Depositing cash in a savings account often appears to be the safest option for your money. However, over time, where interest earned on cash is less than inflation, the purchasing power of your money can gradually start to erode. The graph below compares the performance of €100 invested in both global equities and in cash between 2000 and 2024, taking inflation into account.
What is discretionary investment management?
Investment is the purchase of an asset with the expectation that it will provide income in the future and/or will be sold at a higher price for a profit.
Discretionary investment management simply means that day-to-day investment decisions are made on your behalf, within agreed guidelines, by an investment professional.
They continuously investment portfolios and make adjustments in response to the market, economic changes, with all decisions underpinned by expert research, whilst ensuring it remains aligned to the model that was carefully selected for you according to your risk profile
At Quilter Cheviot, clients with a minimum of €250,000 of investable assets are eligible for our Discretionary Portfolio Service (DPS), or €20,000 for the Quilter Cheviot International Funds.
1. Investing for the long term
It’s important to think about managing your investments for the long-term, rather than any short-term movements, because history shows us that in the long run returns have heavily outweighed any short-term declines. This means any switch to hold more short-term, conservative investments like cash or other assets means your money may not grow at a faster rate than inflation (we call this ‘inflationary risk’). Our Investment Managers are focused on the long-term direction of the market and what that means for your investments.
2. Why having an investment expert as your guide is important.
As a firm, we believe that investment expertise really shows its worth when markets are in decline. With an investment expert as your guide, you gain access to:
- Active management - They will steer you through market volatility and explain the risks that affect your portfolio. This means that they can help you take advantage of the opportunities available as some asset prices become cheaper.
- Support in meeting your goals - They will suggest the right solutions to better match your financial goals. This means you can take full account of the current market environment in pursuing your long-term investment objectives. The value of investments can fall as well as rise.
Time is of the essence...
Did you know that someone who starts saving regularly at the age of 21 and stops at 30, leaving the money invested, could see their money grow more than a saver who starts at 30 and puts money aside for the next 40 years, retiring at 70?
This surprising fact is explained by the power of compound interest. The principle behind compounding is that each year, you earn interest on the original amount invested; as well as on the interest earned in previous years.
What difference do a few years make?
Imagine you have €10,000 to invest, you would like to retire at 65 and investment returns are fixed at 5%. The table below shows the difference investing early could make to this amount of money, when it is invested at different stages.
Investing in the stock market can be one of the most effective strategies to tackle inflation. Many companies are able to pass on some, or all, of rising Input costs onto customers and end users, meaning that in many cases the full impact of inflation Is not felt in corporate balance sheets.
Source: https://www.cso.ie/en/releasesandpublications/ep/p-cpi/consumerpriceindex
Your Guide to Investing
If you want to learn more about investing, please read our full guide.
