Investors urged to control portfolios

IRISH investors are being urged to take control of their investment portfolios to beat the current market turmoil.

Padraig O’Riordan, joint head of leading stockbroking firm Dolmen Butler Briscoe in Cork, says investors should research their own investments rather than hand over money to discretionary portfolio managers.

“In the past six months we have seen a lot of value destroyed by investors handing over their hard-earned money to discretionary portfolio managers.

Most of us will research the market before making a major household purchase such as a washing machine or a car, so why then do we expect to make money on stocks and shares if we do not know what we are spending our money on?” he said.

“The stock market is not a casino and while ‘having a flutter’ on the market was a common phrase during the late 1990s, the more recent bear market and the dotcom fall-out has once again focused analysts and investors on the importance of fundamental research before deciding to invest.

Mr O’Riordan added: “It is no longer acceptable for investors to take a hands-free approach to their investment portfolio. They need to take ownership of their portfolios or at least have a basic understanding of the market so they can take an active role with their adviser in managing their stocks.”

Commenting on the weakness in equity markets, most of which are at five- and six-year lows, Mr O’Riordan says that while there were prospects for a recovery in the market, uncertainty with regard to the Middle East and continued weak global demand were likely to ensure that markets remained volatile in the immediate future.

“Taking time to learn fundamental analysis techniques such as how to assess Net Asset Value (NAV), dividend yield and Price/Earnings Ratio will yield longer term rewards for investors.

“These, and other fundamentals such as the track record of the management team, past financial performance, etc, will ensure that investments are based on sound principles rather than emotion, which characterised the dotcom boom,” said Mr O'Riordan who was speaking at the Institute of Certified Public Accountants seminar in Galway at the weekend.