NIALL Rooney has worked in insurance and financial services for more than three decades. He joined CityLife Galway in 2013 as financial planning manager and is a chartered insurance practitioner and personal financial planner.

He is also well known in racing circles. His love of racing came from his late father, Raymond Rooney, a senior steward of the Turf Club and chairman of Galway Race Committee.

Ray was associated with two particularly memorable National Hunt horses, Golden Cygnet and Sky’s The Limit, trained by the late Edward O’Grady and Cheltenham Festival winners in 1978 and 2006 respectively. He also had Flat horses with Dermot Weld, including Arabic Treasure, who provided his first Flat success at his local Ballybrit track.

Niall has continued that connection. The Rooney family sponsors the Raymond J Rooney Leading NH & Flat Rider Awards at the Galway Summer Racing Festival, while Niall is a voluntary steward at racecourses in the west of Ireland.

Have a race plan

For Niall, financial planning is about achieving good outcomes for clients and ensuring they have the financial resources required through different stages of life.

Many people have financial goals, but no plan for reaching them. Niall compares financial planning to having a race plan before the white flag is raised.

The jockey, trainer and owner know the strategy, but if circumstances change during the race, it may need adjusting. Personal financial plans are similar: circumstances change and plans should be reviewed regularly.

A comprehensive plan considers protection and ensuring income is available when it is most needed, alongside pensions, retirement income, taxation and inheritance planning.

Retirement planning has also evolved considerably, making it increasingly important to consider existing pensions, workplace schemes, auto-enrolment and the tax treatment of retirement savings as part of the overall picture.

Playing the long game

Investment is another important consideration, but Niall believes people can become too focused on the short term and too impatient.

His approach is based on several principles: equities have historically offered strong long-term return potential, although returns are not guaranteed and significant volatility should be expected; diversification across sectors and geographical regions is important; regular disciplined investing can encourage a long-term approach; and attempting to time markets consistently is extremely difficult.

Compounding can also become particularly powerful over long periods.

In Niall’s experience, one of the greatest threats to successful long-term investing is the investor’s own behaviour.

People can be tempted to invest after markets have already risen strongly, then sell when markets fall.

Recent market shocks have demonstrated the danger. During the dramatic Covid-19 market fall in 2020, for example, investors who moved to cash after markets had fallen risked crystallising losses and missing the substantial recovery that followed.

Interestingly, Niall believes investors can learn something from experienced punters.

Five lessons from the betting ring

1. Do your homework

Wise punters don’t simply react to something they have read or heard. They study the form, gather information and make a considered decision about whether to bet.

Investors should apply similar discipline. Reacting emotionally to market headlines, particularly when markets are falling, can derail a long-term strategy.

2. Don’t follow the herd

Savvy punters don’t automatically back the horse of the moment and investors should be equally wary of the latest fashionable investment.

The property boom of the mid-2000s demonstrated what can happen when large numbers of people pile into an asset hoping to make quick money. The investment may change, but herd behaviour remains.

3. Spread your risk

Professional punters may back horses from numerous yards rather than maintaining allegiance to one trainer. Investors should similarly avoid concentrating everything in one company, sector or market.

The financial crisis of 2008/09 provided a powerful lesson in the importance of holding a diversified portfolio of assets that do not necessarily move in exactly the same direction.

4. Don’t chase your losses

Successful punters are playing a long game. They don’t try to recover a loss immediately with an increasingly risky bet.

Investing also rewards patience and discipline. Warren Buffett famously described the stock market as a mechanism for transferring money from the impatient to the patient.

5. Ignore the noise

A good punter doesn’t abandon carefully considered judgement on race day because someone announces that another horse is a “sure thing”.

Investors face the same temptation. Market volatility, geopolitical events, changing interest rates and economic headlines continually provide reasons to abandon a carefully constructed plan.

The important distinction is between genuinely changed circumstances, which may warrant reviewing the plan, and short-term noise.

Know when to get help

Investors ultimately have a choice: become sufficiently informed to manage their own investments or seek professional assistance.

Managing investments independently requires knowledge, time and considerable self-discipline. For people who don’t have the time or inclination, Niall recommends considering a trusted, appropriately-qualified financial adviser.

Successful financial planning isn’t about predicting every market movement. It is about constructing a plan, remaining disciplined and reviewing it as personal circumstances, markets and legislation change.

Much like a good race plan, the tactics may occasionally need adjusting, but the long-term objective should remain firmly in sight.

Niall Rooney B.Comm.ACII.QFA.FLIA is a Financial Planning Manager with CityLife Galway. 087 2482639 / Email: niall@citylifegalway.ie