Investments for the future

Iain Morse
Friday 16 October 1998 19:02 EDT
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John Blackburn, 59, is retired. His wife continues to work as a consultant in a London hospital.

"I retired early, but have left my personal pension untouched. I consider the last five to 10 years of growth to be vital - remember, growth is compound - and I expect them to double in the next few years.

"I have invested most of my capital into Fidelity's Money Builder income fund, some held on PEPs, some not. This is invested in corporate bonds and gilts which have not fallen with the stockmarket. I expect the trust to show a small capital gain.

"The emphasis is on plenty of income and enough capital growth to offset inflation. No one wants to see their capital used up.

"I can switch funds just by making a phone call. This has been very useful with recent market turbulence. For instance, I moved some of my money out of Fidelity's tracker fund and into the bond fund just before the All Share index fell in value."

Mr Blackburn first invested in Fidelity's Money Builder trust two years ago. Between October 1995 and October 1998, pounds 1,000 invested would now be worth pounds 1,188, with an extra pounds 276 paid as income, a total return of pounds 1,464.

Sophie Watson is 29. She is finishing a degree in typology and graphic design.

"I first took out a PEP with Allied Dunbar eight years ago, investing pounds 2,000. Since then, I've added to it by taking out further PEPs, sometimes with much smaller sums of money to invest. Right now these are worth about pounds 6,000.

"You could say it has been very useful having this extra bit of income and capital while I am surviving on a pretty miserable grant. These days it's difficult to do a degree without graduating with a debt. I've avoided this partly because I saved and invested when I had the chance.

"Now I need an Apple Mac, the type designers swear by; I've got the cash and I don't need to take out expensive loans - the ones still running long after what you bought is out of date.

"A few words of advice for anyone who knows as little as I did about investment: ask an independent financial adviser for help. Left to myself, I'd have put the cash into a deposit account, where it would have earned far less."

An investment of pounds 1,000 in Allied Dunbar's Equity unit trust, made five years ago, was worth pounds 1,482 at the beginning of October.

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