# Upto 100k Investment



## castle4 (17 Jan 2016)

Hi all,
_ I have recently received an inheritance and have upto 100k to invest.I still have a mortage of 200 k on a very cheap tracker.No debt other than mortgage.
No current pension in my job but wife is in public service and will have a good pension.
Our aim is to lock the money away for 7-10 yrs as we will have 2 kids hopefully starting college in 10 yrs time
I have met with 2 individual financial consultants about investing.Both agents have come back with Standard Life-Global Absolute Return Bond-Gars.
Any thoughts on this,no experience of investing other than what I read.The last few days have me spooked with the price of oil and the current state of China.Any ideas or views please._


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## galway_blow_in (17 Jan 2016)

it looks likely that we are in a bear market now , if we are , then its probably better to wait a number of months as a better opportunity for value might present itself


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## Boyd (17 Jan 2016)

Opinions on GARS
http://www.askaboutmoney.com/threads/standard-life-gars-fund.147621/

Gars seem quite popular lately and i have seen them mentioned in newspapers a lot.


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## cremeegg (18 Jan 2016)

galway_blow_in said:


> it looks likely that we are in a bear market now , if we are , then its probably better to wait a number of months as a better opportunity for value might present itself



This makes no sense.

If we are in a bear market, and I don't know wether we are or not, then now is a good time to invest. A bear market means pieces are low, it is better to buy when prices re low than when prices are high.


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## PaddyW (18 Jan 2016)

I would have also thought along the lines of cremeegg. Get in now while the price is low and get more bang for your buck.


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## landlord (18 Jan 2016)

cremeegg said:


> This makes no sense.
> 
> If we are in a bear market, and I don't know wether we are or not, then now is a good time to invest. A bear market means pieces are low, it is better to buy when prices re low than when prices are high.



With all due respect this does make sense to me....
I would not describe a bear market as one in which prices are low. (Lower perhaps...relatively speaking). 

A Bear market......"The generally accepted measure is a price decline of 20% or more over at least a two-month period."

Late 2007 the Dow Jones peaked. Mid to late 2008 the market had dropped by 20%(bear market). The market then continued to drop to approximately 53% below the peak!!!!!

Also during the year 2000 downturn the Dow Jones dropped significantly below bear market territory. 

Personally I would also wait. 
I believe this downturn will be far worse than the last two, but I know I am in the minority. 
I am also aware that my point of view would generally be perceived to be one where an investor is effectively timing the market.......(generally frowned upon approach!!)


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## galway_blow_in (18 Jan 2016)

cremeegg said:


> This makes no sense.
> 
> If we are in a bear market, and I don't know wether we are or not, then now is a good time to invest. A bear market means pieces are low, it is better to buy when prices re low than when prices are high.



a bear market means a drop of 20% from the highs , i know we have not dropped that far on the u.s markets yet , if we do however get there , its not like we will bounce back immedietely upon hitting 20% , the risk is to the downside right now , of that there is little doubt , a correction and a bear market are two different things , a correction allows one to buy on the dips , in a bear market , the trend is always down with thee odd bear market rally , doesnt matter how well many companies are doing , stock price will go down , take GM for example , forward PE of around seven , raised outlook and dividend last wednesday , stock dopped about 6% last thursday on friday , good news doesnt matter in a bear market 

id at least wait to see if the 1830 intraday low from last august holds ,if it doesnt , there is no support for about 10% below , the amount of shorting alone will almost certainly  ensure this point is tested 

OP , you could always put some of your funds in now and buy on the way down


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## galway_blow_in (18 Jan 2016)

landlord said:


> With all due respect this does make sense to me....
> I would not describe a bear market as one in which prices are low. (Lower perhaps...relatively speaking).
> 
> A Bear market......"The generally accepted measure is a price decline of 20% or more over at least a two-month period."
> ...



no one really knows but i doubt its anywhere as bad as 2008 - 2009 as the entire global banking system appeared to be on the brink , that was the worse sell off since the 1930,s when you consider the market really was flat from the high of 2000 to 2007 with a bear market inbetween from 2000 to early 2003 , the energy market is down more than it was in 2008 in many cases and the mining sector is down more than it was back then , while the commodties rout is unprecedented , its not as systematically important as the banking sector , not near


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## Sarenco (18 Jan 2016)

landlord said:


> Personally I would also wait.
> I believe this downturn will be far worse than the last two, but I know I am in the minority.
> I am also aware that my point of view would generally be perceived to be one where an investor is effectively timing the market.......(generally frowned upon approach!!)



How will you know when its safe to invest in stocks again? 

The S&P 500 has declined by 20% or more on 12 separate occasions over the last 70 years but is up nearly 15,000% per cent over that period.

Many of the world's stock markets have declined by 20% or more since last spring.  Would you prefer to buy something for full price or when it's on sale? 

You think an even bigger sale is just around the corner?  You might be right.  Or wrong.  Who knows?


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## galway_blow_in (18 Jan 2016)

Sarenco said:


> How will you know when its safe to invest in stocks again?
> 
> The S&P 500 has declined by 20% or more on 12 separate occasions over the last 70 years but is up nearly 15,000% per cent over that period.
> 
> ...



most markets ( major ones ) are still priced higher than the historical average right now


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## Sarenco (18 Jan 2016)

galway_blow_in said:


> most markets ( major ones ) are still priced higher than the historical average right now



Relative to what?  Government bonds?  Real estate?


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## galway_blow_in (18 Jan 2016)

Sarenco said:


> Relative to what?  Government bonds?  Real estate?



average historical PE for the s+ p is 15 , its 17 today


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## Sarenco (18 Jan 2016)

Well, the WSJ had the forward PE of the S&P at 15.65 as at market close on Friday last.

But my point is that all valuations are relative.  Look at the inverse of the PE ratio and compare it with bond yields.  How do you value equities in a world where the yield on German government debt is negative out to 5 years?


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## galway_blow_in (19 Jan 2016)

Sarenco said:


> Well, the WSJ had the forward PE of the S&P at 15.65 as at market close on Friday last.
> 
> But my point is that all valuations are relative.  Look at the inverse of the PE ratio and compare it with bond yields.  How do you value equities in a world where the yield on German government debt is negative out to 5 years?



i didnt know you compare equities to bonds anymore than you do apples to oranges , american treasuries are more expensive than stocks and european soverign bonds are even more expensive than american treasuries


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## landlord (19 Jan 2016)

Sarenco said:


> How will you know when its safe to invest in stocks again?
> 
> The S&P 500 has declined by 20% or more on 12 separate occasions over the last 70 years but is up nearly 15,000% per cent over that period.
> 
> ...



We are all currently discussing/comparing past stock market indicators, which is not always a good way of telling what will happen in the future.
It is present economic fundamentals that tell me this stock market is going significantly lower.
Focussing on the US economy.....
Manufacturing is tanking,
GDP is on the way down and constantly being revised further down.
The Baltic dry index is at record lows.
Us debt is sky rocketing.
The US labour force participation rate is poor and the jobs report although good is a lagging indicator and I believe this jobs report will drop significantly in the next few months.
etc....
and that coupled with the emerging market turmoil to me spells trouble ahead!!!

As for when it's safe to invest again, who knows, I guess the same fundamentals will have to be analysed.


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## Steven Barrett (19 Jan 2016)

castle4 said:


> Hi all,
> _ I have recently received an inheritance and have upto 100k to invest.I still have a mortage of 200 k on a very cheap tracker.No debt other than mortgage.
> No current pension in my job but wife is in public service and will have a good pension.
> Our aim is to lock the money away for 7-10 yrs as we will have 2 kids hopefully starting college in 10 yrs time
> ...



First things first, how much do you need in your pot to fund your kids in college in 7-10 years time. Then we can work out the return that you need. We also need to assess the level of risk that you are comfortable with, see if there are any gaps between what you need and what you are comfortable with and address those issues. 

Standard Life have an Absolute Return Bond fund (bond fund that can short the bond market) and the GARS fund which invests in many things (it has a huge amount of different strategies going on within the fund).  The GARS fund has done very well to date although some say the fund has got too big. One thing for certain, you pay for both of these funds. They are at the higher end of cost. 

You have a long enough investment period to invest and make money, even if the markets fall a bit more. If you are uncomfortable with putting all your money in in one go, drip it in over the year, making monthly investments. That way, if markets fall after you made your initial investment, you only have €8,300 in it. Likewise, if markets rise, you will only make on €8,300 and you buy in at higher prices too. 

If there was no risk, there would be no returns either. You have a long term view of what you want your money to do. Don't get spooked by the what has been happening over a number of weeks. 


Steven
www.bluewaterfp.ie


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## Sarenco (19 Jan 2016)

landlord said:


> It is present economic fundamentals that tell me this stock market is going significantly lower.
> Focussing on the US economy.....
> Manufacturing is tanking,
> GDP is on the way down and constantly being revised further down.
> ...



Is there a particular reason why you believe those widely known facts are not already reflected in stock prices?  If it's in the press, it's in the price, etc.


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## Sarenco (19 Jan 2016)

galway_blow_in said:


> i didnt know you compare equities to bonds anymore than you do apples to oranges , american treasuries are more expensive than stocks and european soverign bonds are even more expensive than american treasuries



Well if you are of the view that fixed-income is more expensive (presumably on a risk-adjusted basis) than equities, then logically you would invest in equities?


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## galway_blow_in (19 Jan 2016)

Sarenco said:


> Well if you are of the view that fixed-income is more expensive (presumably on a risk-adjusted basis) than equities, then logically you would invest in equities?





Sarenco said:


> Well if you are of the view that fixed-income is more expensive (presumably on a risk-adjusted basis) than equities, then logically you would invest in equities?



fixed income is where people go at times of uncertainty , regardless of value , you could argue that the logical investment right now is mining or energy stocks , afterall they are historically cheap


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## Gordon Gekko (19 Jan 2016)

But don't mistake the bottom of the page for the bottom...


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## Sarenco (19 Jan 2016)

galway_blow_in said:


> fixed income is where people go at times of uncertainty , regardless of value , you could argue that the logical investment right now is mining or energy stocks , afterall they are historically cheap



I'm not trying to argue that anybody should invest in any particular asset class based on whatever valuation formula you fancy.  I'm arguing that nobody can accurately predict the future and you don't have the benefit of a rear-view mirror in making investment decisions.


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## galway_blow_in (19 Jan 2016)

Sarenco said:


> I'm not trying to argue that anybody should invest in any particular asset class based on whatever valuation formula you fancy.  I'm arguing that nobody can accurately predict the future and you don't have the benefit of a rear-view mirror in making investment decisions.



every decision is made within the context of a specific time , right now , would you be more inclined to invest in equities or wait ? , if i was the OP i would wait as the market has a very negative mood right now , its also been a very long time since there was a major correction , the odds of a bear market are clearly higher today than they were three years ago


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## Sarenco (20 Jan 2016)

galway_blow_in said:


> every decision is made within the context of a specific time , right now , would you be more inclined to invest in equities or wait ? , if i was the OP i would wait as the market has a very negative mood right now , its also been a very long time since there was a major correction , the odds of a bear market are clearly higher today than they were three years ago



The best time to invest in stocks was always yesterday.  When is the second best time to invest?  Today.

I simply do not believe it is, or ever was, possible to time the markets.


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## galway_blow_in (20 Jan 2016)

Sarenco said:


> The best time to invest in stocks was always yesterday.  When is the second best time to invest?  Today.
> 
> I simply do not believe it is, or ever was, possible to time the markets.



with respect , i dont think your in a strong position to be glib , look at whats happening today


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## landlord (20 Jan 2016)

galway_blow_in said:


> with respect , i dont think your in a strong position to be glib , look at whats happening today



In defence of Sarenco,  who I genuinely believe has a wealth of knowledge on the stock market far exceeding most contributors on this site,  stocks do go up and down and if every time investors pulled out there money after a 10 or 15% correction on average they would probably lose money.  I lost approximately 11% by doing this a few months back.  I would like to believe I read the fundamentals correctly at that time,  however I cannot dismiss that it was partly blind luck.  Of course the stock market might rise again in the next few months once again exposing my mistake. Although after looking at all the current fundamentals recently my instincts tell me I made the right decision.


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## Sarenco (20 Jan 2016)

galway_blow_in said:


> with respect , i dont think your in a strong position to be glib , look at whats happening today



My apologies, I didn't mean to be glib - I was simply trying to articulate my point in a single phrase.

I'll try and explain my position in more detail:-

Stocks fell today.  They rose yesterday.  I didn't know in advance that this was going to happen so I didn't take any action.

They might collapse in value tomorrow or they might rocket.  Again, I don't know what's going to happen in the future so I'm not going to take any action today.

I might predict what's going to happen in the future.  My prediction might be right or it might be wrong.  I can use any number of charts and formulae to justify my prediction but ultimately I know that the markets won't necessarily conform to my charts or formulae.

All I know is what happened in the past and today's values.  From this information, I can formulate a reasonable expectation as to what might be the return on my chosen stock portfolio over the medium to long term (15-40 years).  And even then I have to accept that my expectations will almost certainly turn out to be wide of the mark.

I certainly accept that the stock market is not entirely efficient.  The problem is I'm not smart enough to spot the inefficiencies in time to benefit from them.  Nor am I smart enough to pick a manager who will spot and exploit these inefficiencies on a consistent basis on my behalf over my investment horizon.

So there it is - I simply don't believe it is or ever was possible to time the markets.

You are obviously free to disagree with me and if you consistently call market turns over your investment horizon you should become very wealthy.


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## joe sod (22 Jan 2016)

I read an article yesterday on the commodities markets today and how they are dominated by speculators, for example today the oil market is 70 percent speculation and 30 percent industry  buying and selling. However before 1999 it was the opposite 70 percent industry and 30 percent speculation. I think deregulation again in 1999 is the reason for this. A 1.5 million barrels oversupply in the 94 million market has caused this but with speculation really the driving force just the same as speculation drove the price to 150 dollars in 2008.


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## PMU (23 Jan 2016)

If you go to an advisor and ask what's the "best" fund in which you can invest they will come back with what they think is the 'best' fund.  But you really should state your investment objective i.e. 'I've got 100k to invest and need to pay approx. X euro in ten years for my kids' education. So, (a) what strategy do you propose to meet this objective and (b) what financial products do you propose to fulfill this?'

Where I would have a concern with what is proposed is that you are being asked to invest everything in a single fund.   GARS is an absolute return fund and while investing is such products as part of a diversified portfolio of investments may be appropriate, you should reflect if it is prudent to invest all your money in a single product with a single investment policy? Also have the financial advisers demonstrated to you that the GARS objective, i.e. the return on cash, as measured by the European Interbank Rate, plus 5%, over a rolling three year period, before fees, will meet your objective, considering the risks involved in investing all your money in this product?

There is a lot of information on GARS and absolute return investing on the Standard Life web site and it would be prudent to familiarize yourself with this before you invest. Note I'm not knocking GARS and have a reasonable investment in it myself, but it is as part of a diversified portfolio.  If it, or any other part of the portfolio, fails to deliver I'd be hurt but not devastated. If you are investing for your kids' education you have to ask yourself if it is prudent to invest all in a single product, be it GARS or otherwise.


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## castle4 (23 Jan 2016)

Excellent advice PMU,and thanks to all people who posted.I will invest in Gars but also split the sum in maybe savings bonds in An Post and ask my financial adviser to spread the investment over different products.I do not need access to the funds and am just trying to find the right balance between security and a return on my investment.


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## Gordon Gekko (23 Jan 2016)

GARS is a hedge fund. Would you feel comfortable allocating a significant portion of your wealth to a hedge fund?


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## castle4 (23 Jan 2016)

Gordon Gekko said:


> GARS is a hedge fund. Would you feel comfortable allocating a significant portion of your wealth to a hedge fund?


In your experience  Gordon,what would you recommend to invest in.Open to all suggestions .


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## Gordon Gekko (23 Jan 2016)

castle4 said:


> In your experience  Gordon,what would you recommend to invest in.Open to all suggestions .



My worry is that the financial advisers you've met with are more worried about the €5,000 they'll get upfront and the €500 they'll get each year for putting you into GARS.

You mention that the money will be required in 7/10 years and that you've no pension. What's your annual income and how old are you? And the same for your wife? How much debt do you have? What interest rates apply? What other assets do you have?


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