Eggs & Baskets - Hot Topics Q & A

Q. I have had various investments in the Irish stock market for many years now.

Last month the latest valuation arrived and I was very shocked to see that my investments are less than half of what they were worth a year ago. I can’t remember why I had so much in this market. Since my adviser retired, I have to admit to not paying full attention, and have let things slide.

As I have quite a bit of money invested here, should I sell? 

Why have my investments fallen in value more than other markets? 

A. Reuters recently reported Ireland's stock exchange to be the world's second worst performing market over the past twelve months, trumped only by Vietnam! Overall its 60% from its peak!

Why Ireland has been affected more than the UK market is interesting:

• Low eurozone interest rates added fuel to the fire during the property boom, sending house prices higher than they would otherwise have been, and combined with the 100% (or more) mortgages that were typical of the period, this left banks and borrowers very exposed when property prices fell
• Secondly, banks and other financial institutions have a very high weighting on this particular market - 46% at its peak compared to about 27% in UK. So the worldwide re-rating of banking shares has had a disproportionate effect on the Irish market.     

So it is certainly not good news for you, and whether or not you should sell now is very difficult to advise on.

All we can say is find a fee based planner/wealth manager to devise your own strategy, and really find out how much risk you actually need to take (or DON'T NEED to take) and diversify where possible.