Keeping shares / bonds

megadishu

Not very financially savvy ... if I keep my shares ... will they just drop and drop in value or can I lose the money totally and it disappears. I understand that shares go up and down.

Will they hopefully in the long term go back up???

If I do sell them do I then spread out the money ... I have no pension just my investments - and feel lucky to have them - but am I about to lose all the financial security that I have?

S.

Reaper

Normally shares go up or down in value some %. However it is possible for a company to go completely bust and for nobody to be willing to rescue them. In that case the shares will have no value. However that is rare and as long as you have shares in lots of companies (eg through a unit trust) the risk is spread out.

Nobody can say whether your shares will continue to drop in value or go back up. In the long term any that have not gone bankrupt are likely to regain their value, but that could take weeks, months, years or longer. The markets are full of uncertainty right now.

megadishu

Can the company i.e AXA go under ... is that likely ...

All my questions sort of sound ridiculous to me ... but who thought we would be where we are ....

Reaper

You say you have just shares, no pension. Then you get me rather concerned by suggesting all your investments are in a single company. If that is indeed the case it is not a good idea having all your eggs in one basket. Not that I've heard anything bad against AXA I hasten to add.

Apologies if I have misunderstood but I think it would be a good idea to speak to an IFA (Independent Financial Adviser) about your finances to make sure you have spread the risk sufficiently since you are depending on your investments for your retirement. There are a couple who post on this board, or you can go and visit one near you. I do suggest it is an Independent, not one belonging to a bank or building society.

dunstonh

I have no pension just my investments

Thats a bit like saying I have no car just petrol. A pension is just a tax wrapper that contains investments.

Can the company i.e AXA go under ... is that likely ...

Are you saying you have shares in AXA or is AXA a product provider?

Reaper

He's one :rolleyes:

earlgrey_3

megadishu wrote: »

Not very financially savvy ... if I keep my shares ... will they just drop and drop in value or can I lose the money totally and it disappears. I understand that shares go up and down.

Will they hopefully in the long term go back up???

If I do sell them do I then spread out the money ... I have no pension just my investments - and feel lucky to have them - but am I about to lose all the financial security that I have?

S.

The point of savings/investments is that you aim to get the highest possible return. You have to decide whether the best way to do that over the period you have in mind is in shares or whether cash or someother investment will do better.

Some people on this board have an extra-ordinary belief in professional financial advisers who are paid commission by the fund managers whose products they sell. Although the law has been strengthened to protect against the worst abuses the majority of advisers will still give advice that maximises their commission - at least to the extent that that can get away with it under the current law. They will always tend to advise that the client keeps his money where the adviser gets his ongoing renewal commissions. Over the last year or more most will have persuaded their clients to stay invested despite all the indications that it would not be sensible.

nicholbb

MY opinion follows but please seek advice from a IFA.

The way to make money from shares is buy when the price is low and sell at a high price. I don't know when you purchased them but you would be selling at around a 4 year low. If you need the cash now or in the near future then cash in now at a loss, if you can wait then do as the share price is likely to recover and clime over the next few years.

earlgrey_3

nicholbb wrote: »

MY opinion follows but please seek advice from a IFA.

By all means but please don't expect an IFA to suggest that you get rid of the investments that pay him commission. :rolleyes:

if you can wait then do as the share price is likely to recover and clime over the next few years.

The sensible question would be whether shares will outperform other investments or cash. Don't assume too much. Japanese shares, the Nikkei, reached 38,957 in 1989 before the bubble burst and have never recovered since. Today it closed at 10,473.09, just a quarter of what it was 19 years ago. There is absolutely no reason why that same deflationary spiral shouldn't happen again elsewhere and last just as long. Whistling in the dark doesn't help unfortunately.

Reaper

earlgrey wrote: »

Some people on this board have an extra-ordinary belief in professional financial advisers who are paid commission by the fund managers whose products they sell...

Earlgrey - it is also possible to ask most IFAs to accept a flat fee and return all the commision to yourself so that you can be sure of getting impartial advice.

Somebody who is financially savvy has no need of professional advice, but in this case the OP has already said they are not and I am concerned about their savings strategy. I doubt they will know what to make of your advice on deflationary spirals etc or how that should translate into action.

It may seem a waste of money to some to call a plumber in when you can easily learn to do plumbing yourself, but many prefer to. The same goes for financial advice.

dunstonh

Earlgrey - it is also possible to ask most IFAs to accept a flat fee and return all the commision to yourself so that you can be sure of getting impartial advice.

All IFAs have to offer that option. It is a requirement to being called an IFA. Tied agents, multi-tied and whole of market do not have to offer a fee based option.

Also, the remuneration even on commission basis is typically similar or the same for low risk funds as it is for high risk. So, it doesnt matter what risk profile you have.