My AXA investments have went down £3K, should I cash in?

sunni

Hi everyone

I have Axa Investment Bonds and got an evaluation and they have gone down £3K since the start of the year:(

Part of my Bonds are in Property funds and I got a letter from Axa saying they have applied a temporary deferral period of up to 6 months involving the Property fund.

The total of my Bonds are now £24k and am unsure what to do really. The 5 year plan for them is up now in December 08 so if I do cash in I lose 1%

I really don't know what to do, can anyone give me any advice?

Sunni

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dunstonh

I have Axa Investment Bonds and got an evaluation and they have gone down £3K since the start of the year:(

Not unexpected.

The total of my Bonds are now £24k and am unsure what to do really. The 5 year plan for them is up now in December 08 so if I do cash in I lose 1%

Investments go down as well as up. That is normal and should be expected at least once in a 5 year period. That is why you invest for the long term and not the short term. Your drops are not unexpected and a £3k drop to 24k is less than the stockmarket drop in total so you arent doing too badly.

I really don't know what to do, can anyone give me any advice?

Your AXA sales rep (if you used one) could but their advice is likely to be limited and probably very basic. Your IFA (if you used one) could and should. After all thats what you paid them for. If you bought direct then its your responsbility as AXA cannot advise you.

The product you have does not mature at the end of year 5. It just becomes free to exit if you wish at that point or any point after. It is open ended and AXA have over 300 funds to invest in within their bond so its pretty easy to match your risk profile.

jamesd

sunni, are you planning to spend all of the money at the five year mark or keep on saving or investing it?

If you're not spending it, all is fine but you might saying which individual funds are being held so people can express a view about how well they match your tolerance for ups and downs. An 11% down value isn't surprising at this point, given what is happening in general.

sunni

Thanks dunstonh and jamesd for your advice. I don't really need the money and was hoping to invest it again or put it into a fixed rate account. The Axa funds are in the following

Property
Higher Income
Global Managed
Axa Framlington MM Income L

Thanks again for the great advice :-)

dunstonh

You dont need to invest it again. AXAs charges reduce so taking it out and reinvesting it just increases the charges potentially. They have a good fund range so there is no reason to cash in if you still wish to invest. Apart from perhaps taking £7200 out each year to fund an ISA (which is more tax efficient).

jamesd

sunni, I haven't looked at the fund range from AXA to see if those are the best options in each area but the areas look OK for the long term. The drop in value is about what is expected for that sort of mixture at this point. It may well decrease further over the next year before rising; depends how the markets do. Not something to be greatly concerned about since that's the nature of investing and the price you pay for the higher average growth rate.

sunni

Hi everyone

Well my axa funds have went down another £1,000 and I'm really unsure what to do now. Probably scared incase they go down further and I understand this is a possibility. Just like to know opinions from people out there, if you had them would you keep them in or put them into a building society account etc?

Regards

sunni

dunstonh

You are micro managing a long term investment by looking at short term fluctuations. Investments zig zag. That is normal. I

sunni

Ok well I'll not panic then lol I don't really need the money so will leave it there another few years and hopefully the markets will have improved by then!

geoffring

Hi Sunni,

I'm in a similar position to you with Axa. However my initial investment in Investment Bonds 6yrs ago (Often known as Income Bonds) which I could now draw out without penalties, plus an additional further sum invested with Axa one year ago - which can't be drawn out without incurring penalties - has had the total current effect of effectively wiping out all the accumulated interest over the last 5yrs! I'm now back to both my original investment sums!!! Total loss £8000. Aint life grand?

My IFA employed by the Met Police ( I'm retired) says stick with it. These things go up and down. The problem I see is that it might take another 5yrs to simply make up for the current loss. That's assuming the market picks up quickly to its original state, post haste - which it doubt. I could be dead by then! Or have I got my sums wrong? Advise please

Five years ago I wish I'd originally put the whole lot in my Building Society which is the Nationwide. They seem to have been untouched by this slump and are advertising yearly investments with interest as much as 6% on higher investments.

Geoff

geoffring

Typo on original previous message. Hi Sunni. Change any 5yr. quote to 6yrs.

geoff