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Tape Transcript by JANE TEMPLE

MONEY BOX LIVE

Presenter: Vincent Duggleby

Guests: Alan Warner Amanda Davidson

TRANSMISSION 3rd SEPT 2001 1500 - 1530 RADIO 4

ANNOUNCER : But now it's time for the first in the new series of MONEY BOX LIVE with Vincent Duggleby.

DUGGLEBY: Good afternoon and good to be back taking your calls again on Money Box Live. Summer holidays are the time when most of us forget about investment and enjoy a bit of relaxation in the sun. The sobering news is that most investors will have found themselves rather less well off on their return. The economic signals, most of which admittedly are coming out of the United States, are not good. The Dow Jones average closed below 10,000 on Friday for the first time since April, and markets closed today - the 100 share index is 1500 points or 20% lower than at the start of the year. Indeed it's down 50 points today. What few people seem to have noticed however is that the index is now virtually the same as it was in September l997, so an index tracker fund has made no profit over 4 years. That's one powerful reason why insurance companies and pension funds are getting so worried that they're cutting bonuses and the returns on with profits bonds. Savers have also been hurt by falling interest rates which have come down from 7.5% to 5% in the last 3 years. According to the trade magazine 'Money Facts' the average high yielding notice account now pays only 2.5% after basic rate tax. The consolation of course for those with property especially in London and the South East is that it could easily be worth 50% more than you paid for it 3 or 4 years ago, and those who've borrowed to the hilt to buy 2nd, 3rd or even 4th properties to rent out are being richly rewarded. Borrowers and consumers rule okay? But do I hear someone say just as well or we'd be deep in recession by now. But is the day of the non performing bonus touting fund manager coming to an end? Why should you buy a product from an advisor whose half promises aren't worth the paper on which the fact file has been written? And will the independent enquiry into Equitable Life reveal a pattern of complacency and hypocrisy which will shake all financial institutions and those who are supposed to regulate them? 08700 100 444 is the number for your calls to Money Box Live on savings and investment, and with me to answer them: two independent advisors - Amanda Davidson from Holden Meehan and Alan Warner from Douglas Deakin Young. And the very first call is Jack in Seaton. Jack are you there?

JACK: Yes I'm here.

DUGGLEBY: Right, your question?

JACK: Well my question is I've recently - well today actually been enquiring about investment in the bank/building societies sphere, and they appear to applying a reduction of 0.3 set against a bank rate reduction of 0.25 - the last reduction a nd this isn't the first time this has happened over the years I've noticed. They're pretty good at doing the reductions but they're not very good at restoring when it starts climbing again.

DUGGLEBY: Yeah, you're absolutely right. Jack, some of them are, but not all Alan?

WARNER: Yes there are still some very competitive savings accounts out there. It depends to some extent whether you're prepared to go to the web. Are you prepared to use the web Jack?

JACK: No I'm not - I'm not attached to the web at all

WARNER: You're not. Well if you're not prepared to use the web then the Cheltenham & Gloucesters produces one of the best returns for an instant access account. They've got 2 possible accounts - direct transfer account and tracker account. Now these are telephone accounts and the tracker account is still paying 4.75% gross or if you want monthly income 4.65.

DUGGLEBY: And the important thing there Jack is that they cannot cut that by more than the base rate cut cos that's the whole point of the tracker.

JACK: I see

DUGGLEBY: So there are one or two like that.

JACK: I'm sorry - it was the Cheltenham & Gloucester I was contacting. I've invested in their Tessa/ISA account.

DUGGLEBY: Okay but just bear in mind that it's a tracker fund and there are one or two others like it. Alan:

WARNER: If you were prepared to commit yourself for a notice period of shall we say 60 days then the Birmingham & Midshires has a very competitive account and that's paying on balances over �5,000 - 5.85% gross, so that's a very competitive rate of interest and one of the most competitive on the market, but you have to give 60 days notice of withdrawals or suffer penalties.

JACK: Yes yes, and I contacted them last week actually - at the end of last week.

DUGGLEBY: You obviously know what you're doing Jack!

JACK: And they're - they're going to take it down to 5.6 as from the 17th September.

WARNER: Well with all these accounts you have to keep your eyes open because unfortunately rates are changing all the time. The other one for you to look at is the Bristol & West direct rate tracker, and that's currently paying 5.5% so that remains again pretty competitive if you're not prepared to use the web.

DUGGLEBY: Right, so that's several ideas there. Amanda, one of the difficulties that we have though is that sometimes these accounts have bonuses attached or introductory supplements or something?

DAVIDSON: They do - you've got to be really careful about something like you know an extra half percent for 6 months and just make sure that you check your rates from time to time. I mean unfortunately you just can't put your money into a deposit account and just hope it's going to be always good because often they come in with very competitive rates and then what happens is that after a while they just rely on customer inertia and they just simply drop the rates, so you've got to keep looking at it at least every 6 months I reckon.

DUGGLEBY: I thought the Ombudsman had something to say about this business of cutting rates when people essentially find themselves into an attractive account and then suddenly find they're not attractive, and I thought the regulatory authorities had something to say about this?

DAVIDSON: I think they've got to let them know but not quite sure it's more than that.

DUGGLEBY: Yeah it's - it's regrettable Jack but true that you just have to keep watching these things. If you are not happy with the rate check it against the newspapers who publish each week - the competitive rates available. See if yours measures up and if it doesn't just move.

JACK: Yes

DUGGLEBY: Very boring but necessary

JACK: Yes well I'm doing a lot more moving than I've done for many years.

DUGGLEBY: Well I'm glad to hear it. Alright - thank you for the call. Now Richard in Neath?

RICHARD: Hello

DUGGLEBY Hello

RICHARD: Yes. I was advised 14 months ago to invest in a Aberdeen technology maxi ISA which I make a regular monthly contribution to. Like most of the stock exchange it's not performing very well at the moment. I'm now in a position to increase the monthly contributions but I'm not sure whether I should carry on investing in this technology ISA or transfer to an index tracking fund which has got lower management charges. The other issue is I'm a nurse and I don't think I'm ever likely to exceed the �7,000 maximum contribution, so I'm wondering whether I should actually split it between a mini cash ISA and a mini stocks and share ISA?

DUGGLEBY: Mmm. Right Amanda can you just first of all deal with Aberdeen Tech - is it on your current recommendations or are you steering clear of tech shares?

DAVIDSON: Well - Richard how much of your money is going into the Aberdeen Technology?

RICHARD: It's just �50 a month.

DAVIDSON: Is it? - and do you have savings else where or is this your major savings?

RICHARD: Well I've got some savings within a Smile Savings Account which is actually performing better.

DAVIDSON Yes I'm sure it has. I mean technology funds have just completely dived over the last few months as you'll be well aware. But do you have any other equity investments?

RICHARD: No I don't

DAVIDSON: This is your only one. Okay. Well I would say to you that I would look to limit my exposure in a technology fund because you've got - if you like you have got an unbalanced portfolio because you've got monies in deposit accounts and then the rest is in very high risk investment which is this technology fund. I'm not sure I would actually come out of it but just simply redirect your �50 a month elsewhere, and I absolutely agree with what you're saying about going for a mini equity ISA because if you're not going to go up to the �7,000 then you might as well benefit by getting tax free interest on some of your deposit monies by going into a mini cash ISA.

DUGGLEBY: Right, so that implies here that you can put - as you're probably aware you put 3,000 into the mini and 3,000 into the maxi so you can carry on with the share side of it, but you can then put the rest of the money and instead of paying tax on it you can get it tax free. Alan, what do you think about diverting this �50 a month? - what are your sort of safe kind of funds for the equity content?

WARNER: Well with the market standing about 5,300 I don't think that's a bad level at which to start investing in a tracking fund, and bearing in mind that Richard's only got this exposure to a tech fund I think that's a reasonable place to start. I think the other option would be to look at a broadly based international fund - doubtless Aberdeen offers such a thing. Perhaps you could ask them for details of that fund and if it's got a good spread across the US, Europe, a little bit in the Far East perhaps, that would be the sort of fund I might look at.

DUGGLEBY: But you can open Richard - you can open your ISA for this present tax year. I take it your ISA of course is for the last tax year obviously because you've been paying into it for 14 months, so you've got the option of starting again for 2001/2002 - that's your current year. So the suggestion is that you go to another provider, pick perhaps a tracker fund. Again, can we have just one or two ideas for tracker funds?

WARNER: Legal & General, Norwich Union - they both have very competitive tracker funds with low charges.

DUGGLEBY: That's the key isn't it? - low charges? Right. So get hold - get hold of 2 or 3 of these tracker funds and then consider opening a mini ISA which will be the shares bit and then you can keep the rest of your options open with a mini ISA cash and you can go to the one of the building societies that we've already mentioned and they'll pay you a good rate of interest tax free.

RICHARD: Are there any penalty charges for closing the - the current ISA?

DUGGLEBY: No we're not suggesting you close it. We're suggesting you just leave it.

DAVIDSON: No if you stop paying into it there won't be any penalty charges on that.

RICHARD: Okay. Thanks very much.

DUGGLEBY: Right, okay and now we have I think it's Iris in London?

IRIS: Yes, good afternoon and thank you for taking my call. We've invested in the Equitable through bonds, an investment plan and PIP. All written under trust for our children. My instinct - gut instinct is to take the hint and lose 21.5% and get out, but in the paper yesterday they suggested that the government may compensate policy holders. My question is should I stay with this or if I leave would - would we be able to be compensated once the funds had been withdrawn?

DUGGLEBY: Now these are - these are long term funds for the benefit of your children?

IRIS: Yes

DUGGLEBY: Right, so then obviously not - they were designed to mature in many years time?

IRIS: Well some of them are coming up in 2009.

DUGGLEBY: 2009 - still quite a long way away. Alright well let's first of all just deal with the state of Inquiries into Equitable Life. Alan, we've had this independent Inquiry but it comes on top of a whole lot of other things that are going on

WARNER: Yes, well we've got Equitable coming up with their own plan for how they're going to deal with the so called guaranteed annuity rate problem. We've got now the new government Inquiry. That's not going to report for 18 months or so, so I think we should set that aside cos I don't think that's going to produce any results soon enough. I think what we're really interested in is what Equitable are going to come up with within the next couple of months we hope to tell us what sort of proposal they have and how they propose to sort out this guaranteed annuity rate.

DUGGLEBY: This is as it were redividing the cake if I may put it that way?

WARNER: This is redividing the cake and what's anticipated is that holders of guaranteed annuity rates would be offered an uplift in their fund of 15 to 20% - inevitably to some extent at the expense of policy holders without guarantees.

DUGGLEBY: Like Iris

WARNER: Like Iris who doesn't have any guarantees with her bonds and her other contracts, but I think it's fair to say that the mark down we've already seen in the value of the funds and the so called market value adjuster or financial penalty if she comes out already reflects the state of play and reflects the fact that holders of guaranteed annuity rates will get this uplift if the agreement goes through.

DUGGLEBY: But the point of things for people like Iris is that she's looking forward to at least another 5, 10 - maybe 15 years performance. I mean are Equitable Life even from the lower base likely to give that performance?

DAVIDSON: Well that's the big question isn't it? - because even if they weather this storm it's going to take them an awfully long time to actually get back on their feet again if they ever do in the same way that they went beforehand. Iris you've got some with profits bonds. Some of these have times when you can get out without a market value adjuster, so the first thing you need to do is to look at the policies to see when those exit times are because obviously if one is coming up in the next few months and you might want to wait and then avoid the 7.5% market value adjuster on that, but I would advise you certainly to look very carefully at getting out and what it would cost you, and you need to take some independent financial advice because these are in trust so you will obviously need to address that issue as well.

DUGGLEBY: Presumably people like Iris will have a vote in this will they to decide whether they want?

WARNER: With profits policy holders will have a vote yes.

DUGGLEBY: So when you have this vote Iris you'll have to exercise it in the way you think best. Have we any views about the implications of the vote being rejected and Equitable just being left to sink?

IRIS: Well as a very sort of ignorant lay person I suppose I just - I read the newspaper one week and think ah yes this is what I'm going to do and the next week I change my mind.

DUGGLEBY: Absolutely (talking over) - it is very very difficult

IRIS: About as unreliable as Equitable

DUGGLEBY: Yeah - you're not alone. I think everybody is in the same position. They think that they've got something to cling onto and then suddenly another change comes along and you just don't - but I think - are we right in saying that the Equitable have got to have this vote. I mean that can't be delayed Alan?

WARNER: They've got to have this vote. And to answer the question - how should she vote? My view is that if the vote goes negative it will be disastrous for everybody. They'll be you know big loss of confidence and a further exit of funds - exists of funds, so my advice would be to vote, if you're still there.

DUGGLEBY: Not least of course it brings in the extra money from the Halifax?

WARNER: It brings in the extra up to �500 million from the Halifax. But there is one point we should make clear here - are all your investments with profits or are some of them unit linked because if they're unit linked?

IRIS: No none of them are unit linked. In fact I didn't know anything about unit linked. I've only just been reading about this.

WARNER: Right, so they're all affected by this dreadful situation?

IRIS: Yes they are, and I'm worried that they're going to impose yet another cut. I mean there's nothing to stop them doing it the second time - there's nothing to stop them doing it a third time is there?

DUGGLEBY: No. Not even their current returns you see are guaranteed. They're just simply in the form of terminal bonuses which could be taken away at any time. I mean there is more that could be taken away. You have to face that fact Amanda?

DAVIDSON: And also there could be a market value adjuster increase which would clearly affect Iris' policies as well.

WARNER: It sounds to me Iris as if you do have a lot with the Equitable Life

IRIS: Which is very stupid yes I do appreciate that yes

WARNER: So my feeling is that because - if this represents a high proportion of your savings and your wealth then perhaps you should think in terms of surrendering some of these policies - you know i.e. sitting on the fence, cancelling some and staying with others. I wouldn't want to have all my eggs in the Equitable basket right now.

DUGGLEBY: Okay, thanks for that call

IRIS: Well thank you for your help

DUGGLEBY: And Dorothy now in Haywards Health:

DOROTHY: I'm still paying nearly �60 a month to Equitable Life for 2 with profits policies for my sons. They were taken out June l988 for 30 years. If I stop but do not get out of Equitable Life, will this jeopardize the amounts they might - I might or they might eventually receive? I mean is it a question of good money after bad now?

DUGGLEBY: Right, these are life insurance policies Amanda? - now can you make them fully paid up?

DAVIDSON: The answer is yes you can because they've been going since l988. There will be a value there, but if you stop them now the chances are that Equitable can adjust the bonuses and the values so I would not do anything before I got some quotations on what exactly would be there if you were to decide to stop. And what the implications of so doing would be because you need to look at these very carefully, but that said you've got almost 20 years more on these policies which is a long time to go for again clearly as we were discussing earlier a company that is in a great deal of trouble. So you might decide that you would want to stop paying the money into Equitable, take perhaps whatever's there and redirect the money into something

DUGGLEBY: But you may not be able to do that if it's policies written in trust for children?

DAVIDSON: Are they written in trust Dorothy?

DOROTHY: No they're still for me. Unfortunately this makes it difficult. If they'd been actually for me I could have got out without I believe without - because they're in their name, it makes a difference if I get out.

DUGGLEBY: You've got - well you've got as Amanda said she's given you the alternative saying write to the Equitable and find out what would happen if you make them fully paid up - there is the alternative then of attempting to cash the policies in Alan but that's a bit of a desperate situation?

WARNER: It is rather yes. I think that the idea of making them paid up - that's to say leaving the policy in place but paying no further premiums - I think that's the better option. Ask Equitable for figures - there'll be a reduced sum assured - they'll scale down the bonuses declared to date but I do think that you have to think twice about paying further money into this.

DUGGLEBY: Yeah because I mean it's pointless carrying on paying money into a company which may not perform at all over the next years. Much better to start off a fresh policy with another company?

WARNER: I think that's right.

DUGGLEBY: Okay thanks for that call.

DOROTHY: Thank you very much

DUGGLEBY: Okay, and Philip now in County Tyrone.

PHILIP: Good afternoon

DUGGLEBY: Good afternoon

PHILIP: We are pensioners and are rather concerned about the best place for our money. My wife has a large portfolio in the stock exchange because at one time it was worthwhile her holding that because of the tax allowances. This government has removed that and we're wondering now how we can get the best for our money. We're thinking of moving �25,000 or so possibly into a with profits bond, but I am more inclined to go for a building society?

DUGGLEBY: Well let's just clear up the tax point. What you appear to be saying is that your wife was able to claim the tax back before which of course you can no longer do. Have you got any ISAs though?

PHILIP: We have the full amount

DUGGLEBY: Cos they are still able to get back at least the 10%. You want to move into something else

PHILIP: The portfolio's only realising about 3%

DUGGLEBY: Okay, so we're looking at yield grounds well Alan?

WARNER: Well Philip are you looking for income or growth?

PHILIP: Income mainly at the moment

WARNER: Income mainly at the moment. Well, if you're wishing to reduce your risk profile as it were to take a more conservative approach to investment then I wonder whether you should be looking at corporate bonds - to say fixed interest securities issued by large corporations. Now you could either invest directly if you're investing in larger sums - well certainly with �25,000 you could, and you could invest in the paper as you buy big companies like National Grid and Tescos - that sort of thing. Alternatively you could go via a corporate bond fund - a unit trust that is. Typically yields will be 5% - you can get nearer 6%. There are lots of names to look for there: Aberdeen, Henderson, HSBC, Threadneedle. They all have good fixed interest funds. A much more cautious way of investing than investing in the stock market.

DUGGLEBY: Let's get clear with that. Now leaving aside from the ISAs. If your wife needs to reclaim the tax because she's a non tax payer

PHILIP: Well she's got a fair amount of claims

DUGGLEBY: Yeah well she can do it - the thing is Amanda with a corporate bond you can claim back the full tax deducted because it's a bond and not a share?

DAVIDSON: That's right it's slightly different so in fact your tax advantages are actually greater from corporate bond than they are - you're absolutely right on dividends from a share. One note of caution though I'd say Philip - some additional information as well is that the markets are quite low at the moment so if you move it away from stock market into something else you might miss an up turn and you might regret that say in 12 months time so perhaps maybe you need to hang fire for a moment. Also, in addition to corporate bonds if you wanted something with lower volatility we talked about property a little bit earlier but property funds offer lower volatility and you might want to diversify into those.

DUGGLEBY: But if you do want to take the money across then go for something which is relatively high yielding and then you will get the full gross yield as long as your wife has unused tax allowances and I get the impression that's what you're trying to do. You're trying to - yeah so I think that's one of the key things that is worth doing and I think the fact the market's low possibly doesn't really affect that because you'll want to generate the income within this tax year, and that will affect your decision. But by and large as we say the stock market is low and if you're moving money out of an existing portfolio do just watch capital gains tax. You may not be liable to it but although the market's slow there's still quite big gains locked up.

DAVIDSON: Well yes especially if you've had the shares for a long time it might well be there.

DUGGLEBY: So just check - take your �7,200 full allowance but don't go beyond that

DAVIDSON: Seven and a half, but you can also move from one spouse to another so you can use both allowances so just be careful on the gifts.

DUGGLEBY: Okay Irene in Maidstone you're next:

IRENE: Oh yes good afternoon. I have �1,000 to invest for each of my five grandchildren ages 6 months to 7 years - obviously for fairly long term. Where would be the best place for me to invest this money please?

DUGGLEBY: Yes this is the nest egg that you're hoping perhaps will help them through university?

IRENE: Yes, yes that's the idea yes.

DUGGLEBY: I think a fairly common question for both of you Alan and Amanda - who's going to go first?

DAVIDSON: Right. Well Irene you've got a long time - which is great and I think it's a lovely thing to do for your grandchildren. I would be investing in stock market investments over that period of time because even with a 7 year old you've got over 10 years before they're likely to need it. And you need to pick perhaps an investment with low volatility UK based or possibly a bit in Europe depending on how you want to diversify, but unit trusts - you want collective investments to spread the investments and you can nominate your grandchildren so that you use their tax allowances which could be useful if they do really well.

DUGGLEBY: Okay let's have some names - I mean presumably you'd stick with a UK fund probably or a world fund? What are your favourites at the moment?

DAVIDSON: If you want a low volatility one then the Barclays Global has got a low volatility and a reasonable track record. Other than that you could go for - if you wanted something perhaps elsewhere we could talk about the trackers that we talked about earlier - mentioned L & G for a tracker fund in the UK. If you want to go to Europe then places like Fidelity have got 2 good European funds - Gartmore's also got good European fund as well.

DUGGLEBY: I mean far be it from me to suggest that you - you spread the money around because obviously you may want to treat them equally but I would be tempted Alan to take the �5,000 and actually diversify it and then sort of give each grandchild a share in the portfolio wouldn't you?

WARNER: I think that's probably a really good idea - yes have one account for all grandchildren. The only thing I'd add to what Amanda said is perhaps consider some investment trusts as well - some of the old established giants like Alliance, Foreign & Colonial, British Empire Securities - very very big funds with sound long term track records.

DUGGLEBY: But if you had a portfolio of �5,000 - you could put �1,000 into each but give them 1/5th interest in it if you see what I mean.

IRENE: Ah so they're all named? - they're all named on the portfolio?

DUGGLEBY: Yes they're all named within it - yes I mean you can sort of set it up in the form of - what's called a bare trust which a solicitor can probably just draw up a very simple deed and somebody will then look after the money, be it you or parents or whatever it is. The fact that it comes from you as the grandparent makes it tax efficient but and there may well be if you perhaps put some money into interest bearing - you know put �1,000 and just earning good interest then of course you can get some tax back on it.

IRENE: Right, that's very interesting

DUGGLEBY: But pick a big investment trust or look in the papers again for the best performing unit trusts in their field be it UK growth and income or whatever and good luck to you and I'm sure they'll benefit greatly. And Colin in Oxford now:

COLIN: Hello thank you. I've got �20,000 to invest which I had been intending to use towards paying off the capital on a mortgage. I've got a �30,000 interest only mortgage and my plan had been actually to try and use the �20,000 in order to generate more than the �30,000 as it were

DUGGLEBY: Stop there because that is again an absolutely classic question. Alan? I've got �20,000 - do I pay the mortgage off or can I do better?

WARNER: We need to ask what interest are you paying on your mortgage to begin with?

COLIN: I'm paying relatively low interest - round about 5%. I've got a special deal but that will evaporate in about a year's time.

WARNER: And if you were to pay it off sooner than that there would be a penalty doing so?

COLIN: No I've actually set the mortgage up so that I could pay it off bit by bit

WARNER: So no penalty, right so as we stand today you're paying 5% - the issue is can you invest your capital to produce a higher after tax return than 5%? In a risk free investment really the answer's no, so the question to ask yourself is do you wish to take a risk - if you're investing in the stock market you must add a so called risk premium say 3 or 4% - so do you think you can get a total return of 8 or 9% from the stock market? I think if you do and you're happy with taking the risk fine invest in the stock market for the long term. My personal advice would be use at least some of the money to pay off the mortgage.

DUGGLEBY: What about you Amanda?

DAVIDSON: Oh Colin I'm a great sitting on the fence person. I think I'd probably use half of it to pay off the mortgage and put half into the stock market and that way you've got to be right with one half of it.

DUGGLEBY: What I would do throwing in my pennyworth is pay off the mortgage but that will save you interest okay? - then you set aside all the interest that you would otherwise be paying on a mortgage - that's the 5% on the �20,000 okay? - and then set up a regular savings plan with one of the big investment trust companies and then put that money in every month - don't spend it. Invest it and at the end of the time you'll have what's called - had what's called pound cost averaging - in other words you won't have put all the money in the market in one go as you would do if you invested that �20,000. You'll be putting in monthly payments and I think you might find you'll come out quite well.

COLIN: Mmm right. Can I ask - make a supplementary point please?

DUGGLEBY: Well I've got another couple of calls coming up - very quickly if you want to make it?

COLIN: Well one thing that's made me stop and think has been - has been that various people have actually been predicting that long term the stock market may well actually continue to have a relatively poor performance. I read you know - one of the gurus (talking over)

DUGGLEBY: Yeah that's Warren Buffet - yeah Warren Buffet - (talking over) he said that - do we agree Alan?

WARNER: Well I have to say I think returns will be lower and I'd veer on the side of paying off more of the mortgage.

DUGGLEBY: Amanda are you gloomy?

DAVIDSON: No I'm not - I'm more optimistic about the long term performance of the stock market, but half and half and paying off bits of the mortgage and investing the rest would be a good idea I think.

DUGGLEBY: Alright. Let's see what we can do for Jill in Huntingdon?

JILL: Good afternoon.

DUGGLEBY: Good afternoon.

JILL: I have an ISA - it's a Fidelity managed international fund. I purchased it a year ago - I put a full �6,000 in but today it's only worth �4,500. I fully appreciate that the stock market does go up and down but I'd like to know the panel's opinion as to what stop loss to set or should I continue to keep the holding so that the money hopefully will not be required for many years?

DUGGLEBY: I'd say that fund was probably performed broadly in line with the international averages Alan, so it's neither - no better and no worse than?

WARNER: I think long term it's been a very good performer. I think what's happened here is that Jill has invested at an unfortunate moment when the market was high and so she's lost 25% of her money. My advice Jill if you don't need the money - stay with it. Fidelity have a very good track record.

DAVIDSON: I absolutely agree with that. It's had an extraordinary good track record over the long term and your timing's just been unfortunate - stick with it.

DUGGLEBY: And don't sort of feel that you should not perhaps commit a bit more money - if you've got some money this year to invest but I wouldn't put it in the same fund again - try and diversify a bit.

JILL: Right thank you very much.

DUGGLEBY: Okay, well we've just about run out of time, but what's your feeling Alan about the - the timing of the stock market for the next few months? - I mean if people are saying should I go in now or wait perhaps until the end of the year - what's your feeling about the next 2 or 3 months?

WARNER: I'd be inclined to hold back. I think there's probably more bad news before there's good news. I think the stock market will discount the recovery but I feel a recovery is still 12 to 18 months away.

DUGGLEBY: Amanda, still caution for you?

DAVIDSON: Yes I think if I was putting money into the stock market now I'd probably put some now and some later just as again we were talking about pound cost averaging but I think 2002 hopefully should be better than this year. It's been a very difficult year.

DUGGLEBY: Yeah but I mean to say we're starting from 20% below the high so at least you know if it's going to go down it's not likely to go down too much more. Okay, well that's very useful and we've run out of time, but thanks to Amanda Davidson from Holden Meehan and Alan Warner from Douglas Deakin Young. You can log into our website: bbc.co.uk/moneybox - that's forward slash moneybox - or call the information line 0800 044 044 if you'd like more details about anything you've heard on our recent programmes including a transcript of Inside Money on Equitable Life. Don't miss MONEY BOX at noon on Saturday with Paul Lewis. I'll be back same time next Monday afternoon to take more of your calls on MONEY BOX LIVE.

BACK ANNO: That was Vincent Duggleby and the producer was Chris A'Court.