Stick, Twist or Split?

26/09/2017

When an investment is underperforming it is psychologically difficult to take the right course of action. This can be compounded by penalties levied by product providers and potentially paying fees on any new investment you make. So what should you do? This post will help you arrive at the right decision…

  1. Is the problem the investment fund or the investment product? It may be possible to change the fund without changing the product. This may save you any redemption charges which you would incur by cashing in the investment product.
  2. What will it cost to take the money out of the investment? Whilst hard to swallow initially,  paying to get out of a poor product can potentially be beneficial. This is provided the charges on any new investment are lower than the old product with similar investment options and you remain invested long enough to recover the exit and re-investment costs. Special attention should be given to redemption charges on the new product as you do not want to be in the same position in a few years’ time only to repeat cost of leaving an investment.
  3. Investments are long term. Has an event recently occurred either in your life or within the investment market which has made you re-examine your commitment to this investment? If so, you should seek advice from your broker or other qualified professional on the appropriate course of action.

Please note personal circumstances change and therefore what may have been appropriate for you when you made the investment may no longer be the case. Therefore this post is not making any judgements on the advice [if any] which was received when the investment was made.

As expatriates few of us have the luxury of knowing when we will leave UAE. Therefore you should only invest in products which have low or better no redemption penalties.

If you have any questions, comments or concerns please let me know.