Losing thousands £££ Fast! Where to invest?

S

suzieemm

Guest
Hi all,

Does anyone know or can help a distraught investor where even my personal IFA seems unsure of what to do now I think?!!!

Back in 2007 I was advised to invest the 200K lump sum made from a property sale into a unit linked fund (can I say Axa) "Be Life Confident" (their heading) - I think not! I know we are in a recession but since 2007 I have never seen the investment rise in price and I am losing thousands and thousands each month and in one week the fund lost £2,200.19! What is the fund invested in - all types of Property - (say no more)! I have now lost over £70,000.00 in all - almost half of my investment!

We keep being told to hold fast, sit tight and the valuation will rise and it is only a 'paper' loss. As far as I can see the valuation says it now stands at £116,000.00 or so, and as I see it, I have 'lost' that money! They say I haven't 'lost' that money until I withdraw my investment but if we get another year of recession my money will be standing at zero and I have lost the lot! I am in my retirement and do not have many years to make up the downfall but if I move the money now I have definitely lost £70,000.00. After a long period of denial I contacted my IFA who now is telling me to invest in the stockmarket as it is low (having originally told me in November last year to "sit tight" and the fund will go up). As things have got progressively worse I think he now knows that we should have moved the money out when I was at a £30,000.00 loss only. If I now do that the money is gone, I do not have the time to wait to see the investment increase but hopefully need to jump in somewhere which will show some sort of increase - if only small, rather than losing my total investment.

Please could some kind sole advise some solution which might be preferential to losing these vast amounts of money each week and cut my losses - a whole £70,000.00 of them, or not do anything because of this immense loss if I withdraw. My IFA advises that he thinks property will move up slower than will the stockmarket.
The more advice from knowledgeable people I can get will be very appreciated!
 
Hi there, sorry to hear your troubles but just to point out that this is an Irish site, as it seems you might be from the UK
 
what difference does it make where the OP is from, its still a question about investments in general

OP - it seems like your financial advisor dosent have a clue what he is talking about. your investment will probably recoup its losses but will take years and years and years. it depends on your age etc. one thing for sure though i wouldnt take it out and invest it on the stock markets as he says. the stock market will be in for several more years of bad returns from poor fund managers who only go "long ".

if you decide to take out the money then put it in a high yielding deposit account and spend some time doing research etc on what to do next
 
Thanks so much Spursfan, that gives me food for thought. I am also wondering if my 'top' IFA (presumably) is really up to scratch - thanks again.
 
Neither your IFA nor anybody else knows what will go up and down in stocks or property. If you are risk adverse you should put your money in a high paying deposit account.

Until you give more details such as age, income and what you expect as a return on your lump sum it is nearly impossible to advise you.

Did you not realise when you 'invested' that it could go up as well as down. If you wanted a capital guaranteed investment you should have told your IFA or he should have been able to work it out from what you told him. Sorry not to be of more help.
 
Hi Suzieemm: Sounds like you are in dire need of some good financial investment advice. I cant directly advise beacuse as a QFA (the Irish equivalent to your IFA) I am only authorised to operate in Ireland. My web site has some general recommendations and tips which may be of value in pointing out what service you want your IFA inn the U.K to provide

the following is a link to an article published in one of our Sunday business papers, it might help you identify the services you need from a good independent and impartial IFA
http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=MONEY-qqqm=nav-qqqid=39883-qqqx=1.asp

You need to demand much better service from your IFA, after all they earned commission on the products they sold you. Ask for a full and comprehensive update and recommendation. You may need to consider engaging someone else to advise you if your current provider lacks the required skill or motivation to help you.

There is no easy answer to your "what should I do now " question as it depends on a variety of factors e.g loss tolerance, age, dependency on assets for income etc etc
A couple of general observations:
1) what matters is where the assets prices are going to, not where they have come from. Cheap can always get cheaper
2) There are times when capital preservation is more important than capital growth
3) The studies that show equities always outperforming, tend to have a longer time horizon than what you are looking at
4) Any investment strategy needs to be tied into an expected/required return and a loss tolerance. You cant expect high returns if you have a low loss tolerance. Every one will have their own expected return/loss tolerance dynamic
5) The assets that worked well before a downturn may not work well coming out of a downturn. e.g leveraged investments like property need a continuing supply of leverage i.e debt to provide fuel for the buyers. It may be some time before the system will support lots of leverage
6) Take your time ,dont jump to a decision, consider your options carefully.
7) Get advice from someone with the right knowledge/experience that you can trust.
8) Avoid any conflicts of interest.

Sorry to hear of your problems, hopefully we are approaching the end of the bear cycle, and things will improve from here its just hard to say that with real conviction at this stage. Best of luck
 
Diversify properly and be more defensive in these unprecedented economic times.

Do not have all your eggs in any one basket.

Too many advisors pay lip service to diversification.

Real diversification involves allocation to all asset classes and all geographic regions - so need to diversify into international equities, property, government bonds, inflation linked bonds, commodities and the more defensive assets of gold bullion and cash.

This way you are more properly prepared for further deflation and for the "onslaught of inflation" (Buffett's warning) which will likely materialise in the coming months.

If you do not have one of these assets then you are not properly diversified rather you are taking a punt on one asset class.

Good luck !
 
I think your IFA should stop giving opinions about where he thinks equities and property prices are going as he has no more of an idea than Joe Public.

If ou can't take any more pain then I would get out but I would check the T&Cs as there may be some leaving penalty.

As North Star snd George have said, yournvestment strategy really depends on the what level of risk you are comfortable with.

Equities are oretty volatile right now. There could rebound quickly or go much lower. No one really knows the answer.

Maybe take out some of the cash in the property fund and invest it in other
areas such as bonds, equities and maybe even place some in a high interest account
 
Personally I cannot understand why an accredited Financial advisor would advise a client in retirement to invest in the stock market. Surely capital security is the priority here. The OP has already made significant losses in the markets. To realise any significant gains in the equity stock market you are looking at the long term. A high interest paying bank deposit account is surely your best route. Government bonds should also be considered. On the other hand if you withdraw from your Fund you will probably also incure early penalty charges.
Probably not what you want to hear but as North Star said above you should demand answers from your IFA.
Best of luck.
 
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