cashing in investment plan / unit trust

hanwellmike

I have had a Personal Investment Plan with Halifax since July 2000. It was a fair amount (more than £20K) and based on FTSE 100. I realise now that I was buying when the FTSE 100 was around 6400 and the value of the fund has nearly always been down for the last 11 years. I got 1 statement in 2008 I think just before that crash when the fund was worth slightly more than I invested.

After 11 years I am seriously considering cashing it in and I expect that I will lose approx 10% of what I initially invested. Obviously I could just hang on for another few years and hope for an upturn but I think the stock markets are going to be up and down for a long time yet. I could probably recover the 10% loss in about 3 or 4 years by putting the money in a conventional savings account.

Should I hang on ? The ftse is around 5800 to 5900 lately. I could not face seeing another stock plunge a la September 2001 and Oct 2008.

Jegersmart

This is one of the problems or should I say "features" of a tracker-based product. In addition, inflation has eroded the value as well.

No one can tell you which way the market will go, it will of course reach 8k at some point and it will also see 4k again too - the difficulty is in knowing which order and timescale:D

I understand that the last 11 years probably feels like investing in equities is a mug's game but if you had invested in funds like Marlborough Special Situations or similar you would have made over 300% in the last 10 years - and that is after annual management fees of around 1.5% per annum.......

What I am saying is that your instinct may now be to go completely the other way in terms of risk and just put in a 3.5% per year savings account - but I would just liek to point out that what you have experienced is a classic "tracker problem" which you would *probably* avoided if you invested differently. You can of course spread your pot between cash/equities etc. but don't lose heart - you have been very unlucky!

imho, dyor.

hanwellmike

Thank you for the fedback.

I am inclined to get out now while the ftse has recovered most of what I have lost. I have been finding it depressing to keep checking the market data over the last 2 or 3 years and seeing the occasional rise followed by an inevitable fall. I just might wait to see what comes out of this wrangle in the USA over Obama's debt policy. I am hoping that if and when that is resolved it might boost the stock markets all round the world. On the other hand if they don't sort it out the markets will probably depress again..........

jayship

If u think that u have recovered your losses u might as well cash in and hold on to cash until u decide on the alternative options available

Ark_Welder

hanwellmike wrote: »

I am hoping that if and when that is resolved it might boost the stock markets all round the world.

Which would be a reason to remain invested: if the markets do rise then you will have missed out. Is cash the only alternative? Would a different equity fund be more appropriate - one that is less FTSE100 orientated, or more geographically spread?

Have you been taking the income or reinvesting? The latter is an important part of the returns too.

hanwellmike

I am dismayed that the stock market has been so volatile for the last 11 years and that is the main reason for my possible cashing in. The current economic climate is not encouraging to say the least (austerity, Greece, USA debt blah blah blah) and seeing my fund going up an down and still not breaking even is depressing.

If I cash in now I reckon I will have lost approx 8 - 10% of my original investment and it will take 3 years in a savings account at 3.5% or whatever to make that up. If I go that route then I can at least stop worrying about the stock market prices.

I do see of course that a resurgent stock market any time in the next 3 years with the ftse geeting back to 6400 + could also get back my losses and then I could cash in. If stock market hits 6400 say in next 12 months then that would be a much better bet than cashing in now. Of course the ftse could crash back to below 5000........

So take the hit now and get off the merry go round or keep gambling really........

Crystal ball required methinks.......

Totton

Looks like you have decided to get out of the stock market but perhaps splitting your holdings and having say 50-65% in a savings account and 35-50% in funds would be useful. The fund holding should reflect your risk profile which appears to be cautious or thereabouts, hence take a look at Troy Trojan, Ecclesiastical Higher Income and Newton Asian Income or similar.

Regards,
Mickey
ps. I wouldn't use a Bank or Building Soc. for my investments, get a self-service account from one of the fund supermarkets and do your own research.

hanwellmike

Ftse 100 dropped another 1% on Friday.

Bah! Humbug!!

Need to find a dog to kick.......................

Ark_Welder

http://www.trustnet.com/News/Research.aspx?id=236506
http://www.trustnet.com/News/Research.aspx?id=236291