Mai 2004 May

Financial Corner

A new tax year, a new Individual Savings Account (ISA) allowance. But how do you pick the right one? With so many funds to choose from this can be a difficult choice to make. So we have put together some points to consider before making your choice.

1. Past Performance
Good past performance does not necessarily mean good performance in the future. At the start of 2000 for instance investors placed large amounts of money into technology funds which made large gains over the previous three years. However that year saw these funds take a significant down fall. However, don’t ignore past performance altogether.

2. Risk
Some funds are more volatile than others, in other words, they carry a greater chance of a big loss. When discussing your investment choice with your financial adviser, make sure that you are comfortable with the level of risk associated with chosen fund.

3. Question to ask
Ask you financial adviser if the manager of the funds recommended invests his own money in that fund. This does not necessarily guarantee good performance, but it does ensure commitment.

4 Your Portfolio
Investors should consider creating a balanced portfolio with a range of funds investing in a mix of asset classes, i.e., Bonds, Equities and Property. It makes sense to spread your money broadly so that you are not to vulnerable to a down turn in any one sector. Government bonds for instance usually do well when the economy is weak, where as Equities tend to do badly.

Finally, despite the governments gradually reducing of tax advantages, ISA’s still offer a tax efficient return on investment over the medium to long term. So why wait till the end of tax year before making your investment choice. Consider your options early, take your time, and seek professional advice when you need it.

If you have any questions
e-mail us at, ’phone 01978 860897 or send your letters to the address below.

Article supplied by
H.L. Financial Consultants. Unit 9, The Malthouse, Regent Street, Llangollen, LL20 8HS.

H.L. Financial consultants is an appointed representative of Berkeley Independent Advisers Ltd. which is authorised and regulated by the Financial Services Authority.

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