Dublin’s investment in mutual funds

Risk and reward, these two words are correlated heavily with the trading of stocks and bonds. Individual stocks and bonds tend to have higher personal risk, but also higher possibility for rewards. Mutual funds are another type of lower risk investment where you and other people have the opportunity to invest money or capital in a collective fund. This group of people’s money is then invested by a fund manager in a diversified array of stocks, bonds, futures, currencies, treasuries and money market securities that they believe will do well. 

By investing with other people, you are reducing the amount of risk that will be on your own assets. Although this is positive, the payouts tend to be smaller because they are distributed across all of the investors. 

There are many benefits to investing in this product. For one, this type of fund offers built-in diversification of investment portfolio; you are not putting all of your eggs in one basket, which can offset possible downfalls in one category with growth in another. Another being that these funds are chosen by …

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AIB returns to stock market

Finance minister Michael Noonan officially announced Tuesday night government plans to sell a 25% stake in AIB, returning part of the bank into private hands. This marks AIB’s dramatic return to the London Stock exchange since it was nationalized almost 7 years ago during the last financial crisis.

Currently 99.9% government owned, the sale of AIB shares will likely be the largest stock market listing of 2017. Analysts estimate that the sale of shares will raise more than €3 billion for the government, contributing to AIB’s slow and steady return of the €20.8 billion of bailout loans it received from 2009 to 2011.

AIB is Ireland’s biggest lender, and since it’s nationalization, has worked hard to renew its image, slashing the amount of bad loans from 29 billion to 8.6 billion. With that and already €6.8 billion of taxpayers’ money returned, AIB CEO Mr. Bernard Byrne hopes the upcoming sale of shares will continue the bank’s process of recovery and reaffirms investor confidence.

Although …

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RTE Drivetime: ‘Talking Money’ on Quantitative Easing, 30th March 2015

Quantitative Easing or ‘QE’ for short, is a process where Central Banks buy assets from commercial banks and it is known to bring down bond yields and drive up other asset values.

This has begun in Europe and on Talking Money we looked at some of the effects it may have and the issues that such a highbrow economic issue raises for regular people.

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RTE Talking Money with Jill Kerby & Karl Deeter on Stockbrokers

This week we were discussing stockbrokers on Talking Money which runs every Monday on RTE’s Drivetime show at about 18:15.

We looked at the advice, the costs and some of the other things people need to consider when they are looking to invest.

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Priming the property pump

The issue with Irish property (in particular Dublin where demand is evident) is that the pump has been primed in many different ways, first we’ll look at ‘how’ and then we’ll look at the aftermath using a worked example.

First of all, here are some of the things that are driving the market…

1. Build up of buyers, be they first time buyers or REIT’s who are able to take up any available supply.2. ECB rates are low, yield searching is an issue, deposit rates are low as is the risk free rate by comparison.3. Tax policy is an issue, from 2014 the marginal rate applies meaning that in a few short years the tax has gone up by 105% on savings from 20% to 41%.4. Finally, there is the Capital Gains Tax waiver if you buy a property and hold it for 7 years.

So here’s a worked example of the massive give away this represents and why it is mobilising so much money into property. We’ll take an identical €200,000 make a comparison over 7yrs from 2014 and …

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Slow growth economy stock returns

There is a growing body of work suggesting that many developed countries will cease to roar ahead at 3%+ growth rates in the future, that instead we are likely to see a growth rate of about 2% p.a. leading to a ‘steady state’ economy.

If you look at the USA the inflation rate was only 1.9% over the decade from 2000-2010. If you strip out the 2008 recession effect it still only comes out at 2.6%. This could mean that Bernanke’s approach of effectively putting a floor on stock prices could lead to a revision irrespective of intentions.

Take a look at the picture below.

This could mean that in the future the standard P/E expectations could drop and a corresponding dividend yield increase become the natural premium or expectation of stock market investment, strangely; this will be getting back to the original reason people invested in stocks prior to the 20yr secular bull of the 80’s-late 90’s.

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Options Trading Ireland, Susan Hayes talks to Karl Deeter about Options

Susan Hayes – Options Trading Ireland, talking to Karl Deeter of Irish Mortgage Brokers from Irish Mortgage Brokers on Vimeo.

We were delighted to have Susan Hayes of Options Trading Ireland (and The Positive Economist) come by for a chat about options trading, what it is and how it works, in the video Susan uses her trademark ‘no nonsense’ approach to explain options in clear and concise English so that even the likes of Karl can understand it. Well worth watching, if you want to contact Susan you can reach her at either of her websites which are in the links above.

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