Endowment Value reducing

StevW_3

I have 3 Phoenix life (ex-R&S alliance) policies that I got valued by them in February. 21,18 and 12 years old. I've just asked again (July) and the value has fallen on all three of them. How can this be? The newest one of them is worth less than I've paid in !

I've paid off my mortgage and seriously considering cashing them in and putting the money into an investment property.

What should I do ?

poppy10_2

StevW wrote: »

I've just asked again (July) and the value has fallen on all three of them. How can this be?

Investments can go down as well as up.

dunstonh

the value has fallen on all three of them. How can this be?

Have you been visiting Mars for the last 18 months?

I suggest you look up recession, credit crunch, house price crash and stockmarket crash on the web to get an understanding of what is happening on the world.

seriously considering cashing them in and putting the money into an investment property.

Out of the frying pan into the fire. If you dont understand that investments can go down as well as up then you are not suited to investing in property or anything else for that matter.

EdInvestor

There may be method in the OPs madness in that the price of some investment property has probably fallen by more than the value of the endowments.

But that could be by accident if the basic principle of both asset classes has not been grasped.

gouldie7

poppy10 wrote: »

Investments can go down as well as up.

No - they don't go up with Phoenix!

dunstonh

Some of the phoenix unit linked ones are doing fine. Its the with profits ones that are a problem.

pararct

dunstonh wrote: »

Some of the phoenix unit linked ones are doing fine. Its the with profits ones that are a problem.

Hows about Winterthur unit linked policies?

You kindly offered some unofficial advice a couple of years ago that it may be better to sit on these!!
I am mortgage free and simply look to them as insurance and a savings plan but if they will be reducing in value then it may be time to cash the chips in?

Also as Clerical Medical with profits I have had running since 1991 was valued recently. The open market only offered around £150 more than the cash in value.

dunstonh

unit linked plans are more directly linked to the value of their assets. A typical Equity fund is now around 40% higher than it was 6 months ago. So, whilst you get the volatility you do get the increased potential. Plus, you benefit from buying at lower unit prices (e.g. The premium you paid in March could now have made 40% in 6 months). A with profits fund doesnt get that same degree of volatility but doesnt get the same potential either.

If you look at the unit linked funds from the insurers, they are much the same assuming like for like sectors.