27th May 09

Lancashire Business View : Special feature : Wealth Management

Comment from Chris Harrington, Financial Planning Consultant, Cowgill Holloway LLP

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“There are always many different investment opportunities that can be considered and each of them claim to be able to provide investors with the returns and consistency that they require. Sifting through such options is often a difficult task and has become even more so, with many investment markets having fallen sharply, leaving investors unsure as to which direction to take. Even the safe haven of deposit accounts has become unattractive, with deposit rates having been drastically reduced.

“There are, however, certain opportunities available for investors and deposit holders that do look attractive and which merit consideration:

 

Structured Investments are designed to provide fixed rates of return that are akin with those generated through equity investments but which have either complete capital protection or a significant level of capital protection. Those with complete capital protection can potentially be used as an alternative to low interest deposit accounts. However, whilst the headline returns of many such arrangements look very good, it is vital to closely examine the details and to determine who is actually providing this protection of capital

 

Tracker Funds are a step further up the risk scale but there is a view that if one buys into such funds now, one is doing so at a very low price

 

Multi Asset Funds provide a simple and cost effective way of accessing all asset classes and diversifying your monies so as to reduce the exposure to investment risk.

 

“When making investments into these or any other type of investment it is important to remember certain key points:

 

Ensure that the investments you make meet with your attitude towards investment risk. A sensible diversification of monies across the different asset classes available will help you to achieve this

 

Forget about trying to time the markets; it is the length of time that you are invested for that is the key

 

Keep a close eye on the tax position and try to ensure that investments you make fall under capital gains tax rules (18%) as opposed to income tax rules (20%, 40% and soon to be 50%).”