Should I cash in my unit trusts?

[kelfoan]

I have been paying into an investment programme for 19 years. I have just received my annual statement and its surrender value is �1k less than it was worth 12 months ago. Up until now it was growing at a steady 8%. Should I cut my losses and cash it in or should I hang on and hope it recovers. I know there is currently financial turmoil but wondered usually how long it takes for it to recover

[pug100]

First I am not a financial advisor you should discuss your specific requirements with an independent financial advisor before doing anything.

Unit trusts earn their income on the basis of the stock market. As you say the market has it's ups and downs currently due to the American financial market. A quick look at the Morningstar website shows exactly this, all units are affected some more thant others due to the way the funds are invested.

http://www.morningstar.co.uk/UK/fundquickrank/ default.aspx?pgid=hetabtools&lang=en-GB&gclid= CLHtlYzboJICFQGX1AodRi-_RA

If I was in your position I'd ask myself this, do I need the cash now or can I hang on till the market recovers ?
If the answer is no then take the losses and transfer the units in to cash.
If you can hang in there then do so, the market will no doubt rally at some time and will increase your investment.

Just look at Sept 2001 for a spectacular fall in investments, then a year later most of that loss had been recovered as many shrewd intestors actually bought as the market fell.

If you need further advice I would also seek out an idependent financial advisor who are trained to give unbiased advice such as this.

The Motley Fool is an excellent source for information and has it's own message boards too.

http://www.fool.co.uk/investments/investments. aspx