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Investment Planning
Once you have accumulated capital, whether through your hard work, an inheritance or even a lottery win, you need to ensure that the value of your capital maintains its value year on year. Normally when investing money you want two things, capital growth or income and more often than not, both of these at the same time. When contemplating any investment, you need to assess your attitude towards risk and how this compares to the likely return you might achieve. For example, most people want their capital to be guaranteed and to receive a return in excess of inflation (5% as at December 2007). This is not so easily done and often we are faced with the fact that we may have to accept some level of risk, in order to increase the return being received.
We can help you build an investment portfolio that sets out exactly what the potential risks are and the possible rewards that you might enjoy. As with most risk based investments the value can fall as well as rise, however, we can guide you through the maze of investment funds available and help you understand and evaluate what is acceptable to you.
Often by taking some risk you can improve the overall return being achieved. We have provided an example of this below on an initial investment of € 50,000.00 invested for a period of 3 years between 1st January 2005 and the 31st December 2007. Figures are based on gross returns.
€ 50,000.00 on Bank Deposit over a 3 year period, capital guaranteed - 13.50% (EBS SureGrowth) Value at 31.12.2007 = € 56,750.00
This return is lower than the current rate of inflation of 5%.
Alternative Investment Option
€ 10,000.00 on Bank Deposit in EBS SureGrowth, return is 13.50%
Value at 31.12.2007 = € 11,350.00
€ 15,000.00 Invested in Eagle Star’s Balanced Fund (no guarantee) return 41.83%
Value at 31.12.2007 = € 21,274.50
€ 25,000.00 Invested in HIM Guaranteed Fund (guaranteed) return 24.3% per annum Value at 31.12.2007 = € 31,075.00
The maximum amount at risk is € 15,000.00, or 30% of your overall investment. By taking this additional risk the value of your investment after 3 years would have totalled € 63,699.50 a gross return of 27.40% which on an annual basis equals 9.13%
WARNINGS: The income you get from this investment may go down as well as up. The value of your investment may go down as well as up. This benefit may, in some cases, be affected by changes in currency exchange rates. Past performance is not a reliable guide to future performance.
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