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Independents' Day

Don't panic and you can ride out the storm

In the second MoneyWatch blog, Simon Dickerson of Pulse Financial Consultants says GPs shouldn't be panicked into rash monetary decisions by the banking crisis.

In the second MoneyWatch blog, Simon Dickerson of Pulse Financial Consultants says GPs shouldn't be panicked into rash monetary decisions by the banking crisis.

Another week and another crisis; the world's stock markets are still in a state of shock by the US congresses rejection of the bail out plan for Wall Street.

This added to the UK's governments recent "purchase" of the Bradford & Bingley has meant that the FTSE 100 index has fallen a further 7% in the previous 7 days, with many markets around the world being more severely affected.

The rejection by US congress has come as something of a surprise. The original 3 page document giving Wall Street free reign to spend $700billion as it wished has now become a 100 page plus document with some fairly serious limitations in order to appease all sides of the political spectrum; this was designed to ensure the bill was passed.

The problem lies with timing. The White House is currently impotent, a discredited US president with only 8 weeks left in power does not have the political clout to push through such a controversial bill and many congressmen are not happy going back to their constituents seeking re-election on the back of voting through what is seen by many in the US as a tax payers hand out to Wall Street bankers who with too much money and not enough more sense.

The overriding issues for both the US and the world's economy ensures that it is almost certain that a rescue package will be voted through in the near future, however the time lag has ensured further turmoil in an already worried market.

So faced with the above what are we telling clients?

Well dull though it may sound, "be sensible and don't panic". There are some practical measures that we can all make in order to ensure that our savings, investments and pensions survive as unscathed as possible.

All UK bank and building society deposits are protected by the "investors compensation scheme" this means that the first £35,000 of any deposit will be returned in full if the organisation is unable to repay its depositors.

For anyone with serious concerns they should consider splitting cash assets to ensure they do not have more than this sum with any one company.

Most people who are actively investing into pensions and ISA's are doing so on a regular, normally monthly basis. For those concerned with the current downturn in the equity market it is fairly simple to divert ongoing regular premiums away from higher risk funds towards funds with lower exposure to the stock market.

There are issues with this approach as it is the "units" purchased whilst the stock market is low that fuels the growth in funds when better times return, however it can be difficult for both investors and advisers to continue paying into investments that are falling in value.

All investments need time, and the vast majority of investments clients have will recover, and only a few very high risk funds will ever fail entirely.

The only people who should have real concerns at this time is those within five years of retirement, or those who need access to their capital within the next couple of years and who can't ride out this current turmoil.

Those people, especially if relying on private arrangements and not the NHS pension scheme should really seek independent advice.

Simon Dickerson, consultant at Pulse Financial Consultants Simon Dickerson, consultant at Pulse Financial Consultants Further information

Pulse Financial Consultants can be contacted by clicking the image above or by email at

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