sort of managed fund? I’m not a financial expert in any way… (Appreciate the comments that I need to speak to a financial advisor, and I will do before I do anything)

    As for the ‘can afford to lose’ - it would annoy me to lose it, but I’d still manage away if it did disappear.

    But interested to hear opinions here - especially as to the pros and cons of invest or put money into mortgage

    Thanks in advance folks…

    Oh, yes, this is my first post on boards. Would love to be able to trot out the “first time poster, long time lurker” line but to be honest, that would be a total lie 🙁

  • Registered Users Posts: 44,594 ✭✭✭✭Bobeagleburger

    Max out pension contributions also before investing.

    No point using money that you have paid ~50% tax on to invest in shares when you can get 40% tax relief on gross earnings.

    It's basic, but the amount of people that don't factor it in is astounding.

  • Registered Users Posts: 17,090 ✭✭✭✭Donald Trump

    Depends on the years to retirement and the tax you will be paying when taking it out too.

  • Registered Users Posts: 1,569 ✭✭✭MyStubbleItches

    Not to mind that most will be considering relatively small sums to invest which might not make a massive difference to a weekly pension.

  • Moderators, Business & Finance Moderators Posts: 9,270 Mod ✭✭✭✭Jim2007

    The key is to take the tax savings and invest that as well. That will give you a very big jump start on the annualized return. Instead most people blow the savings on something they can’t even remember 18 months later.

  • Moderators, Business & Finance Moderators Posts: 9,270 Mod ✭✭✭✭Jim2007

  • Registered Users Posts: 17,090 ✭✭✭✭Donald Trump

    My point was to the example of someone close to retirement who is going to retire on an income which will be above marginal tax rate anyway. Yes they will still benefit from the return on the delayed tax portion, but if they are close to retirement then that factor won't be as beneficial.

    The people it is really beneficial for are those with a long time to retirement and who might be paying top marginal rate now but would not be paying it after retirement.

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  • Registered Users Posts: 11 doubledouble