Quinn Life Freeway - question re irish shares

[kiki35]

hi,

I have a fund with Quinn and I put in a monthly amount of 500 euro. At the time of opening the account, I did some research/asking around and based on various responses, I set up an account 60% Euro stocks and 40% celtic stocks. Obviously, the value is lower now than what I have put in, due to the irish stock market. I know I am in for the long haul, so I am not overly concerned about that (may be I should be??) but I just read on the website that I can do 2 free switches each year. I have never done that, but was thinking that I should possibly pull out of buying 40% irish shares now for a while. My husband thinks now is the time to be buying them cos they are cheaper and I should leave it all alone and forget it for 5 years. Anyone any further tips?? What would be be a good ratio? Thanks.

 

[GeneralZod]

This morning using the on-line interface I reduced my premiums from 500 to 250 per month and changed the fund mix for future premiums (60% euro, 20% uk, 20% celtic). The other 250 will go into a deposit account. It was very easy to do. I intend reviewing the situation every three months and increasing the premium again when things look like improving.

 

[shanegl]

hi,

I have a fund with Quinn and I put in a monthly amount of 500 euro. At the time of opening the account, I did some research/asking around and based on various responses, I set up an account 60% Euro stocks and 40% celtic stocks. Obviously, the value is lower now than what I have put in, due to the irish stock market. I know I am in for the long haul, so I am not overly concerned about that (may be I should be??) but I just read on the website that I can do 2 free switches each year. I have never done that, but was thinking that I should possibly pull out of buying 40% irish shares now for a while. My husband thinks now is the time to be buying them cos they are cheaper and I should leave it all alone and forget it for 5 years. Anyone any further tips?? What would be be a good ratio? Thanks.

Well, what's your reason for not putting any more money into the Celtic fund? If you think it won't gain any value then you should take all the money out and put it to better use (you can re-allocate it all to a different fund as well as redirecting future premiums). If you think it will in the long run still perform well then you should be happy that your 500 is buying more units of the fund as they're cheaper.

 

[PMU]

changed the fund mix for future premiums (60% euro, 20% uk, 20% celtic). The other 250 will go into a deposit account.

So you’ve now got an asset allocation of 40% euro equities; 10% foreign equities; and 50% euro cash. Do you not think this is slightly overweight in cash, especially when the solvency of major financial institutions is being questioned, USB has today downgraded three IE banks, and interest rate cuts in the US and most likely soon in the UK will leave the euro relatively overvalued? If the interest rate cuts and tax refunds in the US work they will boost the US economic growth rate, so is it not better to switch to US equities rather than euro cash?

 

[shanegl]

If the interest rate cuts and tax refunds in the US work they will boost the US economic growth rate, so is it not better to switch to US equities rather than euro cash?

That's a big if!

 

[z109]

So you’ve now got an asset allocation of 40% euro equities; 10% foreign equities; and 50% euro cash. Do you not think this is slightly overweight in cash, especially when the solvency of major financial institutions is being questioned, USB has today downgraded three IE banks, and interest rate cuts in the US and most likely soon in the UK will leave the euro relatively overvalued? If the interest rate cuts and tax refunds in the US work they will boost the US economic growth rate, so is it not better to switch to US equities rather than euro cash?

That's UBS and they are an investment house and have downgraded their price targets for the three Irish banks:- they see AIB and Anglo falling in price and they see BoI remaining roughly the same.

This has nothing to do with the deposit security or financial soundness of these banks. It relates only to likely (what UBS see as likely) future earnings of the banks.

Analyst upgrades/downgrades/reaffirms happen all the time. BoI, for example, has been a sell, a buy and a neutral according to different investment analysts in the last six months. IMO they are talking out of their hoo-hah whatever course they have recommended. They have been wrong 11 times out of 8 over the last half year. 103% of analyst recommendations are made when they come back from the pub.

 

[GeneralZod]

If the interest rate cuts and tax refunds in the US work they will boost the US economic growth rate, so is it not better to switch to US equities rather than euro cash?

If the dollar's decline reverses and US equities start growing again then yes. I'm taking the bet that both of those won't happen in the short term. I've actually stopped putting money into US equities for the moment. I'm happy to have the vast majority of my liquid assets on deposit in cold hard cash while the equity and property markets are falling.

 

[kiki35]

well, I guess that is my question so - what do people think of the future of the irish stock market (say in 5-7 years)?

 

[z109]

No idea where the ISEQ is going, but the Irish stock market accounts for something like 0.2% of global stock markets, so its probably not wise to bet the house on it!