# SSIA invested in PIP- losing value. will i cash in?



## dody (26 Jun 2008)

On maturity of my SSIA i invested it in a PIP (balanced fund)with Irish Life. It was performing ok. At the moment it is worth approx 17500 this time last year it was worth 900 more. I currently put 125 per month into it. If i cease payments i must cash it in. I do not need the money at the moment but may in the next two years. should i cash it in as i fear it may decrease even more in value


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## paddyd (26 Jun 2008)

Is this fund low risk? I ask because you've _only_ lost 900 on a 17.5k fund
 (c. 5%). Most managed funds are 10-12% down this year alone. One managed fund I have is 19.5% down on 12 months ago. Patience is a virtue. I've been buying more of it lately as its trading very low in my opinion. But I don't expect it to rebound much short term.

If the market keeps dropping for the next 2 years I would be amazed (in my uneducated opinion). There's not much more downward wiggle-room, and most companies are pretty much at a discount to their net asset value, which, assuming further losses on the markets, its reasonable to expect a return to at least NAV in the short-term.


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## d2x2 (29 Jun 2008)

I am in the same place but instead of investing further in a loss-making fund, I am cashing it and investing in a savings account which will guarantee about 4-5% growth a year... when the markets are bullish again I will switch back.


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## gebbel (29 Jun 2008)

d2x2 said:


> I am in the same place but instead of investing further in a loss-making fund, I am cashing it and investing in a savings account which will guarantee about 4-5% growth a year... when the markets are bullish again I will switch back.



So how much of a loss are you going to take now by doing this?


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## roland (29 Jun 2008)

d2x2 said:


> I am in the same place but instead of investing further in a loss-making fund, I am cashing it and investing in a savings account which will guarantee about 4-5% growth a year... when the markets are bullish again I will switch back.


 
You could be doing the right thing - nobody knows.  However selling after markets have fallen a lot, and then planning to buy in again after markets have gone up is not usually a sensible plan.  This is a 'sell low, buy high' strategy which is the exact opposite of what you should be doing.


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## LDFerguson (30 Jun 2008)

d2x2 said:


> I am in the same place but instead of investing further in a loss-making fund, I am cashing it and investing in a savings account which will guarantee about 4-5% growth a year... when the markets are bullish again I will switch back.


 
Many investment professionals attempt to do this and fail because it's impossible to time the markets.  When you think the markets are bullish, it could just be a "dead cat bounce" i.e. a short bull run before an even greater drop.


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## seanogheg (3 Jul 2008)

dody said:


> On maturity of my SSIA i invested it in a PIP (balanced fund)with Irish Life. It was performing ok. At the moment it is worth approx 17500 this time last year it was worth 900 more. I currently put 125 per month into it. If i cease payments i must cash it in. I do not need the money at the moment but may in the next two years. should i cash it in as i fear it may decrease even more in value


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## pAnTs (27 Nov 2008)

I have no intention to cash in as I always planned to leave my fund for 10 years, I think Im in year 6 or 7 now. I was thinking though is it silly to continue to pay into the fund? I mean I could just let it sit there till the ten years are up and instead save the 100 years per month. My fund is down 33%!!! scary. I am possibly the least financially savvy person on here and I really dont have a clue how these things work


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## DerKaiser (28 Nov 2008)

dody said:


> On maturity of my SSIA i invested it in a PIP (balanced fund)with Irish Life. It was performing ok. At the moment it is worth approx 17500 this time last year it was worth 900 more. I currently put 125 per month into it. If i cease payments i must cash it in. I do not need the money at the moment but may in the next two years. should i cash it in as i fear it may decrease even more in value


 
If you need this money in 2 years you should switch to cash to reduce the risk of ending up short

If this were for longer term savings I'd advise you to do nothing.  The biggest danger in long term equity investment is people losing the stomach for it once they have sustained heavy losses


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## paddyd (28 Nov 2008)

DerKaiser said:


> If you need this money in 2 years you should switch to cash to reduce the risk of ending up short
> 
> If this were for longer term savings I'd advise you to do nothing.  The biggest danger in long term equity investment is people losing the stomach for it once they have sustained heavy losses



I would argue it may be too late for that. When we posted here in June, it was the correct time then (oh retrospect). With all thats happened in Sept and Oct in partuicular, theres not much point in crystalizing such a big loss now when even if markets fall back further, it won't be much in % terms on top of what you've already lost. And even if it takes another 12 months, there a bull run in there somewhere, thats just how the market works; the bull and the bear have their day in (almost) equal measure


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## DerKaiser (28 Nov 2008)

Say the OP needs €20k for amuch needed renovation the house or whatever in 2010

Say the OP had €18.5k in 2007 and the capacity to save €125pm.  At that point I would recommend putting it all in a deposit account to save for the known expense.

After 12 months and another €1500 in payments into the SSIA the fund was down to €17.5k.  Again at this point the advice would be put it all in a deposit account to save for the known expense.

Say we're a further 6 months on and the fund is down to €14k depite €750 more in premiums.  I would still advise the OP to put it all in cash.  Ok so you'll now only have €16.5k by 2010 i.e. you'll be €3.5k short, but this is manageable.

What you don't do is continue to gamble in the hope that you can make back up the shortfall in a short timeframe.  You might get lucky but you have to face up to facts i.e. you need to cover off as much of the cost as you can with certainty and see how you can cover the shortfall.  you don't risk the capital you have as you could end up making things a lot worse


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## GSheehy (28 Nov 2008)

Rather than exiting on any particular day, you also have the option of phasing your exit from equities to cash over the specified period, when you have an end target date. 

It may be an additional option to either a) Switch everything to Cash or b) Staying invested.


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## pAnTs (29 Nov 2008)

i hear major conflicting view points, if you are willing to leave the fund with no view to cashing it in is it advisable to continue paying into the fund now or is it just throwing cash away?


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## paddyd (29 Nov 2008)

pAnTs said:


> i hear major conflicting view points, if you are willing to leave the fund with no view to cashing it in is it advisable to continue paying into the fund now or is it just throwing cash away?



only two things matter:

1. when do you need the money? 
If its medium or long term, I'd leave it as is and continue paying as normal. If you need it in the short term, then its different,ánd your exposure to short term market volatility is higher.

2. do you think the markets are close to bottoming?
Markets have now tested incredibly low levels twice (mid Oct and mind-Nov), and in all major markets, bounced back strong each time, increasing over 15% last week alone on the Dax, CAC, DJIA etc.

Personally, I've now paid 21.5k into a fund currently valued at 13.5k. Its 20 months into a long-term (7-10 years ish) play, so naturally I'm waiting it out. I have the option to move to cash and move back again, once per year. Sorry I didn't do it in July, although I can say I moved out of all irish funds in July 07, otherwise I'd be 21.5% worse off, as of yesterdays closing prices.


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## Complainer (29 Nov 2008)

dody said:


> If i cease payments i must cash it in.


Are you certain about this? I've never seen an investment product that had this kind of condition, tying continued investment to cashing in.


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## pAnTs (29 Nov 2008)

I pay 50% into on both of these funds, what do you think with regards to the recent financial climate? could someone explain to me how these funds work

AIB Multi Track Fund
Invests in widely diversified portfolio, which spans all major world stockmarkets and also provides exposure to Eurozone bonds.
The fund holds a portfolio of securities that provides exposure to more than 1700 companies.
Open-ended fund - however, we strongly recommend that you view this as an investment for a minimum period of 5 to 7 years.
Managed by Hibernian Investment Managers.

AIB Managed Fund Series 2

Designed to invest in a carefully monitored portfolio of international shares, fixed interest securities, properties and cash deposits.
Profit through capital growth potential and reinvested income
Open-ended fund - however, we strongly recommend that you view this as an investment for a minimum period of 5 to 7 years.
Managed by Hibernian Investment Managers.


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## paddyd (30 Nov 2008)

pAnTs said:


> I pay 50% into on both of these funds, what do you think with regards to the recent financial climate? could someone explain to me how these funds work
> 
> AIB Multi Track Fund
> Invests in widely diversified portfolio, which spans all major world stockmarkets and also provides exposure to Eurozone bonds.
> ...




I've invested in similar aib funds,but ended up in the Global fund and Euro Fund series 2.
The only difference is that some are passive (tracking a bunch of indices), whereas others are actively managed by a Hibernian fund management team. These cost more generally, I think the passive ones are 0.25 - 0.5%, and more for the actively managed ones (1 - 2.5% ? ). \its all listed on the documentation you have since you got into the fund. I'd have to dig it out.

Heres two v. important links for you:
http://www.avivainvestors.ie/fund_prices_and_performance/aib_funds/index.htm[\url]
accept the T's & C's (only pops up the first time you visit), and then click 'AIB Prices'

One ht esame link you can also see the fund historical prices and performance (updated 1st of each month):
[urlhttp://www.avivainvestors.ie/fund_prices_and_performance/aib_funds/fund_performance/index.htm


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## pAnTs (7 Jan 2009)

Hiya can someone explain to me how to read the following page

[broken link removed]


thanks


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