Pension


A cash investment in your pension remains one of the best investments, as all contributions are tax deductible at the marginal rate. If you are on the higher rate of tax and full PRSI, a €50,000 additional voluntary contribution or AVC is actually costing you around €25,000. So your pension fund would have to lose half its value before you would experience a loss while you have recorded a 100% gain from day one.


Banks


There are two approaches here – buying shares in the bank or depositing cash in any one of the deposit accounts on offer. On buying shares, while they can hardly dip any lower, the problem is you cannot be sure the bank itself will survive. Most are waiting for the nationalisation/ capitalisation dust to settle.


Deposits are a much surer bet and with the state guaranteeing deposits of up to €100,000, your cash will be underwritten by the taxpayer. While interest rates have halved in 12 months to a little over 2.2% today, many of the banks are offering up to 3.75% interest on deposits up to €10,000 to drum up business. Worth a punt.


Death and Taxes


Nothing is certain but death and taxes, former US president Benjamin Franklin was reported to have said, and you can cleverly merge the two by investing tax free in nursing homes. An individual can claim capital allowances on the total amount invested in the construction costs of an approved nursing home. Allowance can be claimed at the rate of 15% per year for six years and 10% in year seven, capped at €31,750 per year. Also, the investment must be for at least 15 years to qualify for the relief.


Water


It is predicted that this century's global conflicts will be fought not over oil but water. Dubbed 'blue gold' by investors, KBC asset management predicts that $1 trillion worth of investment in water will be needed over the next 15 years.


With the majority of the globe experiencing serious shortages, KBC offers a range of water investments ranging from the numerous privatised water companies in the UK, companies that build water-treatment plants and long-distance pipes and even the many companies that sell water to arid states.


Property


While over-reliance on an inflated property is at the root of out current problems, there are some knock-down bargains to be had at the moment. Just last month Gannon Homes was offering large four-bed houses in much-sought-after Malahide for €750,000 when a little over a year ago the same style houses in the same development were on sale for €1.3m – a 42% price drop in 15 months.


But the belief among agents is that house prices have some way to fall yet before they start to pick up again. The trick here then is to take the plunge just as the graph reaches the nadir.


Currency


Sterling has plummeted in value against the euro. A little over 18 months ago in June 2007, €1 was worth £0.67p. Today it's worth almost 90p – a drop of over one-third. While there is little sign at the moment of a recovery in sterling, it has to go back up at some stage. If you bought sterling now and it returned to its June 2007 rate, your €50,000 would grow to around €66,500. But it's a gamble.


Biscuit Tin under the Bed


It may have stretched credulity when former taoiseach Bertie Ahern implied that he kept £50,000 under his bed. But while this would have been a very foolish investment vehicle at the time, particularly for a minister for finance as he was then, today it may not be that ludicrous.


With deflation expected to reach -4% this year, cash will appreciate in value by the same amount, buying you 4% more goods. On the negative side, the cost of increasing your insurance premiums against break-ins will rise.


Oil


"I'm in oil, actually" was the favoured riposte at dinner parties in the 1980s. But many eventually lost heavily on Atlantic Resources and the same holds true today. Potential gains and losses are huge, as is evidenced by the wildly fluctuating prices which dropped from $147 a barrel just last July to about $40 a barrel today.


Gambling on 'sure things'


Before this weekend's matches in the English premier league, Manchester United were 1/6 to win the league. On a €50,000 punt that would pay about €57,500 in May. Barring a self-imposed implosion by Messrs Rooney and
Ronaldo this will give you a reasonable gain in four months.