Investors decisions

The phones have been hot with clients wanting to speak to their advisers about their investment options in light of the depressing news coming out of the marketplace almost on a daily basis. It really has been a torrid last few months.

I believe the main options are either to sit tight and ride it out or run to cash based funds to protect the capital and at least guarantee some form of return. Or you can of course do a bit of each and hold some funds and switch others into cash. It really all depends on where you position yourself. If you believe markets will eventually correct themselves and you are willing to sit tight until they do then riding it out is a suitable option as long as the funds incorporate a decent level of diversity. The old adage of turning paper loss into physical loss.

If, on the other hand, you are fearful of where markets are heading and do not want to experience any further falls then you should perhaps switch into cash which can be accomodated without incurring buying and/or selling costs depending on which investment vehicle the funds are currently invested in.

There are risks attached to both strategies. If you ride it out and markets keep falling then it might prove extremely difficult to recover positions. On the other hand if you run to cash and markets respond favourably you might miss out on any resulting sharp inclines. It is all about which is the lesser evil at the moment I am afraid.

Then there are guarantee funds many of which are being publiced within the wider press. I sit on the fence here. Insuring your investments as you would insure your car or house is a great idea however as with any form of investment insurance comes at a price. You must therefore weigh up the price of the guarantee against the potential benefit. One commentator recently likened the chance of calling on the guarantee as akin to rolling seven straight sixes - not very likely.

On a final note I should also mention that some funds might not let you switch out at the present time such as Property funds but your adviser will keep you right on this one.

We are happy to discuss matters with clients and administer changes where necessary.