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Savings and Investments

Guide to Investing

Before you choose to invest in financial products. It's important to understand how the product or investment will meet your goals. This short guide aims to give you a better understanding of how investment products work in general.

We strongly recommend that you seek independent financial advice from trusted sources and before buying an investment product make sure you are comfortable with all the details that concern you, if in doubt ask and ask again, we at Ryan & Riordan Insurances can provide this independent advice and welcome your questions.

Please refer to the following website from the Financial Regulator for further independent information: www.itsyourmoney.ie

We will know the main facts about the products on offer from the companies we hold agencies with and will help work with you to assist you choose a product that best suits your needs.

When deciding how to invest your money it makes sense to have a good understanding of how investments work and the factors you should consider before making a decision that is why we have set out this brief guide to the main questions we would recommend you ask yourself:

Why are you investing?

We all have financial goals that we want to achieve. For instance some of us will need to save for future expenses such as our children's education or our retirement. Others would like to invest to build up a lump sum to buy a property or holiday home.

Together with your financial adviser, you should set out your financial goals, your reasons for investing and how you are going to achieve your financial goals. Consider if you need to achieve long-term capital growth or if you need a regular income in the future from your money. You may also need to think about starting to invest for your retirement.

How long do you want to invest for?

When you are investing, time plays a key role in helping you decide how much risk you are willing to take. Knowing how long you want to invest for also helps you decide on the type of investment that is most appropriate for you. We recommend that you should think of investing as a decision taken for a minimum of 5 years.

What is your attitude to risk?

As an investor, you want to achieve the highest possible return at a level of risk that suits you. The key is finding a balance between the amount of risk you are willing to take and the potential returns you want to achieve.

There are different types of risk involved in investing as outlined below:


Each asset class has its own risk and return characteristics

 

Equities

These are stocks and shares in companies. Historically, equities have produced higher returns than other asset classes, and have the best chance of beating inflation over the long term. However they also carry greater risk. Over the shorter term, the value can go up or down significantly, making them more volatile. This is why equities are normally viewed as a long-term investment, giving you time to ride out the short-term ups and downs.

Property

Historically, property has provided lower returns than equities but higher returns than bonds or cash. Property enjoys relatively low volatility compared to equities. It provides good and reasonably stable returns over the mid to long-term. It also provides good diversification from equities. This is why property is normally viewed as a medium to long-term investment.

Please note that some property funds reserve the right to restrict withdrawals from their property funds at the discretion of the fund manager, so this type of investment may not suit investors looking for liquity/access

Fixed Interest Securities (Bonds)

Governments and companies issue bonds as a type of loan in order to borrow money. In return they promise to repay the loan at a future date with interest. Historically, bonds have produced better returns than cash, but in general have yielded lower returns than property or equities and are considered to be less volatile.

Cash

Investing in cash means putting your money on deposit (for example, in a bank account) where it earns interest. Cash bank deposits offer more security than equities, property or bonds as the basic capital is protected. However returns are likely to be more modest than equity, property or bonds based investments and your investment is at risk of being eroded by inflation over the longer term.

How to get the balance right

By spreading your investment among different asset classes, you can reduce the overall level of risk in your portfolio.

Generally, it's not possible to diversify all risk but spreading your investment over a mix of assets is a good way to help smooth out the ups and downs of an investment.

How do I choose an investment that's right for me?

There are many different types of investment products available to you from a number of different providers, such as banks, stockbrokers and life assurance companies.

You can access most assets directly or by investing in an investment fund. For instance if you would like to invest in equities, you can buy stocks and shares directly through a stockbroker. Alternatively you can invest in a 'pooled' investment fund. This means that your money is 'pooled' with other investor's money to buy units in a fund managed by an investment manager, so you are not responsible for buying stocks and shares directly. The value of your investment fund is normally directly linked to the performance of the assets the fund invests in.

Similarly if you want to invest in property you could buy property directly, (residential or commercial), or alternatively you can buy through your pension fund, or simply invest in a property fund that invests in many different properties.

Things to consider

Remember that before you invest in any product you should consider the following:

Warning: Past performance is not a reliable guide to future performance.
Warning: The value of your investment may go down as well as up.



With the wide range of investment choices available in the marketplace, you can now decide for yourself how and where your money is invested, as well as who manages it.

All this flexibility means that you can put your own stamp on your portfolio, giving you the best opportunity to build up your investment over the long term.

As qualified financial advisers, we will explain all the investment choices available to you, and will help you to make the right choices to suit your financial circumstances and investment objectives.

To make sure you can achieve the diversification you need within your portfolio, we will offer you a selection of different investment styles, including:

We also offer access to a wide selection of respected fund managers from around the world and a full list is available by contacting us for further details

Remember

The value of your investment can fall as well as rise, regardless of which option you choose.

Past performance is not a reliable guide to future performance

Call us today to arrange a no obligation financial review to discuss your needs and requirements