Making your savings work for you
With deposit rates at an all time low, some investors are seeking a different solution for money they have to invest for the long term.
Whilst keeping money on deposit for short term needs is advisable, at Peavoy Financial Planning we provide an alternative strategy for those who have regular monthly amounts to save for the long term. The strategy we put in place has the following key features
- Accessible – You will always have access to your funds if needed without penalties applying
- Open Ended – Your plan has no set term, which means you can keep saving for as long as you like
- Flexible – You can take a portion of your savings out at any time and continue saving
- Versatile – You can stop, decrease or increase your premiums at any time
- Choice – You have the choice of a range of funds to invest in
- Risk Controlled – You can invest in a solution to match your attitude to risk
- Switchable – You can switch between investment funds at any time
During an investment journey, markets will experience highs and lows in response to social, political and economic events. Timing the markets, involves trying to anticipate when these highs and lows will occur, with investors hoping to buy when prices have reached the bottom and sell when they have peaked. At Peavoy Financial Planning we don’t believe it is possible to time the markets, as it’s very hard to predict when to sell or buy back in. Getting it wrong once, means you can end up locking in losses and missing out on future gains.
Staying the course is the best answer. Remembering the following three key investment principles, during times of volatility may help you increase your chances of a superior outcome
1/ Stay disciplined – This means, invest a set amount every month. It may be uncomfortable at times, but sticking to the plan normally serves you better in achieving long term goals. For example, missing just the 10 best days in the market between 2003 and 2017, would have resulted in an outcome 48% lower.
2/ Volatility is part of investing – The rise and fall of markets is part of the natural cycle of investing. Historically, each significant market downturn has been followed by an eventual upswing.
- Despite the so called “Black Monday” of 1987, it was still a positive year for equities
- Since 1980, European Equities have finished the year in positive territory in 31 of 40 years, despite an average intra-year decline of over 15%.
3/ Diversify – A basic rule of investing is diversification. Diversification means spreading risk, by mixing a range of asset classes within your portfolio. A well diversified portfolio might include equities, bonds, alternatives, property and cash. Such diversification helps smooth returns over the long run. A multi asset range of funds invests in a fully diversified range of global asset classes and strives to deliver returns using a controlled process. While there is no such thing as a 100% risk free investment, diversification can help mitigate the inherent risk of investing to reach your long term financial goals.
Keeping your money in cash is not the long term answer. A regular long term savings habit, investing in a multi asset solution to match your risk profile, can make all the difference to your long term finances.
For further information, please do make contact with me here at Peavoy Financial Planning and we will work through your specific goals. I can be contacted on 087-2902206 or alternatively by email on .
David Peavoy BA, QFA, LIAP is the Owner of Peavoy Financial Planning whose practice is based in Office 5b, Portlaoise Enterprise Centre, Clonminam Business Park, Portlaoise, Co Laois.
David Peavoy T/A Peavoy Financial Planning is regulated by the Central Bank of Ireland
Disclaimer: All data and information provided within this blog is for information purposes only. It should not be taken as specific advice for your situation. Peavoy Financial Planning makes no representations as to the accuracy. completeness, or suitability of any information and will not be liable for any errors, omissions or delays in this information or any losses, injuries or damages arising from its use
Warning : The value of your investment may go down as well as up. Past Performance is not a reliable guide to future performance