Bank of Ireland Update

Just a quick word about our tip last week.

For those who took our advice congratulations, 22% return in just over two weeks, up to EUR 10.95 today. I still believe it's good value under EUR 10.50 just be careful of overpaying on commissions. This is the first time I have bought shares and paid EUR 72 commission on the trade which is very high. For BOI customers, the easiest method would be through your own branch.

I have looked into purchasing shares online through Irish stockbrokers and the best value appears to be sharewatch.

Another very good article about transaction costs of trading is in the Irish Independent.

Sharewatch also provides a price comparison with other Irish stockbrokers including Davys, Goodbodys and Dolmen.

Goodbody online provide some very useful daily financial advice free in their morning meeting wrapup section.

My Investment Tip

After a little dose of doom and gloom, we decided we'd better brighten up the dark days of November with a little investment tip. So far my favourite investment has been property in Abu Dhabi, see post 3rd October. This is working out really well for us; as the dollar continues to fall our investment becomes cheaper and cheaper. Hopefully, by the time it comes to selling in 2009/10, a strengthening dollar will further add to our return.

Our most recent punt is on the stock markets and more specifically the Irish index of shares. We have recently bought 400 shares in The Bank of Ireland @ €9.01. We feel this represents great value. Bank of Ireland (BOI) shares have fallen dramatically in value since highs of €18.83. A 50% decline in share value hardly represents a strongly performing company, but bear with me.

The steady decline in share price has been largely caused by the subprime market volatility and its knock on funding implications for banks. This funding issue is not as significant for Irish banks as they have largely avoided the subprime issue, and also do not require the same level of funding from international capital markets as many of its US and UK competitors. BOI is essentially a profitable bank with profits of over EUR 1 billion forecast for six months to September 2007. Profits for the second half of the year have been revised downward but are still considerable. Concerns over the Irish housing market slowdown have added to the fall in share price.

We purchased a modest holding of 400 shares at EUR 9 yesterday. Coincidentally UBS Fund Services acquired a 3% shareholding in the Bank and many stock brokers have moved from a neutral position to a buy position on the share.

Our main motivation is the tantalizing prospect of making some money off the back of the banks whose increased charges and fees continue to irritate us on a daily basis!

We plan to hold the shares until about March, April 2008 after the BOI year end. I must stress that this is pure speculation and is a high risk strategy, not advisable unless you can afford to lose your investment. We would strongly advise against borrowing to fund such a short term investment. Most advisers would argue that it is not possible to make considerable gains over such a short period of time, we will keep you posted.

Will You or Won't You?

Where there's a will there's a way

Moving on from James' obsession with murder to the more cheery topic of wills...... As seen in November's Tip of The Month, there are many valid reasons why you should set up a will. While this may seem a little depressing and instill the fear of excessive solicitor fees, I imagine these things are far easier to communicate to a solicitor in our lifetime than to a psychic after death.

I can understand the temptation to ignore the matter but it seems crazy not to take the time to write down how you would like your worldly goods, that you've worked so hard to obtain, to be distributed.

Having said that, while there are formal requirements when it comes to writing a will, if your circumstances are straightforward, there is no actual need to use a solicitor. However, as the rules are quite specific and it is so crucial that the document has the effect you intend, it might be a good idea.

Choosing a Solicitor

We would recommend that you contact a few local solicitors to compare prices, bearing in mind that the cost will reflect the complexity of your circumstances. Realistically tho, you'll be looking at around £50 to £300 (EUR75 to EUR450).

It might also be worth checking your insurance policies/trade union rights as you may be entitled to free legal advice in relation to writing your will.

If you are determined to avoid the use of a professional, there are some great online software based options. Two great options are online legal website 'Lawpack' that offers both online will writing and software downloads from £14.49, and 'Desktop Lawyer' who provide a variety of wills and other documents.

Prior to meeting with your solicitor, consider the following points and list the key facts relating to your circumstances to reduce the time required on your will & therefore the amount they can charge!

Content

Things you will need to consider when drawing up your will include the following:

1. How much money and what property and possessions do you own? For example, property, savings, occupational and personal pensions, insurance policies, bank and building society accounts, shares.


2. Who you want to benefit from your will? You should make a list of all the people to whom you wish to leave money or possessions. These people are known as beneficiaries. You also needs to consider whether you wish to leave any money to charity.


3. Who should look after any children under 18?


4. Who is going to sort out the estate and carry out your wishes as set out in the will? These people are known as the executors.

NB. An executor takes on a huge amount of work and responsibility in the form of dealing with all the paperwork and paying all outstanding debts, taxes, funeral and admin costs out of the assets you leave behind. They will also have to execute any financial transfers/gifts that you stipulate in your will. Therefore, it might be courteous to ask the person you have in mind or else appoint a professional!

Requirements for a valid will

To ensure a will is a valid legal document, it must be:-

• In writing
• Written by some who is 18 or over
• Made voluntarily and without pressure from any other person
• Made by a person who is of sound mind. This means the person must be fully aware of the nature of the document being written or signed and aware of the property and the identity of the people who may inherit
• Signed by the person making the will in the presence of two witnesses
• Signed by the two witnesses, in the presence of the person making the will, after it has been signed. A witness or the married partner of a witness cannot benefit from a will. If a witness is a beneficiary (or the married partner or civil partner of a beneficiary), the will is still valid but the beneficiary will not be able to inherit under the will.

NB. Although it will be legally valid even if it is not dated, it is advisable to ensure that the will also includes the date on which it is signed.

Storing your will

Once a will has been made, it should be kept in a safe place and other documents should not be attached to it.

There are a number of places where you can keep a will:-

• At home
• With a solicitor
• At a bank
• At the Principal Registry of the Family Division of the High Court, a District Registry or Probate Sub-Registry for safe keeping.

If you wish to deposit a will in this way you should visit the District Registry or Probate Sub-Registry or write to The Probate Department.

Changing a will

If your circumstances change after writing your will (ie marriage/divorce/children), you will need to amend the original document. To do this, you must either make a 'codicil' (supplementary document detailing alterations for simple changes) to the original will or write a new will. If a new will is created it will supercede all previous versions.

We highly recommend that you take action and resolve your will asap. A bit of effort now will save an enormous amount of conflict and stress down the line.

Just a quick update, there is an great new website available for our Irish readers www.wills.ie, very easy to use

October 2007

Set up a monthly direct debit from your current account to cover the balance on your credit card. This will allow you to monitor your spending and eliminate any nasty surprises. An awareness of your financial position is vital no matter how unappealing that may be!

Murder on the Dance Floor

Hello all. Sorry about the lack of posts recently, Beth & I have been really busy at work. Both of us work in the financial services industry and have been so busy as financial markets continue to experience severe turbulence.

A recent article in the Financial Times caught my eye. The article was about Charles Prince who was the former CEO of Citigroup, the world's largest financial services company with assets of more than USD 2.3 trillion and 332,000 staff around the world!!

Prince was quoted in July shortly before the collapse of the subprime market as saying;

"When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you've got to get up and dance. We're still dancing". Unfortunately for Prince and world financial markets, the DJ had played too many tunes and the club was well and truly closed."

However, this got me thinking about a nightclub as an analogy of our attitude to personal investment. Historically, nightclubs are very fickle businesses opening and closing with regularity, often under new management. The most important factors for success are not only providing what the clubber wants, but also maintaining that element of chic or cutting edge cool. Initially the "in" crowd will come to a new club, glamorising it. As word goes around, the club develops a reputation as THE place to be. It becomes more and more popular, with everyone wanting to get in. So much so that if "your name's not down you're not coming in". Management become increasingly aware of their 'cash cow' and prices go up, marketing increases, top DJs are brought in and it's champagne and VIP rooms all around.

This is the point where the original hip crowd realise that what made the club cool in the first place has all but disappeared. They look at the dance floor with ladies dancing around their handbags and guys checking them out in their Ralph Lauren suits and head for the door. Initially nobody notices. The DJ plays on. The barman passes the waitress another magnum of Cristal Champagne. Over the weekends however, the paparazzi stop showing up, the queues begin to thin and a dated feel begins to enter the club every Saturday night. After a few months, all but the last stragglers have moved on leaving them to pick up the tab.

Personal investment schemes can follow a similar pattern. From Spanish property, to buying to let, to investing in subprime mortgage products. We as private investors are usually the last to hear about the best new deal and are often the ones left footing the bill. This is not to discourage anyone from investing, but always be aware that even the top professionals in the world get it wrong .......... regularly. They are lucky enough not to be investing their own money, you are not.

And what of our friend Mr Prince? Well, investors called for his head following the subprime collapse and he was forced to resign. Beware, its murder on the dance floor.