Well there is no comprehensive list for this one – when you ask a professional investor, they will often jump to factors such as the economy, sentiment and interest rates. All of these are very relevant factors, of course some have bigger impacts than others. So, we’re going to focus on some of the factors that are more within your control, with our help or through your chosen investment manager.
If we only had a euro for every time an investor panicked and exited the markets after they fell, and for every time investors bought in at the top of the market – well we’d be long retired! We see this all the time; fear in falling markets and people selling as a result, and greed in rising markets with investors then piling in and buying expensive assets. Very often, doing nothing is the right strategy. Don’t try and time the markets, stick to your long-term plan.
The earlier you start investing allows the magic of compound interest to get to work. The longer you then invest allows this compounding to really deliver over time. This is one of the big reasons why we encourage people to take a medium to long timeframe with their investments. Markets are often quite volatile over short periods of time, so investors who are in for the long haul are usually rewarded for doing so, both by higher returns and a more stable journey.
The allocations that are made between different asset classes is a very important decision – how much you are invested in equities, property, bonds or cash etc. Asset allocation is an important driver of investment returns, and is a factor that we spend a lot of time considering when helping clients to build their investment portfolio.
Out-performance in stock selection is a hard one to predict as the focus is so narrow (individual companies) and past performance is not a guide to future performance. Also, just because one investment house outperformed in stock selection in recent years is not very meaningful, a far better guide is to understand an investment manager’s philosophy and stock selection process. Getting your asset allocation right is a more important factor than stock selection.
In summary, let us build the right financial plan for you. We will then consider the right investments to meet your specific circumstances and your appetite for risk. We’ll help you select the right product based on your tax profile and the costs involved. And then we’ll look for this to deliver over time, reviewing and monitoring it to ensure it continues to be the right strategy for you.
Irish Life recently announced their claims payment statistics for 2019, and as before the sums are quite mind-boggling. We thought they are worth sharing with you, as the purpose and value of life cover, specified illness insurance and income protection is in the payment of claims when people face financial adversity. That is of course apart from the security and comfort that people get from having cover in place.
Irish Life pay out over €100,000…. every hour
No, that is not a typo, they paid out €104,563 every working hour in 2019, which adds up to €212 million over the full year. This amount was paid to 4,175 claimants, with the average life assurance claim being €73,688 and the average specified illness claim being €62,202. Just over half the claims were paid for living benefits (illness & accident), with the balance being death claims.
Cancer is still the No.1 cause of death claims
Deaths due to malignant cancer accounted for 44% of all death claims, with heart related reasons being the second most common cause of death. Proving that life assurance is not only for older people, 30% of death claims were paid to people between the ages of 41 & 60. Over 60% of claims were for males and 23 death claims were paid to people outside of Ireland. One claimant had taken out the policy in 1962 – 57 years ago! With the high cost of living in Ireland, people who are on average incomes need cover in excess of €250,000 to replace lost income as a result of a sudden death. However only 5% of claims were for more than this amount. It is very important to have life insurance in place, but it is equally important to review it regularly and ensure you have enough cover. Seven of these claims were for in excess of €1 million each. Another very sobering set of numbers were the claims paid as a result of accidents. 4% of all death claims were as a result of an accident, however this jumps to 31% of all claims paid on the death of under 40’s. Accidents happen in greater numbers to younger people. It was also very sad to see that 9 of Irish Life’s death claims were as a result of road accidents and 1 from a workplace accident.
Specified Illness Cover (SIC) claims were significant too
Cancer accounted for 62% of SIC claims in 2019. What might surprise many people is that 60% of paid SIC claimants were aged between 41 and 60. How long people had their policies before claiming varied hugely – one claim was paid on a policy in force less than 6 months, another was paid on a policy taken out in 1989. The Irish Cancer Society research The Real Cost of Cancer*, states that the average loss of income for a cancer sufferer is €1,527 per month plus hundreds of euros in additional monthly expenses. An average benefit of over €62,000 has made life a lot easier for Irish Life’s SIC policyholders… We always remember when looking at these statistics that there are real people behind all of these numbers. People and families who often have gone through incredibly difficult times. We are happy if we can ease the burden at all, by helping people reduce or remove any financial burden heaped on top of grief at these difficult times.
Sources: Irish Life Assurance plc 2020. *Irish Cancer Society ‘The Real Cost of Cancer’ research conducted by Kantar 2019.
If you currently have a Protection Policy, Investment or Pension Plan set up and you want to ensure that your policy is suited to your current needs, we will review your policy free of charge.
For your Protection Policies we will make sure that you are paying the most competitive premium available on the market. It is important to review protection policies regularly as your circumstances may have changed, if you are now a non-smoker since setting up your policy your benefits will likely be cheaper now, also companies are always updating the benefits offered and therefore you may be able to avail of the newer, more comprehensive, policies at a similar or cheaper price than your existing policy.
With Investments and Pension Plans it is important to re-evaluate your goals set at maturity of these plans and we will assist you in doing just this when reviewing these type of plans. We will ensure that the amount being invested is substantial to meet your goals and also review the funds that your money is invested in, this is recommended as your attitude to risk may have changed or if you are nearing the end of the plan your money needs to be safeguarded in lower risk funds.
These free reviews are being offered for a limited time and are available to all!
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