QuinniLIfe SSIA 2 years on

[Bearish]

Well, its that time of the year again when I share my SSIA woes with all those on AAM.

I purchased a Quinn Life SSIA in May 2001. Its is 100% percent invested in the Eurostoxx 50. Having a look on how it did over the past 2 years is slightly painful. Its down approximately 22% in nominal terms (roughly lost about €1.6K so far). Which means that including inflation over the period, I’m down around 31%. More than the governments contribution. Now that hurts. This loss would of course have been a lot more if I had not been drip feeding the investment in every month- probably be down over 50% if I had put in a lump sum in May 2001!

Before anyone jumps out of the woodwork – I do realise that equity investments are long-term. However I would estimate that it will take at least 5-8 more years before I can make this money back and receive a decent average annualised return. Now I know that a lot of the AAM contributors favour index tracking as it low cost. I also know all about the studies showing that fund managers under-perform trackers. Both of these arguments I have previously stated I agree with. However a loss of 31% is still a loss. I wonder just how many people, with less experience of financial markets and less patience will seek to switch out of their equity based SSIAs? Is there anyone out there thinking of switching at the moment? Has the SSIA and Eircom fiasco permanently damaged the general Irish public’s appetite for investing in the markets?

Also I’d love to know how other equity related SSIAs have performed

 

[Moneybags]

Hi Bearish,

Have you tracked the Euro Stoxx 50 performance lately? The index is up over 20% since its low point on 12 March, when everybody lost their heads over the upcoming invasion of Iraq.

I know you'll need a lot more of the same to recover your losses but at least the index is moving in the right direction ...... unless you subscribe to euro cost averaging, in which case the rally has robbed you of the opportunity to buy even more fund units on the cheap .

 

[Bearish]

Moneybags,

Euro cost averaging is all well and good. But its little use in constantly buying units "on the cheap", if the investment never recovers. You can buy lots of tech companies "on the cheap" but that doesn't necessarily mean they are a good bargain. Its going to take a lot more than a 20% rise from current levels for anyone holding an equity SSIA since May 2001 to see a decent return

 

[brian]

Quinn Life's 1% charge

what does "euro cost averging" mean?

 

[Dearg Doom]

Re: Quinn Life's 1% charge

Have you tried ?

I'm no expert, but it's a concept of purchasing some fixed Euro amount of an item (e.g. shares) on a regular basis where the price of that item flucuates over time. When it's price is up you buy fewer items, when it's down you buy more, hopefully giving a cost basis that's less than the average cost per item.