Mums €150k investment performing poorly

My Mum aged 60,received a €150K inheritance last Summer, and being an accountant she asked me to give her some investment advise. I suggested she invest some over a five year term and some in a deposit account. We met a number of financial institiutions advisors, and opted for €50K in first active property, €30K in BOI innovator, and €70K in a nationwide notice deposit account.
At present she has now lost 12% on the property, and 8% on the innovator fund, with the amount on deposit earning around 4%.

I am feeling terrible and will hope to make up for whatever she has lost.
She is aware that her investments are not doing well, but probably not the extent of her losses. I have told her that the investments are likely to go up and down, but over five years she will have made some return.
However, I am worried this may not be the case, especially with the forecasts of further losses in commercial property in the UK and Ireland.

My question is should she sit tight and hope for a return over five years, or cut her losses now and move all to a deposit account? thanks

The choice is really your mothers. However bear in mind that most Investments have gone pear shaped. She is only 60 and the world should be in a position to sort itself out, but it will take time. There are tens of millions of people in the same boat.

mercman said:

The choice is really your mothers. However bear in mind that most Investments have gone pear shaped. She is only 60 and the world should be in a position to sort itself out, but it will take time. There are tens of millions of people in the same boat.

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Just because tens of millions of people are in the same boat, does not mean she should remain in the boat. Davy has prediceted a 20% drop in commercial property, BOI invest more in commercial, 12% drop alarmingly high in FA fund. I think Trevork you know in your heart and soul, time to get out. Move all 'remaining funds' to deposit account, tomorrow, at least then you will have some peace of mind. Maybe recommend your Mam go on a holiday of a lifetime with some of the money, while she is still young enough to enjoy it!

Elphaba said:

I think Trevork you know in your heart and soul, time to get out. Move all 'remaining funds' to deposit account, tomorrow, at least then you will have some peace of mind.

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[FONT=&quot]If you follow this advice your mother will end up old and poor. A 60 year old today, if she doesn’t smoke and leads a healthy life style, can look forward for 25 - 30 years of life so you need to look at this as the investment horizon. Elderly people do have a need for large cash amounts for nursing homes or emergency medical expenses so your 70k is cash would seem prudent; however, there may be better deals around than the Nationwide account. The real risk to this is inflation, so if you think you Mum will be around for a long time you could switch a proportion to a euro-denominated index tracker, which hopefully will give returns to beat inflation. The property investment makes sense; your mother has a longish investment horizon and property is a stable investment but I think you should look at a lomg, say 12 year, time frame for a return on property. The BoI innovator fund is a rather risky but could turn out to be a real winner. It invests in emerging markets and commodities, which are doing really well at present and also alternative energy and water that one would question their advisably as investments for an elderly person. So you may wish to plan to switch out of this, as your Mum grows older. So my advice would be to leave things as they are at present, but with a bit of tweaking. (The one I'd be worried aboutis teh innovator; commodities adn emerging markets are asset classes; water and alternative energy are, IMHO,a bit flakey, i.e. tilts within asset classes or investment styles.) Your post does not say if your mother will have a state or survivor pension. If she doesn’t she could consider buying an annuity to protect against longevity risk [/FONT]

I suggest you open an investment share account with 20k in your mothers name with Irish Nationwide. chance of some windfall anything between 5k and 10k when/if they demutualise.

This gives an opportunity to get back some of the losses.

if you really want to make it up to your mother you too openan account and give her any windfall that accrues.

This could take several years before this happens in the current climate.

I would advise to take the rest out and spread it around on deposit in various institutions
- no more than 20k in each.

Daddy said:

I suggest you open an investment share account with 20k in your mothers name with Irish Nationwide. chance of some windfall anything between 5k and 10k when/if they demutualise.

This gives an opportunity to get back some of the losses.

if you really want to make it up to your mother you too openan account and give her any windfall that accrues.

This could take several years before this happens in the current climate.

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Do people think opening a share account with Irish Nationwide is still an option ? (ie is it too late) If so am I right in thinking the best rate for 20 -50k is 4.6% on a flexi saver account.

Of course it's an option.

You get a good rate and have nothing to lose.

Its a tough situation you are in, if your ma had followed her own financial strategy, their would have been 150K under the mattress !!!


Advice would be to put most in high yield deposit, and give eagle star a call for some goos advice where to put 50K.


Problem is, what are withdrawal charges at this stage ???, on top of losses, whqat charges will you incur by pulling out ....

thanks for the advise.
In particular PMU, can you give an example of a euro denominated index tracker?
If Mum, had had her way, all would have been put under the mattress, and she would be ahead right now!
The NAtionwide deposit account I mentioned, is a share account with a view to cashing in on any windfall.
Unfortunately, I do not have €20K going spare to take advantage of it.
Think Mum best to sit tight, and look to the future
thanks again

trevork said:

In particular PMU, can you give an example of a euro denominated index tracker?

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For example, Quinn Life’s Euro Freeway tracks the Eurostoxx50 index. There are also ETFs available that do this or that track broader euro indices.

[FONT=&quot]You might also do a search on the internet for an article: ‘Optimizing the Retirement Portfolio: Asset Allocation, Annuitization, and Risk Aversion’ (2006, [/FONT][FONT=&quot]Horneff, Maurer, Mitchell and Dus). It’s a bit technical, and written from a US economist’s perspective (and is not an investment strategy) but it might give you some idea of the issues involved in designing an investment portfolio for a retired person.[/FONT]