# 10k to invest for the long-term - any ideas?



## Prancer (25 Jan 2010)

Hi,

I have EUR 30k invested in EBS's Summit Growth Fund, which is currently worth a little over 22k. I now have a further 10k to spare and am thinking of topping up this investment to 40k while unit prices are low. I'm happy to sit on it for 5+ years. However, I've seen criticism of EBS Summit Funds elsewhere on this forum since they moved to Irish Life Investment Managers and, in any event, would like to see what other suggestions readers have. I will probably stick with the Growth Fund but maybe there are other equity-linked funds or other lower-risk investments out there people would recommend? I am still attracted to the stock market despite my recent losses but don't want to buy individual shares.

Another option I'm considering is Halifax to get the 3.75% bonus rate they're offering on the first year of new a/cs up to 10k. But I'm thinking that if I take the risk on shares now the market will probably have recovered by more than that this time next year.

Other info:

Self-employed, 35, avg. earnings ca. 50k p.a. Married with first baby due Aug.

Thankfully, only 70k/6 years left to run on a 152k mortgage taken out in 2002. We've paid 40k extra off this in the last three years in lump-sum repayments and an extra couple of grand through higher fixed monthly repayments.

No other loans, no credit card debt.

Have 8k in Rabo on-demand savings a/c at 2%. Currently paying 500 a month into my pension and have been maxing it up at year-end when necessary to get the 20% tax relief.

Anyway, looking forward to hearing your thoughts!


----------



## Markjbloggs (25 Jan 2010)

Does the phrase "good money after bad" mean anything to you?  




Prancer said:


> Hi,
> 
> I have EUR 30k invested in EBS's Summit Growth Fund, which is currently worth a little over 22k. I now have a further 10k to spare and am thinking of topping up this investment to 40k while unit prices are low. I'm happy to sit on it for 5+ years. However, I've seen criticism of EBS Summit Funds elsewhere on this forum since they moved to Irish Life Investment Managers and, in any event, would like to see what other suggestions readers have. I will probably stick with the Growth Fund but maybe there are other equity-linked funds or other lower-risk investments out there people would recommend? I am still attracted to the stock market despite my recent losses but don't want to buy individual shares.
> 
> ...


----------



## Prancer (25 Jan 2010)

Please elaborate


----------



## b4nd1t (26 Jan 2010)

Prancer said:


> Please elaborate



It is called the sunk cost fallacy.


----------



## samk00 (26 Jan 2010)

Something I've been looking at myself recently for what its worth. BES is tax relief for investing in start up companies. You get 41% relief 3 months after they start trading & money has to stay in for 5 years. From what I hear generally 12.15% return compounded over 5 years incl the tax relief. Risk is that the startup does not do well and you lose your money (or 59% of it & no return). 

Best to pay towards the end of the year so it counts for the tax year.

Example

Year 0 – Pay (€10,300) incl 3% issue costs
Year 1 – Receive tax relief €4,100
Year 5 – Potential share value after 5 years €11,000

Net investment is €6,200 which you turn into €11,000 in 5 years, perhaps!


----------



## PMU (30 Jan 2010)

Prancer said:


> I have EUR 30k invested in EBS's Summit Growth Fund, which is currently worth a little over 22k. I now have a further 10k to spare and am thinking of topping up this investment to 40k while unit prices are low. I'm happy to sit on it for 5+ years.


    I’m also an investor (i.e. loser) in this fund, and I would strongly suggest that you find a better place for further investment elsewhere (e.g. a diversified spread over various asset classes). 
  Simply put, this fund is an absolute A1 f*cking DOG. First of all, not only is its performance dreadful, but it’s questionable if it’s actually a ‘growth’ fund. If you look at the two stocks the fund, according to its recent quarterly report, has just purchased, one is a clear value play (i.e. a company whose P/E ratio  is low due to a possible legal action) and the other had a rights issue last year, i.e. they are not growth stocks – stocks that grow on re-invested earnings.  Also, if you compare the top 10 holdings in this fund with the top 10 holdings in the iShares Growth [IDJG.L] and the iShares Value [IDJV.L] ETFs, this fund has 1 share [Bayer] in common with the Growth ETF, but 2 shares [E.ON; BNP Paribas] in common with the Value ETF.  

  I’m down only a couple of hundred euro (this is after 5+ years), and yet I’m hopping mad at my stupidity for buying this piece of CR*P (and for not cashing it in when it peaked in August 07).
  Personally, I’ve set a target at which I’ll cash in (even if this means taking a loss, as I’ve a better place for my money).  You’re down a significant amount of money, and the main risk for you is that the fund may start to decline again before you break even in nominal terms, so your wait could be along one.  
  But I strongly advise you do not invest further in it and throw good money after bad.


----------



## taytoman (5 Feb 2010)

At least if you leave you're 22k in the ebs fund, any growth between 22k and 30k is tax free- if you take the whole lot out and put it elsewhere, any growth will be taxed at 25%

Taytoman


----------



## mercman (5 Feb 2010)

And in the main there are very very few BES schemes that have worked out in profit for Investors.


----------



## Eithneangela (6 Feb 2010)

Without meaning to be facetious, can I suggest the Bertie system.  Take the €10K, handle it lovingly and put it into a shoebox somewhere safe (I assume with all of your financial stuff that you have a fireproof safe at home).  Who knows what tomorrow brings - you've got loads of stuff invested - keep this close!


----------



## Prancer (11 May 2010)

Thanks again everyone for your advice a few months back. I've taken it on board and decided not to invest any more in Summit Funds (though the fund has since recovered slightly to 23.5k).

Unfortunately I went ahead and opened a Halifax account for the 10k, which of course didn't last long... I've had to close my a/c and I'm now back to square one. Now planning to pool most of my savings, 25k, into the EBS 15-month term deposit at 3.19% aer, because my RABO on-demand a/c at 2% isn't going to do as much for me. Good idea? Any other suggestions as to how best to save 25k appreciated! I don't want to lock it away for any more than 15-18 months.


----------



## Rory Gillen (13 May 2010)

What's your timescale Prancer ? and have you considered just paying off some more of the mortgage ?


----------



## Prancer (14 May 2010)

Yes, I thought of that but read elsewhere here on AAM about weighing up whether to save or pay a lump sum off the mortgage. Since I'm currently still only paying 3.23% on the mortgage and I can earn almost exactly the same (3.19% aer) on EBS's 15-month fixed-term savings account, I've decided to stick with savings for the moment. I'll still keep a few k in a demand a/c so I can pay off some more of the mortgage if (when!) my variable rate goes back up over 4%. Don't want to lock away savings for any longer than 18 months.


----------



## starman60 (14 May 2010)

Have you looked at An Posts National Solidarity Bond.?? Invest your 10k and after 10 years get 15K. You will receive 1% every year and a tax free lump of 40% after the 10 are up and no penalties if you draw your money early.


----------



## ronaldo (16 May 2010)

Have you considered ETF's. I've sold all my individual shares and am switching to an ETF strategy. You can get Growth ETF's but the following is what I'm going to be investing in:

SPY - For US Large Cap
IWM - For US Small Cap
EFA - For Europe, Australasia, Far East
EEM - For Emerging Markets


SPY is the S&P 500, IWM is the Russell 2000, EFA has these holdings and EEM has these holdings.

EFA charges 0.35% per year, EEM charges 0.72% per year, SPY charges 0.11% per year and IWM charges 0.24% per year. I'm pretty sure all these will be much better than the EBS fund and a portfolio built with them should be better diversified.

If you're only trading a few times a year, make sure to choose a broker with no maintenance fees. 

Personally, I'm with Interactive Brokers. They have a minimum monthly fee of $10 and if your commissions don't reach this milestone in a month, they charge you the difference.

Stock and ETF trades cost $1 per 200 shares and they have VERY good rates for exchanging currencies. You can lodge Euro's and transfer it to any currency with them for much, much better rates than any local banks.


----------

