Over the last year we have seen a major dimunition in the value of Irish shares generally. In particular though, the Irish banks have been affected more than most. In recent weeks speculation has surfaced in the national press about a possible takeover of Bank Of Ireland due to it's low share price. You may have heard or saw the ISEQ fall seemingly day by day for the past months and wondered about your pension fund and how it is doing.
Well let me answer this simply. Not well. Not this year or last for that matter. But then the question you should be asking yourself is why am I still putting money into a falling market? Why have I not switched my pension fund to bonds long ago? Ok, you don't know anything about stocks and shares, I understand. I am only an observer either.
Anyway there is no point in crying over spilt milk. The horse has bolted and so on. Is there something positive that you can learn from this last period of financial turbulence. Well I think there is; that is to pay attention to your pension fund more closely. Do you know anything about the investments that your money is being used for. If you don't, now might be a good time to go nosing about and finding out.
Don't get me wrong, I am not advocating that you switch your pension fund into cash bonds now. That would not be wise, as it would crystallise your loses. Stay the course with what is already invested in stockmarkets and be consoled that any new investments being made on your behalf are, given such low stock prices currently, probably good value for money. We must retain faith in the markets and hope that in time they will recover.
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5 comments:
The following article from Forbes suggest that Irish Banks have nych further to fall. i disagree with your comment about crystalizing loses - investors should cut their losses, if they have not done so already.
http://www.forbes.com/2008/07/08/ireland-bank-allied-markets-equity-cx_po_0708markets08.html?partner=yahootix
welcome to Irish economics blogging world-
Good tips there for beginners. ;-)
You are probably right, anonymous. Apparently the international investor is done with Ireland for the time being. However don't forget the old adage that when everyone else is abandoning a stock, sometimes that is the best time to buy it at it's cheapest.
At the moment the best bet in stocks seems to Oil and mining Exchange Traded Funds (ETFs). Also inverse ETFs are doing well also, but as these are engaging in short selling on the basis of further market falls you must have a sell order built into them as soon as the market swings up again.
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