Beagle – Actuaries are people who steered clear of accountancy because they thought it offered too much excitement. If your portfolio is in the default fund (is it managed by a clearing bank?) it will probably have been in equities, which, until about 6 months ago was the right thing to do. Some fund managers got badly frazzled because they flew into the ground (pressonitus?) but those who took a step back started shifting allocation and began looking at gilt and bonds (one High Street chain which runs its own pension fund drew ridicule because it got into gilt 18 months ago – look who’s laughing now).
Now of course, with rates dropping and the FTSE being grossly undervalued, they’re starting to close in and sniff at the bones again to get back in. The tragedy is, there’s nothing wrong with many of the FTSE companies currently down on their knees – market sentiment was their downfall. So although it might not be worth shifting, if you’re paying your stockbroker a large annual management charge and if he hasn’t bought home the gravy, sack him. Move on.
ISAs may be tax free, but that doesn’t make them always the best deal - don’t be target fixated on the epithet of ‘tax free’. Anglo Irish is currently offering 7.81% on some savings funds which (even with 20/40% taxed at source) is always going to be better for you than some shabby High Street ISAs (Lloyds is only offering 4.6 on some of its ISAs). FYI, Birmingham Midshires is offering 6.15% on 12 months.
Beware too (and this to Lurking as well), of reacting and polarising an investment strategy because of short term events. Swinging violently to something that is risk averse because you don’t want to lose money might well end up as a self fulfilling prophecy unless you have a proportion of your funds allocated to slightly more speculative funds. The value of your portfolio will drop in real terms anyway, as inflation shreds it real value.
Last edited by Al R; 20th Oct 2008 at 10:12.