Continue paying into a dropping market?

D

Dman

Registered User
Messages
71
Hi Folks,
I'm just throwing the following question out there and see what you guys think.

I've currently got a fund with Quinn Life tracking Irish (20%) European (30%), Latin America (25%) and China (25%) markets.
As per nearly all similair funds it has been performing very badly for the past 4-6 mths.
I'm paying monthly into this fund and see it as an long term investment e.g. 5 - 10 yrs.
I'm paying X amount per month but I'm starting to get a bit conceren re this investment.
I'm worried that maybe I could be throwing good money after bad into this fund.
However the other way to look at it I suppose is that I'm currently buying the funds each month at cheaper and cheaper prices.

I'm new enough to this type of investment, so trying to understand the best way to proceed.
As I see it I've a number of options
1. Contiune paying my current monthly contribution and hopefully 'ride' this out.
2. Lower my monthly contribution and put extra money into high interest saving account, and once the markets pick up increase my monthly contribution.
3. Stop paying my monthly contribution but leave my money in the funds and hopefully they increase again.
4. Stop my monthly contributions and cut my loses by taking out my money out.

Is anybody else in the same situation?
 
You have another option also, you can switch funds with Quinn Life to safer ones. If I were you I'd sit tight, your investment horizon is long enough. By the way, I have a similar fund spread to you invested through Quinn monthly in my pension, I'm not moving it. Predicting the top and bottom of markets is something professionals struggle at, let alone us mere mortals.
 
I am in a similar situation with a Rabo fund from Robeco (Emerging Markets D Eur). I intend to ride it out. Like you, it's a 5 year fund and I'm only in it 6 months. These funds tend to experience dips and then recover.
 
On the other hand. I would like to invest in a fund at present. Does it seem to be a good time to invest in one ?.
 
No time like the present. You might decide to put it on hold until you see indications that we've hit the bottom in whatever market you wish to invest into. But timing that bottom like I said is almost impossible. Think SSIA. Start your monthly contributions, forget about it for a couple of years, then do a performance review. If you put off the saving/investing habit you might just spend the money elsewhere.
 
I seem to recall that when the SSIAs started off, the stock markets dropped and those who had deposit based SSIAs were quite smug about it. However, over the 5 years, the equity based SSIAs trounced the deposit based SSIAs.

Maybe you should suspend your monthly payments, put the monthly amount into a high rate a/c and get back in when things improve. Of course, you may very well miss the start of the rally. Rises in teh maekets tend to be lurches, followed by plateaux. There are very few days where theer are significant rises, so it's very easy to miss them.

Slim

PS: This is not advice as I can't decide when to get into the market right now either. Watch today's news as the Fed may determine the direction of the market for the rest of the week.
 

what sort of track record does quinn life have, financial funds are like any product you buy, there are good ones and bad ones, i would put my money into funds that have a long and robust track record and that have dealt with financial crisis in the past, many of the irish based funds are fairly new and have never handled a serious crisis like we have now
 
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