However, if your mortgage is with one of the active banks, which I suspect it isn't, then you should probably get a tracker mover product instead. Your position would be as follows which would be almost risk-free.
I am always wary about people being over concentrated on property in Ireland, especially the way the market is going at present. It's a big world out there and there are plenty of opportunities to make money off companies with a global reach while keeping your assets liquid.
Savings and investments: 186,000
If you intend moving soon, keep the money in cash so it can be used for a deposit. If not, invest it.
We may in the next 2-3 years buy a new house to live in
We may in the next 2-3 years buy a new house
Ages of children: 2 and 4
There is a solid argument that if you are really planning to move you should do so before the eldest starts school and therefore reduce disruption once they do. It also makes it easier to get places in schools - especially in over subscribed areas (depending on where you are planning to move to).
Currently 145k cash, 40k shares. 12 months ago it was the other way around, I have been selling shares to free up cash in anticipation of house buy.
Yeah it will be September this year. We always felt we could push it to moving within his first 3 years of school. Not ideal but should be ok.
I believe there is a clause in this new legislation saying if nature of the tenancy changes you can go beyond the 4 %.
Even with the low yield its ok as it is unless interest rates go back up to 3/4/5% which they will at some stage.
The probability of stocks materially outperforming cash over such a short holding period is modest and the downside risk is substantial. This chart shows the historic probability of suffering a real loss on stocks over different time periods (based on long-term S&P500 data through 2015):
..especially for someone like aristotle who can handle the risk.
This isn't really about an individual's risk tolerance.
It's about whether the odds of equities outperforming cash over such a short holding period are such that it's "worth" taking a punt with money that you know you are going to need at the end of that period.
If aristotle buys shares and they drop by 50% over two years, his plans will not be affected. He can still sell one of his investment properties and do the trade up he wants.
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