Scared of heights? Then get out quick
The omens are bad. Steve Lodge asks if shares are safe bets
Sunday 03 August 1997
If you'd ignored the doom-mongers and bought a Pep last summer (or, indeed, just kept your existing investments), you could be sitting on profits of as much as 30 per cent. In a single year that's a stunning return from the stock market. It far outstrips anything a building society has to offer.
But the warnings of a looming crash, rather than going away, have got ever louder. There have been parallels drawn with the run-up to the 1987 October stock market crash - the last big one - which was also preceded by a period of strongly rising share prices. This time around, share prices have risen almost uninterrupted for two and a half years - a rise of 60 per cent or more.
Interest rates are also firmly on the up, with each quarter point rise increasing the relative attractions of the building society and, in turn, potentially undermining shares. Any crash would probably still leave shares higher than this time last year, but if a longer-term bear market should set in, there could be further losses and shares could take a few years to get back to their present prices. And even if the stock market doesn't crash, it would be a brave investor who thought it might repeat its recent strong performance. Looking out for the rest of the year, then, there is probably more chance of losing than making money - and losses could be substantial.
What this means is that now is not a good time to be lobbing large amounts into stock market investments in the hope of catching the recent wave. Better instead to wait until prices have come back. Whether you should cash in existing investments, however, depends in part on what else you plan to do with the money, as well as any restrictions on those investments - for example if you have Peps that, once encashed are lost, or if you are committed to savings plans that will penalise you if discontinued.
Many people will have a range of privatisation shares that have performed strongly. If these were investments you had earmarked to cash in, say to help buy or move house sometime this year, you should almost certainly be looking at selling them now. But if your savings are put aside for the longer term, you are best off leaving them. Trying to sell and then buy back after a crash is a mug's game - investment timing is notoriously difficult, even for the professionals. You could sell and then miss the bounceback. And over the longer term the higher returns that shares should produce should more than make up for any crash.
If you are looking to cash in your shares, generally speaking you will need a stockbroker to sell them for you. There are a range of low-cost services with prices starting at around pounds 10 for shareholdings of up to pounds 1,000 - which may be particularly attractive for those with small numbers of shares in a range of privatised companies.
The very cheapest brokers operate by post; they will not sell until they have your share certificate. For example, the Share Centre (0800 800008), based in Tring, will sell shares in any privatisation or big company - those in the FT-SE 100 index - for 1 per cent of the value of the shares, with a minimum for each company of pounds 7.50. You will need to phone first to be sent a transfer form and then return it with your share certificate.
The risk with a postal service is that the price might crash between you sending off your certificate and the shares being sold. The Share Centre covers this by allowing sellers to set a target price below which their shares will not be sold.
If you want to sell your shares straight away you are probably going to have pay more. ShareLink (0121 200 2242) will allow new customers to sell shareholdings worth up to pounds 1,300 almost immediately for a flat pounds 20. (Beyond pounds 1,300 and up to pounds 3,000 you pay 1.5 per cent.) You give your details over the phone and say how many shares you want to sell, and then as soon as you put the phone down ShareLink goes and sells them "at best" or at no less than an agreed price. You then send your certificate in and, once it is received, you are sent your money. Caterdeal (on 01708 742288) offers cheaper
selling prices on its Phonetrade service but there is a registration fee of pounds 10 and you need to fill in a form. Prices are pounds 9 for shares in a company worth up to pounds 500, pounds 10 up to pounds 1,000 and pounds 17.50 up to pounds 2,000.
NatWest offers instant selling in 280 of its branches for a minimum of pounds 18 to pounds 20, depending on the company. You need your share certificate(s) and proof of identity. The sale proceeds are paid in days by cheque or directly into a NatWest account.
None of these services, however, gives advice on whether you should be selling in the first place - with stockbrokers, that costs even more.
q Moneyfacts, which provides our tables of saving and borrowing rates, has an instant "faxback" service giving full details of a range of low- cost, no-advice share dealing services. Dial 0336 400245 on your fax, then press the start key when prompted. Note though, the service costs 50p a minute and will take around eight minutes.
17 April 2015 06:00 PM
23 April 2015 12:00 AM
Experts disagree about the 7% increase over the past year
22 April 2015 07:29 AM
Too many mortgages are being sold with misleading gimmicks
21 April 2015 09:54 AM
The firm’s revenues slumped by a third to £217 million in 2014
21 April 2015 12:00 AM
The average quote for a buildings and contents policy has fallen by 3.6 per cent
10 April 2015 07:00 PM
15 April 2015 12:56 PM
Joining Barclays Blue Rewards costs £3 a month but then lets customers in for handouts of up to £15 a month
15 April 2015 07:27 AM
A charity is urging anyone struggling financially to see if they could get help from the state
13 April 2015 11:39 AM
Video: With an election looming, a hung parliament could hit sterling
03 April 2015 08:00 PM
03 April 2015 08:00 PM
02 April 2015 01:14 PM
Video: Tom McPhail, head of pensions at Hargreaves Lansdown, says May's outcome could alter your pension
30 March 2015 04:22 PM
Video: Simon Read talks to Fidelity's Tom Stevenson
- 1 I've been called an abusive and dangerous parent, when all I did was listen to my transgender child
- 2 Migrant crisis: Greek soldier saved 20 people singlehandedly off Rhodes beach
- 3 Sofyen Belamouadden murder: The inside story of a crime that horrified Britain
- 4 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 5 UK weather: Britain braced for snow as arctic air mass moves in
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Migrant boat disaster: Ukip candidate mocks victims in sickening Twitter post
Nigel Farage wants the BBC to stop making programmes like Doctor Who, Strictly Come Dancing, and Top Gear
Global warming: Scientists say temperatures could rise by 6C by 2100 and call for action ahead of UN meeting in Paris
General Election 2015: Britain would become a 'communist dictatorship' under Ed Miliband and Nicola Sturgeon, claims wife of Michael Gove
iJobs Money & Business
£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...
£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...
Day In a Page
Surrounded by the Western fells, this five-bedroom Georgian home retains many original features including panel-plastered ceilings, sash windows and fireplaces.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B, subject to change of use permissions.
A former period coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, office, kennels and an outbuilding that's currently used as a gym.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
This four-bedroom home has exposed brick chimneys and a vaulted ceiling in a breakfast room that's ideal for summer entertaining - the doors open to the patio and garden.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace