Some help please

clearmydebts

Hi,

I invested €73,000 last year in different shares. Unfortunatley, this was at a time when euro was performing that well so it translated to £53,000. I received my report today and my shares are down -14% (£42,000). If I translate this to euros it is nearly €20K.

I am unsure of what to do. I am worried that it has gone down so much in a year and part of me wants to withdraw the money (there is a charge of about £1,800 to do this) as I feel the market is going to decline further,

Is it better for me to invest it in a high interest bank account. I am willing to accept the loss as it is now but don't think I could cope with losing anymore.

I just feel so stupid as I don't know what the best thing to do is. I am so sorry I invested as literally the week after the shares bubble burst and I have seen no returns at all.

dunstonh

100% investment into shares is fairly high risk. Overseas shares more so. A 14% drop is not much at all. The tech stocks decline saw 43% wiped off share values. We are only down around 20% currently so a 14% drop is minor.

s it better for me to invest it in a high interest bank account.

you dont invest in a bank account. You save. If you sell the lot you crystallise a paper loss which you will never get back in a savings account which will just about keep the same value in real terms.

With hindsight, you should have considered the risk you were taking. Now you have seen a minor loss and it has worried you, you need to review your risk tolerance now.

The other thing to consider is that you are only 1 year in. Investments into shares are long term. That means a minimum of 5-10 years. In that period you would see quite a few drops of more than 10% as well as quite a few gains or more than 10%. Zig zagging on investment returns is quite normal and to be expected. There has been no bubble burst.

LucyTheDwarf

Do you need to use the money? Can you afford to not touch it for 5+ years?

If you do not need the money in the next 5 years, I'd stay put. Pretend it doesn't exist. And hope that it looks a bit better when I look again in 5 years time. Ah, the ostrich with his head in the sand approach.

If you do need the money, you shouldn't really have invested it in the first place...

*hug*

clearmydebts

Hi,

Thanks to you both for the advice. Don't need the money at the moment so I think we will forget about it. I should have explained better earlier, the financial advisor did a risk assessment and has put the funds into different funds. Just freaked out a bit because I am new to this.

I do appreciate the advice though and I have calmed down.

dunstonh

clearmydebts wrote: »

Hi,

Thanks to you both for the advice. Don't need the money at the moment so I think we will forget about it. I should have explained better earlier, the financial advisor did a risk assessment and has put the funds into different funds. Just freaked out a bit because I am new to this.

I do appreciate the advice though and I have calmed down.

OK, that changes things a little. Funds diversify the risk so it may not be as high risk as shares. Although the use of Euro funds still keeps exchange rates at risk. It is unusual to see a financial adviser recommend funds that are not in sterling (certainly an option that is available but not one I would expect to see with a novice investor and an amount of this size). What type of funds are they and who is the provider?

jamesd

If you say what the funds were originally and what they are now I'm sure that someone will give you a second opinion on how the selection looks.