Your Guide to Long-Term Investment in Ireland

by | May 22, 2024 | Investment Advice, Back to Blog

Feeling the Urge to Sell? Stay Calm and Invest for the Long Haul

Ever feel like ripping your money out of the stock market when things get a bit hairy? Most investors have all been there. But here’s the good news, history shows that staying calm and invested for the long haul is the winning strategy. This blog will equip you with five key principles for conquering long-term investing in Ireland.

Guide to Long Term Investment Ireland Scrabble Tiles on Desk with Notebook, Pen, Clip & Financial Graph

Five Key Principles of Long-term Investment

1. Be the Investing Rock. Stay Disciplined Through Thick and Thin.

The Irish weather is known for its ups and downs, and the stock market’s no different. However according to the Central Bank of Ireland, investors who stay put tend to do better. Think about it: missing just the 10 best days in the US market between 2003 and 2022 could have shrunk your returns by a whopping 43%! So, channel your inner Irish stoicism and ride out the storms.

2. Volatility is Like Dublin Rain. Temporary and Part of the Journey.

Market wobbles are inevitable, but don’t let them be the reason you ditch your investment plan. The Irish Funds Industry Report 2023 by Irish Funds tells us that every major market dip has eventually been followed by a rise. Remember the COVID-19 crash in March 2020? The S&P 500 saw its third-best one-day gain ever shortly after! Even the infamous “Black Monday” of 1987 ended up as a positive year for stocks overall. So, take a deep breath and remember, this too shall pass.

3. Cash Under the Mattress? Not Your Friend Here!

While cash might seem like a safe haven, it loses its buying power over time thanks to inflation. Even though cash returns have edged up recently, they haven’t kept pace with inflation, which is expected to stay above 0% in the coming years. Investments, on the other hand, have the potential to outpace inflation, especially stocks which tend to bounce back strong after falls.

4. Embrace a Bit of Volatility for Long-Term Rewards

Short-term market movements are often driven by emotions and fleeting feelings, but long-term growth reflects the actual value of companies. A study by the Irish Institute of Actuaries [Irish Institute of Actuaries website] revealed that in any ten-year period, equities have a 94% chance of positive returns, while multi-asset funds have never lost money. The longer you invest, the more you benefit from holding “riskier” assets.

5. Diversification. Your Secret Investment Weapon

Don’t put all your eggs in one basket. Spreading your investments across different asset classes like stocks, bonds, property, and even alternative investments is called diversification. This helps smooth out your returns over the long haul. Think of it like a delicious Irish stew – a mix of ingredients creates a tastier, more balanced dish!

On Long-Term Investment Plans & Added Insights

Building a Secure Future Through Strategic Planning

When considering long-term investment plans, it’s essential to prioritise strategies that offer stability and growth potential over extended periods. Here’s a deeper dive into some key considerations:

Diversification is Key

Spread investments across various asset classes like stocks, bonds, real estate, and alternative investments to mitigate risk and capture opportunities across different market conditions (as mentioned in principle #5).

Tax-Efficient Vehicles

Utilise options like Personal Retirement Savings Accounts (PRSAs) and Approved Retirement Funds (ARFs) to maximise returns and minimise tax liabilities.

Finding Your Best Long-Term Investment Sweet Spot

Matching Your Risk Tolerance and Goals

Choosing the perfect long-term investments is like finding your financial happy place. It depends on what you can handle risk-wise, your goals, and how long you have to invest.

Consider these factors

Risk Tolerance

Are you a risk-taker or more cautious?

Investment Goals

Early retirement, a comfortable nest egg, or something else?

Time Horizon

How long do you have to invest before needing the money?

Focus on Long Term Blue Texts on White Board To Do List

Remember: A financial advisor can help you craft a personalised investment strategy tailored to your unique circumstances.

European Long-Term Investment Funds (ELTIFs): A New Option

Expanding Your Investment Horizons

Good news for Irish investors with a long-term outlook! ELTIFs offer several advantages, including:

  • Access to a wider range of assets
  • Focus on Irish assets
  • Streamlined regulation

Speak with your financial advisor to see if an ELTIF might be a good fit for your portfolio.

Disclaimer: This blog is for informational purposes only and should not be considered financial advice. Please consult with a professional financial advisor before making any investment decisions.

Get Advice

Talk to us now and make an appointment with one of our Letterkenny team of QFAs. We are here to help with your Financial Planning Concerns. Ask us questions on Retirement & Pension, Life Insurance & Protection, Mortgages, and Investment Advice. Get in touch here or give us a call at 074 91 03938.

Financial Services firms in Ireland are regulated by the Central Bank.

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If you have any other questions on Long Term Investments in Ireland, please get in touch.

Long Term Investments in Donegal to Dublin & Across Ireland FAQ's

Why should I invest for the long term?

 Long-term investing helps weather market fluctuations and has the potential for greater returns than cash savings.

How do I deal with market volatility?

Market dips are normal, and history shows they are usually followed by recovery. Don’t panic-sell; stay invested for the long term.

Is cash a safe investment?

Cash loses buying power to inflation over time. Investments, especially stocks, can potentially outpace inflation.

What is diversification?

Diversification is spreading your investments across different asset classes (stocks, bonds, property) to reduce risk.

What are tax-efficient investment vehicles in Ireland?

PRSAs and ARFs can help maximise returns and minimise taxes.

What are European Long-Term Investment Funds (ELTIFs)?

ELTIFs offer access to a wider range of assets, focus on Irish options, and have streamlined regulations. Talk to your advisor about including them in your portfolio.

How do I find the right long-term investments?

Consider your risk tolerance, investment goals, and time horizon. A financial advisor can help personalise your strategy.

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