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Financial Market Trends - How to Invest Your Pension

“The one thing I will tell you is the worst investment you can have is cash… Cash is going to become worth less over time.”  Warren Buffett.

Though holding cash is a sure bet, your gains will be minimal given the extremely low cash deposit interest rates. A world of low deposit returns is challenging for investors. Many are looking for solutions that have the potential to generate higher returns without taking significantly higher levels of risk. The Harvest Cash Alternative Strategy looks to address this.

What is happening with Inflation and Deposit Interest Rates?

As deposit interest rates have plummeted across the world, the wisdom of holding long term cash deposits for retirement planning purposes has come into serious question. We have effectively reached a point now in the developed world where inflation is running ahead of deposit interest rates.

In simple terms what this means is that holding cash deposits has become a guaranteed way to lose money as the purchasing power of that cash ebbs away over time. As the inflation cycle picks up over the coming years, we see this gap between deposit interest rates and inflation continuing and if anything it is likely to widen further.

In addition, the average return achieved has a huge impact on the level of contributions required to achieve your desired fund size at retirement (see table below).

Cash Alternative Strategy

Assumptions: for simplicity inflation and rules regarding tax relief on contributions are not addressed.

Are there Low Risk Alternatives to Cash Deposits?

Despite the strong case for holding equities and property on a longer term view, many of our clients remain uncomfortable with having large exposures to these assets. At Harvest, we fully appreciate this way of thinking and realise that there is a substantial and genuine appetite for investments which, while not completely risk-free, will deliver steady returns over time without the kind of market shocks which happen every cycle with property and equity assets classes.

 Cash investors run the risk of missing their long term investment targets.

Why should you consider the Harvest Cash Alternative Strategy?

You should consider the Harvest Cash Alternative Strategy if you wish to receive better returns than are currently available for cash deposits while minimising the volatility in your portfolio.

The components of this strategy will be monitored by the Investment Department on an ongoing basis but it is not envisaged that there will be regular changes.

The Harvest Cash Alternative Strategy may be of particular interest to clients with pre and post retirement arrangements:

  • who want a positive return in excess of cash deposits in the medium term: and / or
  • who are looking for alternatives to holding cash in their portfolios.

It may also be of interest to clients who have stepped back from investing as they reach the Standard Fund Threshold.

How do I find out more about the Harvest Cash Alternative Strategy?

To find out more about the Harvest Cash Alternative Strategy and to determine if it is suitable and appropriate for your portfolio please speak to your Client Manager, call us on 01 237 5500 or email

 – Performance of the Harvest Cash Alternative Strategy

This marketing information has been provided for discussion purposes only. It is not advice, it is provided for general information purposes only and does not fully take into account your financial position, investment needs and objectives, attitude to risk, liquidity needs, capital security needs, capacity for loss, etc. It should therefore not be relied upon to make investment decisions. Prior to any formal investments taking place you will be provided with a detailed suitability letter taking into account all the above and outlining why the Harvest Cash Alternative Strategy and the selected fund(s) are (not) suitable for you.

Warnings: The projection and expected annual income figures are estimates only and not a reliable guide to the future performance of the three selected funds.
The figures refer to the past. Past performance is not a reliable indicator of future results. The value of investment(s) in the selected fund(s) may go down as well as up. If you invest in the selected fund(s) you may lose some or all of the money you invest. Past performance is not a reliable guide to future performance. Income may fluctuate in accordance with market conditions & taxation arrangements.

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