With investment values falling fairly consistently you may be wondering what to do. Of course, there is no simple answer; even the traditional investors' ‘bolthole’ of gold does not appear to be offering much potential at the moment.

But perhaps now is a good time to reinforce the message in respect of managing your wealth; investments should always be seen over the long term. So even with markets having fallen fairly consistently during the past few months, the long term picture is rather different. After all, the FTSE100, which was set at a base of 1,000 in 1984, is still (at time of writing) above 4,000 points. Put another way, a portfolio of shares invested across this index is now worth four times as much as it was 24.5 years ago. And don’t forget. It will have generated income during the intervening years.

For many people, their main investment strategy may relate to planning their retirement, so the question of short term falls in value only becomes relevant when they are approaching retirement. At other times, a fall in equity values might even be seen as a buying opportunity by those who believe that markets usually ‘correct’ themselves.

Indeed, for many commentators, the current equity market weakness is actually an over-correction towards long term trends, because share prices had become unrealistically over-priced during the past decade. In fact, this coincides with what many people also consider to have been a sustained over-valuation of property markets, which led to reckless lending (and borrowing) amongst homeowners. It certainly appears to account for a dramatic fall in the savings ratio over the same period.

Nearing retirement?
If you are in the run-up to retirement, the last thing you may wish to do at the moment is to crystallise your equity investments in order to purchase an annuity, especially as interest rates are likely to fall even further over the next few months. For this reason, an option that allows you to remain invested in equities but still to access your tax free 25% pension commencement lump sum may look attractive.

So called ‘pension drawdown’ is available from age 50 (this is rising to age 55 in April 2010) up until age 74, after which most people will generally have to buy an annuity. There is an option to use what is called an alternatively secured pension from age 75 onwards, but the rules are complex and it will not appeal to everyone.

If you are wondering what to do, about your investments and retirement planning, contact Robert Bruce Associates for individual assistance?