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A week is a long time in finance

Despite all the continuing turbulence in financial markets, now could be a good time to invest in stocks and shares. But in the search for bargains, and don't forget to keep what you've got secure, says Justine Roberts of Pulse Financial Consultants

Despite all the continuing turbulence in financial markets, now could be a good time to invest in stocks and shares. But in the search for bargains, and don't forget to keep what you've got secure, says Justine Roberts of Pulse Financial Consultants



Only last week we told you that all UK bank and building society deposits are protected by the "investors compensation scheme", which protects the first £35,000 of our deposits if the bank or building society goes to the wall. This sum is rising to £50,000 and may increase further in future.

Protection of bank deposits has been a hot issue ever since the surprise move by Germany to secure 100% of their depositor's savings. The German Chancellor's announcement led to a number of other European countries guaranteeing their bank's deposits to a far greater degree - even though it appears Angela Merkel was 'misunderstood'.

With such bank turbulance it is highly likely that vast sums of money, from private individuals, but more likely from institutional investors, will flock to contries with banks with 100% deposit guaratees. Thousands of depositors, for example, have taken their savings to Ireland, which was the first to give this protection for its banks.

This in itself presents a risk to investors who could lose interest by investing in products that provide lower interest rates than they might find elsewhere.

Remember, for those with investments in UK deposits, under current rules in the UK the £50,000 sum is for money held with any one individually registered company.

For example HSBOS owns several companies and only offers a one off protection for investors in Halifax, Intelligent finance, Birmingham Midshires, Bank of Scotland, Saga and the AA. Investments in any mix of these companies would only receive "one" guarantee.

Stocks

It continues to be a turbulent time again in the stock market. We've said it before but there are still some merits to currently investing in the stock market, especially if you are investing for the longer term.

We like funds such as Invesco Perpetual Income, High Income and Jupiter Income; these are not investing heavily in banks, have good long term track records and experienced fund managers.

It's important to seek advice, not only for those considering taking the plunge into investing under the current conditions, but also for those with existing investments to keep abreast with how they are performing and coping with recent market conditions.

It's a complex area to navigate at the best of times, but more so lately with the rapid changes, take overs and uncertaintly.

Interest rates

The next big question is will interest rates fall further, and how many more banks will increase their mortgage rates? This is an especially difficult time for buy to let investors with little equity, who are coming to the end of a deal.

Property values have decreased and buy to let mortage deals are more expensive than 2 and 3 years ago, so many owners will have to expect a significant increase in the cost of their mortgage if they cannot invest more capital to increase the equity in their buy to let properties.

It might not seem it when the head lines are nothing but doom and gloom about the economy, but there is more to finances than mortages and bank savings!

Protecting our mortgages and lifestyle in the event of illness or death, should not be over looked, to ensure our families can cope in case something does go wrong with our health.

This is especially important now considering the current climate. For those about to retire, or already retired, inheritance tax planing should also not be forgotten.

These things do not go away in a credit cruch or when there's a crisis with the economy, and should be considered as an important part of our planning.

Justine Roberts of Pulse Financial Consultants Justine Roberts of Pulse Financial Consultants Further information




Pulse Financial Consultants can be contacted by clicking the image above or by email at enquiries@pulsefinancialconsultants.com

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