# Quinnlife or Anglo Irish Bank for Child benefit savings?



## Shaz (12 Jul 2008)

Hi, 
I intend to build up a savings of my child's child benefit and was wondering whether now is a good time to invest in Quinnlife Freeway Funds or to start off with the Anglo Irish Bank Regular Savers A/c at 8%, considering the current economic climate? 

Thanks.


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## GeneralZod (12 Jul 2008)

When do you plan to access the funds? If it's in the short term the Regular Saver is the safest option.

You could be optimistic and hope that the markets QL Freeway Funds are based on are near the bottom but there's more chance right now that they'll continue on down.

Periodically look at what the markets are doing and hold off until what looks like a sustainable recovery starts.


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## ClubMan (12 Jul 2008)

Comparing a deposit account (even a high rate regular saver) with an equity based unit linked fund is not really comparing like with like. 


GeneralZod said:


> Periodically look at what the markets are doing and hold off until what looks like a sustainable recovery starts.


Timing the market is a mug's game.

For what it's worth there are many existing threads dealing with suggestions on where to save for for children.


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## GeneralZod (12 Jul 2008)

ClubMan said:


> Timing the market is a mug's game.



I suspect that's truer when markets aren't trending so heavily up or down.

Over the last 10 years cost averaging into the market irrespective of prevailing conditions has been a mug's game.


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## ClubMan (12 Jul 2008)

GeneralZod said:


> I suspect that's truer when markets aren't trending so heavily up or down.


I disagree. Timing investments to coincide with the start of upward trends is a matter of luck and not judgement and the former is no basis for prudent investing.


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## MugsGame (12 Jul 2008)

ClubMan said:


> Timing the market is a mug's game.



Someone's been reading


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## ClubMan (12 Jul 2008)

You mean it's a mug's *job*? 


> Occupation
> Timing the market


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## techman (14 Jul 2008)

"Over the last 10 years cost averaging into the market irrespective of prevailing conditions has been a mug's game"

Don't want to go too far off topic in this thread but dollar cost averaging ignoring all other factors is the whole basis of lots of investment strategies and have proven to work over time.

For example, ILTB's investment strategies are based on dollar cost averaging and the data proves their worth.

I have no ties with ILTB.


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## ClubMan (14 Jul 2008)

_ILTB_? _Invest Like the Best_? Something else?


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## irishlinks (15 Jul 2008)

Shaz - there is also the AIB parent saver which is paying 10.25% on regular savings . Aimed specifically at people with children. 
-----------------------
Money Guide


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## techman (15 Jul 2008)

[broken link removed] = Invest Like The Best


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## Scanner (28 Jul 2008)

_Clubman,  I cant say I agree with you here.  I have read this many times on AAM and dont understand why people have such a hangup about trying to time the market. _

_Take this week for example, would you go and buy E10000 worth of shares on Monday morning or would you wait until maybe Wednesday to see what happens?_
_Lets say you decide to buy on Monday but the markets are down, so you wait till Wednesday and the markets are still down, so you wait till Friday and the markets are still down.  So a whole week has gone by and the markets are down.  _
_Then the next week the markets are up on Monday, would you buy then or do you still think you should not have tried to time the market and bought the previous Monday ?_
_I agree the markets may then fall for the rest of the week but at least you start off in a better position than you would have if you had bought the previous week._

_Whats wrong with this ?_

_Rgds_
_Scanner_


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## declanh (28 Jul 2008)

Because, given your example, if you had tried to time the market, and decided to plump the whole amount in on the 1st Monday, then you have lost money, - because your "timing" is wrong.
Rather than the fact that investment is for the long term, and should be based on asset allocation and money management rather than timing.

Timing is for a golf swing.


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## Scanner (28 Jul 2008)

Declanh, thanks for your reply.

The whole point about my example is to explain why you would try and time the market. 
Ie,  You would not buy on the 1st Monday, you would wait until the Tuesday and Wednesday etc,etc until you think its a good time to buy.

I still dont see why its not prudent to do this.

Why would somebody buy shares in todays market.
Look at Ryanair today for example, if you had not tried to time the market and bought shares in airline stocks today you would be hammered from the beginning.

Rgds
Scanner


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## declanh (28 Jul 2008)

You can be in the market - long and short - timing it on the long side is not the only game in town.
Additionally, there is a short term, and a long term aspect to evaluation how to weight you asset allocation. If you think that the general momentum of the market is up, and you want to move more assets to equities, then that is a reasonable proposition to do. If you think that it is down, and want to be overweight in other asset classes - such as cash then that is reasonable as well.
Methinks that your examples - given that they are based on the days of the week - are much more short term - and thus are more of a traders mindset than an investors - but whichever you choose to be - good luck with it!


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## zephyro (29 Jul 2008)

Scanner said:


> You would not buy on the 1st Monday, you would wait until the Tuesday and Wednesday etc,etc until you think its a good time to buy.


 
And how exactly would you know when is a 'good' or 'bad' time to buy?


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## Scanner (30 Jul 2008)

If the price is falling, dont buy, if the price is increasing then buy.
Sell then when the price increases and your happy with your profit or else keep it if the price falls and pray it increases again.
If the price falls on Monday and Tuesday and Wednesday and is still falling on Thursday, I would not buy on the Thursday.

Am I missing something here ??

Scanner


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## foxylady5160 (30 Jul 2008)

Hi Guys,

I'm on the hunt at the moment for the best deals with my Children's Allowance. I would say the Anglo Irish coming out tops because you can lodge up to €1000 per month and this is suitable for the Early Childrens Allowance every quarter as well. The only draw back is you can't access the funds for the 1st 6months and after 1 year this will be up. However, I'm sure they will be deals come that time again with other saving option.


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## PMU (30 Jul 2008)

Scanner said:


> Am I missing something here ??Scanner



Yeah.  Proof


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## Scanner (30 Jul 2008)

" Yeah. Proof "

Huh !!  What does that mean ?


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## Janman07 (31 Jul 2008)

OP:

_Hi, 
I intend to build up a savings of my child's child benefit and was wondering whether now is a good time to invest in Quinnlife Freeway Funds or to start off with the Anglo Irish Bank Regular Savers A/c at 8%, considering the current economic climate? 

_While I tend to agree with Clubman in that the top or bottom of market movements are only obvious in hindsight, investing in the stockmarket (for long term investors) must be a better bet today than it was 12 months ago. Short term, things will no doubt get worse before they get better and the volatility is enough to make anyone nervous.

Money invested for the long term is better off invested in equities as normal deposit rates mean that your money loses value in real terms (after inflation). However, the banks are currently offering high regular saver rates because they need to show deposit inflows on their balance sheets. This will not last forever and neither will they allow you to build up substantial funds at those rates. In my opinion, 8% risk free is too good to pass up in the current climate. When they pull the rate in 6/12/18 months markets may be more stable and returns may offer an acceptable risk premium over cash deposits.


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## PMU (1 Aug 2008)

Shaz said:


> Hi,  intend to build up a savings of my child's child benefit and was wondering whether now is a good time to invest in Quinnlife Freeway Funds or to start off with the Anglo Irish Bank Regular Savers A/c at 8%, considering the current economic climate?  Thanks.


 
  It’s unlikely the current relatively high interest rates will be of long term duration.   Historic returns for cash in Ireland were on average about 4% [I think] and since we joined the euro it’s 2.4%. The long-term historic annualized return on equities is about 9.8%.  Equities win hands down in the long term, so you should invest the child benefit for the long term in euro-denominated equities, such as via the QL Eurostoxx50 tracker.   You can feed the benefit payment in each month and forget about it until the benefit ceases when your sprog is 16 or 19.  Alternatively, if you have some spare cash available now, you could calculate the net present value of the future stream of child benefit payments and invest such an amount as a one-off lump sum in a euro equity tracker.    This would get around some of the performance problems relating to cost averaging, highlighted by other posters.



Scanner said:


> " Yeah. Proof " Huh !! What does that mean ?


  In your post of 30 July 5:08 pm, you made three hypotheses that imply stock price movements do not follow a random walk.  So you should be able to offer some proof, based on stock market prices (easily downloadable from Yahoo! Finance), that what you say will give an investor some edge over chance.  Otherwise, a naive investor could follow your advice and lose money. So let’s see some proof.


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## Scanner (3 Aug 2008)

PMU,
Firstly, I did not imply, nor intend to imply that stock price movements do not follow a random walk.
There are many economists that agree that the Random Walk theory is not the only show in town,   I would leave that debate to the experts.
I, like yourself, cannot predict the rise or fall in share prices, but what you can do is try and minimise your losses by trying to ascertain when would be the best time to buy into a market.
For example, anyone who would suggest buying into the ISEQ at the moment would need their head examined as it has been in freefall for the last year.
You do not need a degree in economics to know that you can afford to wait if you see the market falling. 
You can use the ISEQ over the last week as proof if you need it that waiting in a falling market is worth the wait. 
You can take a chance and hope it increases or you can give yourself the edge that your talking about and hold off for another week and see if it goes lower before deciding to buy in. 
QUOTE
"Otherwise, a naive investor could follow your advice and lose money."
A bit cutting that remark, apart from the fact that any so called naive investor would have saved money if they had followed my advice.

Rgds
Scanner


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