Blog – David McCarthy, Galway Talks – 05/09/2013

galway-bayfmQuestion:  I have a life policy attached to my mortgage which is less than the amount that I owe.  I am worried about this and am wondering what your advice would be?

Answer: This is a common problem due to the fact that a number of people may have renegotiated the terms of the mortgage with their lender.  It can arise that Life Cover is now lower than the amount owing.  In addition it can also arise where somebody has a buy to let property and no cover at all attached to it.

A shortfall on your life cover where you have substantial borrowings can leave a serious legacy for your family.  If at all possible, I would recommend in these circumstances that you try to take out extra cover.

Issue:  400,000 Irish Shareholders to benefit from Vodafone windfall.

Answer:  400,000 Irish Shareholders are likely to benefit from a windfall from Vodafone as a result of the sale of their US Business to Verizon.  This is a massive deal, and Vodafone have announced that a substantial amount of the proceeds will be returned to Shareholders. 

The reason there are so many Irish shareholders in Vodafone, is due to the fact that they originally invested in Eircom, who in 2001 sold their Eircell mobile business to Vodafone.  When taking account of a potential windfall payment along with the increase in the share price, it is estimated that these valuations will bring most people back to the value of the price they paid for Eircom.

Question:  I invested a lump sum in 2006 of €20,000 in New Ireland’s Trilogy Bond.  This has now lost half its value and I’m wondering what I should do?

Answer:  It is unfortunate to find yourself in such a situation and difficult to advise somebody to leave the fund they are invested in with such a heavy loss.  However, it is more prudent to look at the alternative to the fund you are invested in and in this case I would recommend that you look at other options.