Savings & Investments

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If you are saving for any of the following reasons:

  • Educational fees for your children
  • Deposit for your home
  • Or simply want to build up a nest egg

We will provide advice on all aspects of investments. We have products to suit all types of investors. Investing your money sensibly can provide you with security for the future. We all have reasons to save and when investing there are a few simple questions you need to ask yourself:

  • What type of investment risk are you prepared to take?
  • How long do you need to invest for?
  • Do you want 100% capital guarantee?
  • What are the tax implications for you with this investment?

We have access to many fund choices you can be assured of getting the best advice and the right investment strategy for you.

Before you decide to invest, it is very important that you ask yourself how comfortable you would be if your investment lost some value especially in the short-term.

Investing is usually for the medium to long-term (typically, 5-7 years or more) to give investments time to grow in value. However, even long-term investing involves risk as values will fluctuate over time and most investments do not provide a guaranteed level of return or a promise that you will not lose money.

In general, the greater the potential return you want from your savings and investments, the greater the risk you have to take. It is important to talk to a financial advisor about the level of risk you are prepared to accept and what it will mean to the returns you can expect. This should then influence the type of funds that you invest in – funds that suit your appetite for investment risk.

For more information on risk and the different level of risks faced by investors, you can log on to theNational Consumer agency website – www.itsyourmoney.ie

Most investments involve an element of risk:

  • Return Risk – the risk that your investment may not achieve the return expected
  • Capital Risk – the risk that you could lose some or perhaps all of the original money that you had invested

Risk can vary from fund to fund and it is very important, before you make any investment decision, that you understand all the risks associated with any fund. This will be key to picking the fund that best suits your needs.

Investment Choices: The European Securities & Markets Authority (ESMA) have defined seven risk categories for investments ranging from Risk category 1 ( very low risk) up to risk category 7 ( very high risk) to help investors understand the level of risk associated with their investments. There is a wide range of funds available to cater for most of these investment risk categories. We risk rate all our client’s investment choices as part of our recommendation process.

Levels of Risk

Funds categorised as Very Low Risk have the following characteristics:

  • They focus on preservation of capital above all else.
  • They involve very little risk to investors’ capital.
  • They are only designed as short-term holdings.
  • Over the medium to long term, the return on these funds may be less than inflation and may not be enough to cover product charges.

Funds categorised as Low Risk have the following characteristics:

  • They aim to provide a return in line with, or slightly better than, deposits.
  • They involve very little risk to investors’ capital, provided certain conditions are met such as remaining invested for a specific period of time.
  • Typically, investments in this category will promise a specified return at some point in the future, e.g. a minimum of 100% capital back in 5 years’ time.

Funds categorised as Low to Medium Risk have the following characteristics:

  • They offer the potential for returns in excess of deposits, but do not promise a minimum return at any time.
  • They tend to invest in a range of assets, normally focusing on lower-risk assets such as government bonds and investment-grade corporate bonds.
  • However, they also typically invest in higher-risk assets such as equities, property and alternatives, (e.g. commodities). At times these investments may be a significant proportion of the fund.
  • Investors’ capital is less exposed to market fluctuations than higher-risk investments, but investors may get back less than they originally invested.

Funds categorised as Medium Risk have the following characteristics:

  • They offer the potential for returns in excess of deposits, but do not promise a minimum return at any time.
  • They tend to invest in a range of assets, including lower-risk assets such as government bonds and investment-grade corporate bonds, but are more focused on higher-risk assets such as equities, property and alternatives, (e.g. commodities).
  • Investors’ capital is less exposed to market fluctuations than higher-risk investments, but investors may get back less than they originally invested.

Funds categorised as Medium to High Risk have the following characteristics:

  • They aim to generate a return higher than deposits and inflation.
  • They typically invest significant proportions in assets such as equities, property and alternatives, (e.g. commodities). They usually hold smaller amounts in lower-risk assets such as government bonds and investment-grade corporate bonds.
  • Within these asset classes, risk can be reduced by investing across sectors and geographic regions.
  • Investors’ capital is not secure and can fluctuate, sometimes significantly, and investors may get back less than they originally invested.

Funds categorised as High Risk have the following characteristics:

  • The potential return from high-risk investments is much higher than deposits or inflation.
  • The focus is on maximising the potential return to investors, rather than minimising risks. • Some high-risk funds may consist almost entirely of one asset class or be concentrated in one geographic region or sector.
  • Investors’ capital is not secure and may fluctuate significantly. Investors may get back substantially less than they originally invested.

Funds categorised as Very High Risk have the following characteristics:

  • They aim to generate exceptional returns for investors, but involve a significant level of risk.
  • Very high-risk funds may borrow to finance the purchase of assets, and while this offers the potential for higher returns, any losses incurred by the fund will be magnified as a result of borrowings.
  • In a worst-case scenario, investors in a very high risk fund could lose all of their original investment.