THE 60-SECOND GUIDE TO... INVESTING YOUR NEST EGG WISELY

If you are about to make an investment, get independent financial advice — particularly if you’re looking to invest a large lump sum of €100,000 or more. But don’t make the mistake of approaching your bank for investment advice — you won’t get independent financial advice there. Banks are typically tied agents, which means they can only sell the investment products of one company — so they won’t offer you the full choice of products out there. Tied agents still have to offer you a suitable product, but they cannot shop around on your behalf. Be sure you know the least and most amount of money that you can invest — and if you must tie up your money for a certain amount of time. “Ideally, choose an investment where you can access the funds if required — with no penalties or restrictions for doing so,” says Vincent Digby of Impartial. Understand and be comfortable with the risk you are taking on before putting your money into an investment. Know exactly how much money you could lose if things take a turn for the worse. “Unless you are willing to take a risk with between 10pc and 20pc of your money, stay on deposit,” says Hugh O’Farrell of Finance One. “If moving into investment, you must also be able to commit your money for at least five years as this should give you enough time to recover from stock market falls.” Check the track record of an investment fund before putting your money into it. A fund which has consistently delivered positive returns each year should be a better home for your money than one which has consistently lost money. But remember, past returns are no guarantee of future gains. Keep some of your nest egg on deposit so that you have some money to hand should you need it in case of emergency.