Fidelity Investments ?

bazil1

Looking for advice

Have recently invested some money with fidelity in a invesco perpetual high income account/Stocks and shares individual savings account. We were advised by a financial advisor to do this, however we are worried with the current credit crunch that this is a bad idea as the investments can go down as well as up. Can anyone advise us wether it would be good to keep this investment or take it out? Thank you

dunstonh

can anyone advise us wether it would be good to keep this investment or take it out?

yes. Your adviser can.

You say you recently invested in that fund. Can you clarify when?

If it was between Jan and March then it was a great time to invest. Since 19th March, the fund has grown 11%. If you invested in 2007 then you have already seen the declines and pulling out now would just crytallise that loss.

however we are worried with the current credit crunch that this is a bad idea as the investments can go down as well as up.

Investments always go down as well as up and there have been far worse periods than this. The techs stock crash saw the FTSE drop 45%. The credit crunch saw the FTSE drop just over 20% although it has recovered almost half since then. Some areas are still pretty low whilst others are higher as not everything is bad at the moment.

Despite media coverage sensationalising this as the end of the world, it isnt. It's just the type of event that happens periodically.

If you are concerned about volatility then discuss this with your adviser (its what you pay them for) and it may be that some of the money can be switched to lower risk funds.

Balls_Of_Steel

bazil1 wrote: »

however we are worried with the current credit crunch that this is a bad idea as the investments can go down as well as up

No sh-i-t sherlock, weren't you told, or realise yourself, this was the case with investments in shares?

jamesd

bazil1, it's one of the best UK funds to invest in and for good reason is one of the most popular in the country. It will go up and down but for the long term investing it's for you're likely to do well with it.

It's possible to mix this fund with others to get a mixture that will go up and down less overall. Someone wanting lower up and down movement might put some of the money into a cautious managed fund and/or into the BlackRock UK Absolute Alpha fund. Either of these would grow less in good years but drop less in bad years. For the long term it's probably better not to make this change, but if you are worried about temporary drops in value it can be less stressful.

There's a fair chance that this fund might drop in value by 10-20% over the next year if the country has a substantial recession. If there's a rapid recovery it could gain by 15-25% instead. This range of possible results is part of the normal ups and downs of investing. None of us can tell the future well enough to be sure what will happen over the next year but the track record longer term is excellent and there's no reason to believe that it will do significantly less well in the future.

If you can relax and not worry it's a good choice. If you're worried and can't just let the money stay there and check on it once every year or two, ask for some of the money, not all of it, to be switched to lower volatility/risk investments to reduce the value swings of the whole portfolio.

Over the next year or two the value could end up lower than the starting value sometimes. By the time you reach the third or fourth year it's likely that the average growth will mean that it no longer drops below the starting value during the normal up and down movements.

bazil1

Thank you all for your advice it has been a great help .

bazil1

hi i invested the money in Nov .Not desperate for money but not well off was looking for a good investment i know you have to take a risk sometimes . I have asked my advisor for advice but he just said to leave it in go through the good and the bad times . thank you for taking the time to reply

bazil1

Thank you for your help , I invested the money in Nov think i will just leave it in sometimes you have to take a risk

dunstonh

Probably the worst time to invest with hindsight. However, at least you get to know these things from the start and not 4 or 5 years down the road.

cheerfulcat

bazil, FWIW here's my view - I don't normally go for funds, preferring investment trusts and individual shares, but I recently bought the Invesco Perpetual High Income fund for my SIPP and intend to hold it ( and to add to it ) more or less forever. Neil Woodford, the manager of the fund, is very well respected and has an excellent record. The fund itself is very defensively positioned. I think that over time you will be happier with your investment than you seem right now.

One possibility which you could discuss with your IFA is taking the dividends from the fund ( this might involve switching from accumulation to income units, depending on what you have now ) and either investing them elsewhere or putting them into a deposit account or cash ISA.

You might be interested in this interview with Neil Woodford from last week.

1echidna

Just an ignorant question, is this a fashion investment or if not what is the characteristics that distinguish it from one?

cheerfulcat

Hello, 1pricklyone,

is this a fashion investment or if not what is the characteristics that distinguish it from one?

I guess you're asking dunstonh but hope you don't mind me butting in...I think that what is meant by " fashion investment " is buying the fad of the day. Equity income, whether in fund form or directly held equities, is a fairly long-established way of investing.