Financial Advice Needed Please

[FinQns]

Hi,

I am in a fortunate position thankfully of being early forties and have some money to invest. I am holding nearly €200k at the moment and would like to invest about half of that. I already have two houses in Dublin rented with my own home paid off, so I am looking to diversify away from property. One of which still has a mortgage but its <1% interest so I would hope I could beat that. I am already contributing maximum on my pension. My circumstances may change in the coming year and my profile is low-medium risk, so ideally I would make a return that beats inflation but keep the funds fairly accessible. I have talked to a financial advisor but all they wanted to do was sell me their products which were pretty complicated. Another option is invest €10k in 10 solid stocks, however from my limited knowledge, I would nervous getting into the markets at this stage and think there maybe a correction in the next year or two. Any other options?

Thanks.

 

[zephyro]

Excluding property, there aren't many attractive investment options at the moment other than stocks, bonds look very unappealing. There definitely will be a correction at some point but it's impossible to say when and if you don't need to sell it's effectively irrelevant to you. How much of this €200k won't be needed in the next few years?

 

[MrEarl]

Hello,

I think (Irish) equities are the answer for you - select well established and well regarded value shares and you should not go far wrong.

While there is a risk of the values falling in the future, there is also a chance of the values increasing. Market corrections are one thing, but successful, profitable, established businesses trading in growing economies and in a low interest rate environment cannot be ignored. Most value shares are fairly stable, and pay dividends, so would meet your "low-medium risk" profile.

Ultimately, the value only matters if and when it's time to sell, so once you diversify your holding and think it's unlikely that you will need to sell a large percentage (or all of the shares) at short notice, then you should be okay in terms of the overall risk you have taken on.

Also, don't forget, equities can be sold immediately (subject to price), property or other asset classes can take time to sell, so may not suit if you think that some day you may need cash in a hurry !


.

 

[cremeegg]

bonds look very unappealing. There definitely will be a correction at some point but it's impossible to say when and if you don't need to sell it's effectively irrelevant to you.

I do not understand this thinking at all.

If you buy a bond yielding 2% in todays market and then there is a correction, i.e. bond prices fall, that is likely to occur in the context of an increase in inflation. It will matter very much to you, if your yield goes from more than inflation to less than inflation.

 

[FinQns]

Excluding property, there aren't many attractive investment options at the moment other than stocks, bonds look very unappealing. There definitely will be a correction at some point but it's impossible to say when and if you don't need to sell it's effectively irrelevant to you. How much of this €200k won't be needed in the next few years?

Thanks for the reply. I am currently employed but looking at maybe leaving that and setting up a small business so I will need some of it for the transition and setup. But it wont be more than €100k.

 

[FinQns]

Hello,

I think (Irish) equities are the answer for you - select well established and well regarded value shares and you should not go far wrong.

While there is a risk of the values falling in the future, there is also a chance of the values increasing. Market corrections are one thing, but successful, profitable, established businesses trading in growing economies and in a low interest rate environment cannot be ignored. Most value shares are fairly stable, and pay dividends, so would meet your "low-medium risk" profile.

Ultimately, the value only matters if and when it's time to sell, so once you diversify your holding and think it's unlikely that you will need to sell a large percentage (or all of the shares) at short notice, then you should be okay in terms of the overall risk you have taken on.

Also, don't forget, equities can be sold immediately (subject to price), property or other asset classes can take time to sell, so may not suit if you think that some day you may need cash in a hurry !


.

Thanks for the reply. As a matter of interest why do you think Irish equities as opposed to international?

 

[MrEarl]

Thanks for the reply. As a matter of interest why do you think Irish equities as opposed to international?

• No currency risk
• Less concerns regarding economic or political changes in other countries (albeit, we remain exposed to the impact of many significant changes elsewhere)
• Possibly cheaper transaction costs, depending on which other markets we consider
• Possible tax considerations

You mentioned being a low-medium risk type investor, so I felt it best to keep it fairly straight forward.

That said, if it were up to me, I would look at other western markets myself and possibly even a global market index, notwithstanding the potential additional risks. You mention having a couple of properties, so I would like more diversification than just a split between Irish property and Irish equities, but then we quickly get into a debate about the level of risk being taken on once we start that discussion.

 

[zephyro]

so I would like more diversification than just a split between Irish property and Irish equities, but then we quickly get into a debate about the level of risk being taken on once we start that discussion.

Eurozone equities offer far more diversification than Irish without currency risks etc.

 

[Sunny]

As well intentioned as people are, you shouldn't be taking advice from nameless people on any website including AAM if you are looking to invest 100k. There are many good independent financial advisors, some of whom contribute to this site who I am sure would be delighted to help. If a financial advisor can't explain a product that they want you to invest in in such a such a way that you can understand, then you are right to walk away.

 

[FinQns]

As well intentioned as people are, you shouldn't be taking advice from nameless people on any website including AAM if you are looking to invest 100k. There are many good independent financial advisors, some of whom contribute to this site who I am sure would be delighted to help. If a financial advisor can't explain a product that they want you to invest in in such a such a way that you can understand, then you are right to walk away.

Yes of course. Just interested in people's perspectives. Thanks.