hi,

I've heard a couple of people recently on the main board say they have invested in equities and getting a good return. What are they/it?

My stakeholder pension (that i doubtfully pay into as I don't know any better) has a choice of investments, one of which is equities. I am currently in the basic one but am considering switching it to equities, would I even notice a difference?

Thanks

Equities are shares - they have risen a lot over the past few months



Could be the start of a bull market as cash comes out of properties or it could be fool's rally that precedes a much larger fall. I suspect it is the latter.

The fact that people (including myself) have been making good returns is largely connected to the fact that the stock market has risen recently. But shares can go up as well as down, so the first thing is you would have to be prepared to take the risk.

I expect shares to remain volatile over the next years and not to return much overall. I would personally not invest in equity funds or index trackers and the like, as the returns over the next years may well be quite flat. That said, good returns can be achieved with a well defined strategy and investment in individual stocks. This is not as difficult as it seems. The financial industry would have it that "normal" people lack the knowledge to do this, but this is not true. The Motley Fool runs several example high yield portfolios to "buy and forget".

One key point also is charges. Charges eat too much into investment returns, especially in this era of low returns. Your stakeholder pension will have a 1% annual charge. Too much if you ask me. If your fund is larger than 10k, let's talk about lower cost alternatives.

thanks guys.

No, my funds not anywhere 10k, I can't afford to invest much a month. I mostly pay into cos my dad suggested it was a good idea.

Think I'll have to put some time aside to learn more about this investment thing.

For a small fund less than £10k a stakeholder is probably the right place.

Can you tell me what provider your stakeholder is with and what product you have, and I will check out their website and see if you are getting a decent deal.

Are you a taxpayer? Even if you're not (unemployed, student), you can still get a boost of up to about 700 pounds per year from Gordon Brown for your stakeholder. I would say that it is silly to miss out on free money like that.