The superior returns being delivered by equity-based SSIAs have made people take notice of the potential of dabbling in the stock market, writes Caroline Madden.

Irish investors may have a particularly strong affinity for bricks and mortar but, as the property gravy train grinds to a halt, the search is on for the next big thing. This inevitably raises the million-dollar question - is this a good time to invest in the stock market?

As a nation, Ireland lags behind other countries in terms of stock market investment by individuals. In the US, for example, it is estimated that 40 per cent of the adult population invests directly in the stock market, compared to roughly 15 per cent in Ireland.

The disparity is not surprising given that, in addition to the natural bias of the Irish psyche towards property, the first generation of wealth has only emerged here in recent years. For many, the first taste of stock market investment was Eircom, an experience that in itself did little to encourage equity investment.

It is expected, however, that small Irish investors will follow the lead of their US counterparts, gradually shifting more towards equity investment. Indeed, the superior returns being delivered by equity-based SSIAs have made people take notice of the potential of dabbling in the stock market. But with markets displaying turbulence of late, is this a suitable time for the inexperienced investor to take the plunge?

Brendan Burgess, founder of askaboutmoney.com, says it is virtually impossible to time the stock market. He feels that now is as good a time as any to invest in equities. "There are a few occasions you're probably better off not investing in the stock market," he says, referring to periods when there is a "roaring bubble", "but by and large you get good long-term returns from stock market investing."

David McCarthy, managing director of McCarthy & Associates Financial Consultants, feels that the recent stock market "blip" has been overhyped.

"It was a correction but not a long-term one," he says. "You will always have these adjustments in prices and markets and, unless something happens internationally, the outlook seems to be good for markets generally."

By default, many people leave their cash languishing on deposit, earning, if they're lucky, 3 or 4 per cent per annum. While this is less risky than the stock market in the short term, over time inflation erodes the value of such savings.

Rory Gillen, co-founder of Merrion Capital, says it always makes sense to invest in real assets such as property or shares, as opposed to cash. He points out that equity investments outperform over the longer term, but it is always difficult to tell whether the time is right to enter the market. Gillen says stock markets are currently in fairly neutral territory.

"Are stock markets wildly overvalued? And the answer is no. Are they as cheap as chips? Again, the answer is no. They're somewhere in between," he says. "Stock markets remain reasonably valued against interest rates, so I don't see anything wrong with people investing at the moment."

Gillen concedes that there are a number of risks with international markets at the moment. "The risk of the housing market turning down even further, the whole risk that's been identified in the sub-prime mortgage market, and there's a risk of recession in corporate earnings," he says, adding that equities always carry a degree of risk. The key, he says, is to have a plan for dealing with the volatility.

Jim Power, chief economist at Friends First, expects markets in general to emerge from this rocky period, he thinks returns will be lower. However, he predicts potential returns of 8 to 10 per cent per annum - still well ahead of your average deposit account.