Types of investment
What are the main investment options?
There are many ways to invest your money. Different products offer different levels of risk, potential return and access to your money. Depending on the product, there may be restrictions, notice periods or penalties if you want to access your money before the intended investment term.
These are some of the most common investment options available. The table below explains how they work, the level of risk they typically involve, and how long it is generally recommended to stay invested to give your investment the best chance of meeting your goals.
| If your goal is to... | You may consider | What you should be comfortable with |
|---|---|---|
Grow your money over the long term while spreading risk (diversification) | Investment funds, including ETFs (Exchange-Traded Funds) |
|
Invest in specific companies you believe will grow. | Shares |
|
Seek more predictable returns | Bonds |
|
Benefit from the property market | Property investments |
|
Many first-time investors start with funds, ETFs, shares, bonds or property. More complex or speculative investments will involve higher risk of loss and may not be suitable for beginner investors.
What is diversification and why is it important?
Diversification is often described as "not putting all your eggs in one basket". By spreading your money across different products, companies, sectors and types of investments, you reduce the impact any one investment can have on your overall portfolio.
Investment funds and Exchange Traded Funds (ETFs) are often used by first-time investors because they can provide diversification through a single investment, giving you exposure to a wide range of companies, sectors or markets. While diversification can help reduce risk, it does not eliminate risk entirely. The value of your investments can still rise and fall, and you could get back less than you invest.
Where can you invest your money in Ireland?
There are several ways to invest, including through a financial adviser, a bank, a stockbroker or an online investment platform. The service you choose affects the advice you receive, the investments available and the fees you pay.
| Provider or service | What they can help with | What you should know |
|---|---|---|
| Banks and life insurance companies | Offer investment products and, in some cases, advice | The level of advice and choice of products can vary between providers |
| Stockbrokers and investment brokers | Buy and sell on your behalf or on your instructions | Some provide investment advice, while others only carry out transactions |
| Financial advisers | Recommend investments based on your circumstances and goals | hey provide personalised advice. Fees and charges vary depending on the adviser and service provided |
| Online investment platforms | Let you choose, buy and manage investments online | You will usually make your own investment decisions and may not receive personalised advice |
Thinking about the Irish Government's new Investment account scheme?
The proposed Investment Account is designed to make investing simpler. While the final details have not yet been announced, the account is expected to offer tax advantages and simplified administration for eligible investments. But it is still important to ensure investing is appropriate for your circumstances, goals and risk tolerance.
However, it is important to remember that this is an investment product rather than a savings product. The value of investments can rise or fall, and you could get back less than you invest. Learn more about the proposed Investment Account.
Learn more about the Investment Account.
What should you check before choosing an investment provider or platform?
Before choosing a provider or investment platform, check:
- Regulation: Is the firm regulated by the Central Bank of Ireland?
- Advice and support: Some providers offer financial advice, while others only execute your investment instructions. Consider how much support you want when making investment decisions.
- Investment options: Does it offer the investments you want?
- Costs: What fees, charges and taxes apply?
- Access: How and when can you withdraw or sell your investment?
- Support: What information or help is available?
What protection do you have when investing?
The protections available depend on the investment and provider you choose. However, compensation schemes do not cover normal investment losses.
Compensation schemes do not cover a fall in the value of an investment.
Protection may apply if a regulated provider fails and cannot return money or investments it holds for you. • Some deposit-based products may receive separate protection. Unregulated products and services may offer little or no protection.
Find out more about investment protections
Learn how the Investment Compensation Scheme (ICS) works.
Learn how the Deposit Guarantee Scheme (DGS) works.
Alternative investments or highly speculative products
Approach these products with caution. They can be difficult to understand and are generally unsuitable for many first-time investors. They include:
- Crypto: Digital investments whose value can rise or fall sharply over short periods. You could lose some or all of your money. Learn more about crypto.
- Structured products: Complex investments where returns depend on specific conditions being met. They can be difficult to understand and may not perform as expected.
- Contracts for Difference (CFDs): Let you speculate on whether the price of an investment will rise or fall without owning it. Losses can build up quickly.
- Binary options: Involve predicting whether a price or event will move in a certain way within a set period. They are banned for retail investors in Ireland.
These are highly speculative products that carry a significant risk of loss. They are generally only suitable for people who understand the risks and have the financial capacity to lose a substantial portion, or all, of the money invested.
