The key is time, not timing

Given that the European Central Bank base rate continues to remain at 0.0%, returns from bank deposit accounts are now at an all-time low. This trend is likely to continue for the foreseeable future meaning the real value of your savings held on deposit is gradually being eroded.

Due to the risks and uncertainty in the stock market, many would be investors have decided against investing and continue to hold monies on deposit. At Money Plus, we understand why some may have adopted this approach.

The last 12 months has seen a period of short term stock market uncertainty – the slowdown of Chinese economy, the unexpected Brexit referendum result not to mention Donald Trump’s inauguration as President of the USA. 2017 could see more of the same with respect to prolonged periods of volatility.

Having said that, the US and UK stock markets are at all-time highs and returns from investment funds have continued to grow against this backdrop.

The table below shows recent returns from a suite of low-medium risk funds. These multi asset funds are risk controlled in line with ESMA (European Securities and Markets Authority). The ESMA scale ranges from 1 – 7 with 1 being low risk and 7 high risk. The scale is a measure of low, medium and high risk funds available in the market place. It is clear that, over time, the returns achieved are superior to those available via bank deposits.

Low-Medium Risk Multi Asset Funds (ESMA 3 like risk rating) – Performance to 08/03/2017

Provider Fund YTD 1 Year 2 Years 3 Years
Aviva Multi Asset Cautious 0.21% 3.21% -0.05% 10.12%
Friends First Compass Cautious 0.49% 4.48% 2.68% 16.39%
Irish Life Multi Asset Portfolio 2 1.08% 5.13% 4.45% 13.04%
New Ireland iFunds 3 Net 1.00% 3.82% 1.46% 9.44%
Standard Life MyFolio Active 0.78% 4.14% 0.82% 11.13%
Zurich Life Prisma 3 1.56% 6.07% 3.81% 14.58%


Note: Performance returns shown above are net of Annual Management Charge (AMC).


– Past performance is not a reliable guide to future performance.

– The value of your investment may go down as well as up.

– Funds may be affected by changes in currency exchange rates.

– If you invest in the above funds you may lose some or all of the money you invest.

At Money Plus, our basic approach to investment can be summarised in the following five core principles of investment:

1. All investment strategies involve some form of risk. What is perceived to be a relatively ‘safe’ investment (e.g. cash deposits) may not keep in pace with inflation. As a result, the risk here is that you may not achieve your investment objectives.

2. Time, not timing, will deliver returns. Successful investing is about time rather than timing. Investors are unlikely to achieve their investment goals by simply waiting for the right time to invest. History has shown that those who allocate sufficient time to investments will be rewarded. Indeed by taking a degree of investment risk in line with ones attitude to same, investment objectives are much more attainable.

3. Asset allocation is the key decision. Research has shown that the mix of equities, bonds, property and cash in a portfolio is the main driver of the return achieved by portfolios.

4. Real Assets may outperform cash over the long term. Over longer time periods, real assets such as equities and property have typically enjoyed higher returns than the return on cash deposits.

5. Diversify to reduce risk. The “don’t have all your eggs in the one basket” principle is fundamental in managing risk. This is one of the main reasons why investment in multi asset funds has become very popular over recent years.

In summary, if your investment objective is to maintain / grow the value of your surplus funds, then provided your intended timeframe is to invest for 5 years or more, we will ensure that our recommended investment strategy is compatible with your tolerance for risk.

The key is time, not timing – talk to us….