Regular Monthly Savings advice

[thebell]

Hi all I'm looking or seeking advise for most completive product on the market for monthly regular savings!

Medium to long term (5-10 years)with 70% capital security

There is so many products out there its confusing!

We currently have 500 Euro to save\invest each month. Should we place in separate plans or invest in one plan?

Any views on Irish life consensus fund?

Any advice welcome on latest greatest products, open to certain amout of risk with the hope of better returns.

Would greatly appreciate any comments

Thx in advance “I’m the regular Joe in the add which asks what’s a tracker mortgageJ”

 

[thebell]

Looking through the posts I should be really asking the the qeustion ?

Unit linked funds Versus Regurlar Saving account i.e
(BOI regular saver or AIB regular saver annual 7% PA)

When you add up all the charges & fees from unit linked funds and average returns is it worth it or are you just hoping for a great run on the stock markets each year??? As mentioned was looking to invest 500 a month using Irish life consesus fund?

 

[PMU]

Medium to long term (5-10 years)with 70% capital security

If you say you want 70% capital certainly, do you mean you are willing to risk a loss of up to 30%?


Well, you could put 70% in the Northern Rock (or in the Post Office) to guarantee 70% of your capital. As the interest you will receive less DIRT tax is likely to be less than the rate of inflation, you could put in more than 70% to maintain the value over your investment horizon; and then plonk the remainder into whatever you think has a good risk reward ratio. In any event, you’ve got your 70% guaranteed.

Alternatively, you could put all your dosh into the stock market, for example, the S&P (e.g. QL’s US Freeway). The S&P has an annual historic return of about 7% with a standard deviation of about 19% (note: these figures are a few years old). So you have a one in three chance that each year the value of your investment will vary between +26% and –12%. As –12% is a lot less than the –30% you appear to be willing to accept, if you are rational, you should invest in the US stock market. (In fact, you should invest in any stock market for which the average annual return minus the standard deviation of returns is less than 30%.). Playing around further with the stats from the S&P will show that you run the risk of a –30% return only once in about every 40 years. So you should go for it.

[FONT=&quot]But when you say 70% capital security, do you really mean you would tolerate a 30% drop in your investment? If this were to happen the remainder would have to grow by 43% just to break even.[/FONT]