MONEY that’s been kept on deposit is losing value fast, according to financial advisor Darach Honan.
There is a high volume of cash on deposit in Ireland currently, however consumers are currently at risk due to historically high inflation levels. Darach Honan, of Honan Financial Services explains that keeping your assets in cash is essentially a stagnant strategy which will see your asset dwindle.
“The environment at the moment isn’t a good one to keep money on deposit at the bank because interest rates are extremely low – and have been for the last 10 years – plus now you have a 40-year high in terms of inflation, with inflation hitting 9.1% in July for the year. So money that’s been kept in cash on deposit is losing value and fast so people would need to look at options in terms of how to protect that cash and that asset.
Honan advises that an effective strategy to safeguard your savings is lump sum investment or regular saving investment, where you could start contributing on a monthly basis to an investment policy.
“You have to pick a strategy for the long term and stick with it,” he explains, noting the currently volatile markets. “If you have money that’s going to be sitting on deposit for longer than 5 years, then you’re far better off to invest that than leave it in cash. The key here is that you diversify your investment into a fund that would give you exposure to a number of different asset classes in a number of different countries that spreads your risk out and will perform well for you over the long-term – the key here that you keep it invested for the long-term.”
To contact Honan Financial Services for advice, call 087 127 7155 or email darach@honanfs.com.
