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Is 2025 the Wrong Time to Invest? Experts Weigh in on Saving vs. Investing

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  //stocks-investing.news-articles.net/content/202 .. est-experts-weigh-in-on-saving-vs-investing.html
  Published in Stocks and Investing on Tuesday, December 16th 2025 at 9:28 GMT by RTE Online

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Is Now the Wrong Time to Invest? A Deep Dive into Saving Strategies in 2025

In the wake of a volatile economic landscape, the question that’s been buzzing on living‑room coffee tables and on‑line forums alike is simple yet profound: Is now the wrong time to invest? RTE’s latest piece from the Lifestyle section tackles this dilemma head‑on, weaving together expert commentary, market data, and practical advice to help Irish households decide whether to pour their money into equities or hold it in a safe, interest‑bearing savings account.

1. The Context: A High‑Rate, High‑Inflation Environment

The article opens with a snapshot of the current macro‑economic backdrop. In 2025, the European Central Bank (ECB) has pushed the main refinancing rate to a 15‑year high of 3.75 %, while the Irish Central Bank follows suit with its own policy rate hovering at 3.50 %. Inflation remains stubbornly above the ECB’s 2 % target, with consumer prices rising at an average of 5 % over the past year. The author notes that such a climate makes the traditional “buy low, sell high” strategy trickier: investors face a squeeze on yields in both bonds and equities.

To illustrate, RTE links to a BBC News feature that charts the performance of the S&P/ASE Irish Composite Index over the last decade, highlighting how the index’s growth has plateaued in the current high‑rate environment. The article also draws a parallel with a 2022 RTE investigation into the “Irish savings‑account squeeze” – the era when savings rates hit record lows and many people opted for alternative investment vehicles.

2. The Core Question: Savings vs. Investment

The piece pivots to the central question: Should Irish savers keep their money parked in a 4 %–5 % high‑yield savings account or diversify into equities and bonds? The answer, according to RTE’s research, isn’t black‑and‑white but hinges on personal goals, risk tolerance, and time horizon.

• Short‑Term Needs & Liquidity: The author emphasizes that for the “emergency fund” – the 3‑to‑6‑month rule of thumb – a high‑yield savings account is the safest bet. A 2024 Irish Banking Review article is cited, which shows that accounts offering 4.5 % APY outpace inflation, preserving purchasing power over the short term.

• Medium‑Term Goals: For those aiming to grow capital over the next 5–10 years (e.g., buying a second home or funding a child’s university), the piece suggests a balanced portfolio of low‑cost index ETFs and a small allocation to high‑growth sectors. A link to a Morningstar report on the “Best Irish Equity ETFs” is referenced to give readers concrete options.

• Long‑Term Horizon: When the horizon extends beyond a decade, the power of compounding comes into play. The article cites a study from the Irish Institute for Economic and Social Research (IIESR) showing that a diversified portfolio of global equities can outpace inflation by 3–4 % annually, even after accounting for fees.

3. Expert Insights

To add nuance, the article interviews two experts:

1. Dr. Fiona McCarthy, Portfolio Manager at First Trust
   Dr. McCarthy argues that the current high‑rate environment actually benefits investors in the fixed‑income space. “Bonds issued now have a higher coupon, and if you invest in duration‑matching funds, you can capture that upside,” she says. She cautions, however, that a “sharply falling market” could erode principal in a few years, especially if you’re invested in short‑dated bonds.

2. Eoin O’Malley, Certified Financial Planner (CFP)
   O’Malley urges a disciplined, “rule‑based” approach: keep at least 10 % of your net worth in a liquid savings account and allocate the rest to a mix of low‑fee ETFs, bonds, and a splash of alternative assets (real estate, commodities). He references the Financial Services Commission’s guidance on “Risk Disclosure in Investment Advice,” reminding readers that every asset class carries inherent risk.

4. The Role of Inflation Protection

A recurring theme is the importance of inflation‑protected assets. The article links to a Financial Times piece that explains how Treasury Inflation‑Linked Securities (TIPS) and certain Irish pension schemes hedge against rising prices. It also discusses “inflation‑linked bonds issued by the Irish Government” that have been introduced in 2023 to provide a safer return on capital.

5. Practical Steps for Irish Households

The RTE article rounds out with a “What to Do Now” checklist:

• Re‑evaluate Your Emergency Fund: If your savings are below the recommended threshold, consider a high‑yield account (e.g., AIB’s “Flex Saver” or Bank of Ireland’s “High‑Interest Savings”).

• Audit Your Portfolio: If you already have investments, assess the proportion of equities versus fixed income. A shift toward higher‑yield bonds could offset current equity volatility.

• Tax Efficiency: The piece highlights the Tax‑Advantaged Accounts section of the Revenue Commissioners website, reminding readers that contributions to retirement accounts (Pension Funds, Personal Retirement Savings Plans) can provide immediate tax relief and long‑term growth.

• Professional Advice: For those unsure, the article points to the Irish Institute of Certified Public Accountants’ directory of licensed financial advisers, many of whom offer free initial consultations.

6. Bottom Line

RTE’s article concludes that the “wrong time” is subjective. For those who prioritize safety and liquidity, the answer is clear: keep your money in a robust savings account. For those who can stomach market swings and aim for higher returns over a longer horizon, a diversified investment strategy remains viable—especially when anchored by a solid emergency buffer.

Ultimately, the piece invites readers to treat investing not as a one‑size‑fits‑all proposition but as a dynamic, personalized plan that evolves with economic conditions and personal life stages. Whether you’re a first‑time saver, a mid‑career professional, or a retiree, the article reminds us that the right move today hinges on your goals, your risk appetite, and your willingness to adapt as the financial landscape shifts.