David Prosser: Diversify now for life after Bolton

Bolton's retirement from front-line fund management has been rumoured for some time; Fidelity is doing the decent thing by giving 250,000 Special Situations investors plenty of advance warning. But what should those investors do now?

The first thing to say is Bolton isn't going anywhere yet. He will continue to look after your money until the end of next year, and half of it will remain with him for a further 12 months after that. In the meantime, there's no reason to think Bolton won't continue beating his rivals hands down.

That said, there's no getting away from the fact that Bolton is irreplaceable. Special Situations has become the largest retail fund in Britain because Bolton's track record is so impressive. As my colleague Jonathan Davis explains on page 15, he has produced outstanding performance for more than 25 years, in a range of market environments. Fidelity has no one to match him - nor does any other fund manager.

Moreover, Special Situations is far too big. At £5.4bn, even Bolton must be struggling to find sufficient numbers of opportunities among the small and medium-size companies in which these funds are designed to invest. Splitting the assets in half will help, but the two new funds will still be much larger than all their rivals.

Many investors will have been tempted to sink a large chunk of their savings into Special Situations. Poor diversification - failing to spread your cash across different asset classes, sectors and regions - is the wrong strategy at the best of times. Once Bolton has gone, betting the house on this fund alone makes even less sense.

Fidelity itself intends to help you spread risk. After the split, one half of the fund will be invested with the same brief as today, but the other will be given a more international mandate (Bolton hasn't yet decided which of the two funds he will run in 2007).

Even so, the next 15 months or so is a window of opportunity. By all means, maintain a holding in one or both of the new funds. Fidelity deserves some loyalty - it was smart enough to back Bolton in the first place. But you should also look for alternative homes for your money - and review your spread of investments.

* * * Black marks for Argos. Not content with infuriating thousands of customers by failing to honour an offer of supercheap TVs, the retailer is also refusing to do its bit for charity.

Two weeks ago, Argos's website mistakenly advertised a £350, 28in Bush TV and DVD recorder package for 49p. Up to 10,000 people signed up for the deal before Argos spotted the error - it immediately pulled the offer and said no one would get their TVs.

The law was on Argos's side. This was a genuine mistake and Argos was entitled to retract the offer, especially as most people would have realised it had screwed up.

However, some of the people who missed out on the deal then got together and asked Argos to donate one of the £350 TVs to a children's hospital.

It was a smashing idea. To Argos, £350 is absolute peanuts, and the gesture would have helped it to retrieve an unfortunate situation.

Sadly, Argos doesn't see it that way. The retailer says it already gives to charity and that it "won't be able to help on this occasion". How mean can you get?