Currently investing in Funds... time to stop?

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seanied

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i am currently saving €250 in a BOI savings account, which i am getting something like ECB +2.25%. I am also investing €250 into 2 Rabo funds, I have been doing this for over a year and am down €500 at the moment.
This is not a major concern as it is a 5 year investment, but from reading a few articles recently would i be better diverting this money into my BOI savings account?
Any advice would be appreciated
 
Re: Currently investing in Funds... time to stop??

Well you got hit with the dear units so you might as well hold on for the cheap ones. It has been proven time and time again that the safest way to go is the cost averaging method. If you stop paying in when your value drops you are compounding the problem.
 
>> It has been proven time and time again that the safest way to go is the cost averaging method.

> Timing the market is a mug's game.
> http://en.wikipedia.org/wiki/Dollar_cost_averaging

According to that wikipedia link:

"Dollar cost averaging has been widely criticized by economists and academic finance researchers as more of a marketing gimmick than a sound investment strategy (a way to gradually ease worried investors into a market, investing more over time than they might otherwise be willing to do all at once). Numerous studies of real market performance, models, and theoretical analysis of the strategy have shown that in addition to having the admitted lower overall returns, DCA does not even meaningfully reduce risk when compared to other strategies, even including a completely random investment strategy."

It would appear that HighFlier/Clubman's advice is at variance with some experts. Caveat emptor.
 
Do not buy into a falling market - you will lose money - simple as.

The ISEQ has dipped 50% in 12 months - building and financial dragging all retail related with it - this is worst case and more is likely to come, this fall is only on the back of a house price crash / recession that is only starting globally, we were one of the boats that rose with a global tide.

The only reason that other more global markets have not been hit similarly is that they have a healthy diversified mix (ie not like the ISEQ dominated by building and financial) - whilst their own building and financial stock dips, the spread of commodity and manufacturing holds up. However guess what happens in a global recession, commodities and manufacturing fail as well thus the ISEQ crash is only a precursor to what will happen to larger equity markets elsewhere. Global equities are not safe currently

Dollar cost averaging only (at best) works in normal trading conditions - nothing at the moment globally is normal, the wheels are coming off the FIRE economies and globalisation is magnifying the bad impacts locally.

At the moment - cash, my friend, is king.
 
> What advice? I simply linked to the article!
No, not so. You actually offered the advice: "Timing the market is a mug's game."
 
This is only my opinion but I think you have a nice balance. One half secure and a bit of risk with the other. If you are adverse to risk then pull out, if you want potential large growth keep going with fund but don't cry if lose out. As Paul Brady says "No use in asking the answer is nobody knows"
 
Ok. In the context of seanied's query, where he has to recoup his capital loses, generate a return to match his anticipated deposit account return, and (one assumes) generate an additional return to compensate him for his market risk (and charges) and he has a further 4 year investment horizon: is this good advice?

On balance, my opinion is that it's a risky option. If I couldn't extend the investment period beyond 4 more years, I'd be tempted to cash in.
 
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