Deposit interest rates have been at record lows for quite some time now, with little sign of a meaningful interest rate rise on the horizon. Many businesses and individuals have cash sitting in deposit accounts and are looking for alternative investment options, rather than leaving their money on deposit at very poor interest rates, in some cases negative interest rates!
If Deposit Accounts are no longer an option, then what are the alternatives?
Any investment decision is really based on how much risk you are prepared to take to achieve investment growth. If you choose low-risk investment funds, the possible investment growth will be quite modest. However, if you choose a higher risk investment funds the possible investment return may be quite large. The other side of this equation is higher risk investment funds open to door to the potential of losing money also!
Before looking at the investment options available to you, there are a few important questions you need to ask yourself:
- Do you need your investment to provide capital growth or an annual income, or both?
- What is your investment timeline – 1 year, 3 years, 5 years?
- How much can you afford to invest?
- Have you or your business accumulated capital gains tax losses in the past that can be offset against possible gains from a future investment?
- Are you a speculative investor or do you prefer to play it safe?
Once these questions have been considered it will help to guide your decision as to the type of investment fund, or funds, best suited to your needs.
There are thousands of investment fund options available to Irish Investors. They can be broadly classified, in order of low risk to high risk.
Investment Fund Options
- Traditional 90% to 100% Capital Secure Funds
- Absolute Return Funds
- Government and Corporate Bond Funds
- ‘Soft’ Capital Secure Funds
- Multi-Asset Funds
- Commercial Property Funds
- Equity Funds
- Commodities and Precious Metal Funds
I will be expanding on these investment options in later articles but in practice most investment portfolios should contain a range of investment funds from different providers in order to achieve a balanced and diversified spread of investment, that caters for all types of investment market conditions.
At Guardian Wealth we will sift through the thousands of investment fund options from leading fund managers to make sure you don’t miss out on any opportunities available to you. We also review your investment plans with you at least once very year to make sure your investment strategy is on track and to make changes to your portfolio when needed.
If you are looking to explore the investment options available to you or your business, we have developed a comprehensive risk profiling tool for our clients which ensures we only pick investment funds suited to your needs.
If you have questions, please feel free to contact me, Michael Coburn, using the contact details listed below.
Dublin: 01 5267770
Wexford: 053 9110380
Michael has been providing tax, investment and lifetime financial planning advice to clients since 2005. He has an in-depth understanding of Business Owners and their requirements, which allows him to guide his clients through the complex world of long-term financial planning.