Some advice needed on a big loss



I agree, If OP was given all advice, then broker could only be accused of being a moron.

Anyone investing in property in Mid 2007 ....
 

its important to learn from mistakes, and this is where hindsight can be useful.

Looks like regulators got it wrong,
despite knowing the property sector was in a potential state of flux,
to lose so much so fast on a fund is more like a speculative gamble
rather than a medium/long term investment.

I dont think the broker can really be trusted - my own view,
but, like so many other posters say, we need OP to give more details
and MAYBE say if they knew it was so risky - its hard to admit one's mistakes.

What emotions drove OP decision at the time,
would OP be considered "novice level" and did the broker manipulate them?

JR.
 
zoe-90...i may be wrong but i get the impression that 'you' bought an investment and now that investment is showing a 'paper' loss.

now perhaps you want to blame somebody else rather than blame yourself? you signed the dotted line after all.
 
- Its a geared fund so if you think the property market will get worse then get out - the worse it gets its multiplied by x for you. If you think things will improve then stick with it but you will have to give it at least its five year term. Its only you can decide what to do. NO ONE CAN FORESEE OR PREDICT THE FUTURE!

- I'm in the same boat i've lost 40% on Bank shares. I'm going to stick with it and ride the storm and hopefully in say seven years time or so things will have turned around. I knew the risk when i started this investment - that it could could go up or down..

 
Surely given the speculative nature of this fund the advice to the op should be to stick with it.

Aquisition costs and planning applications etc all have a dramatic frontloading effect on such a fund, however a grant of planning down the line can have an equally dramatic effect on the valuation.

If this thread highlights anything it is the wisdom of hefty min.investment amounts of 50-100k for most similar products.(more thought going in and less chance of early redemption later)
 
Dogsbody said:
If this thread highlights anything it is the wisdom of hefty min.investment amounts of 50-100k for most similar products.(more thought going in and less chance of early redemption later)
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I don't understand this point? Surely such minimum amounts might just encourage some people to stick their total life savings into such investments?
 
Possibly true Clubman, but in general I think such limits help to avoid widow and orphan territory.However I take your point.
 
ClubMan said:
I don't understand this point? Surely such minimum amounts might just encourage some people to stick their total life savings into such investments?
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Most geared investments have a much higher min unit price than 20k, more often 100k plus. This keeps the small investors out of that marked. Also they tend to be sold directly to those in the know (the financial Elite), rather than advertised to the mass market. If you google the Friends First investment's name you will find a Presentation (PDF) of how their geared investment work and the multiplying effect of the gearing, it even has a graph of the gearing if the value of the investment goes negative territory. Here is the link : http://www.lia.ie/u_documents/doc_28_2.pdf

Sorry just had another look:
No graph, but page 19 shows the result of a 10% drop in value.
Page 38 to 40 while I have not read them in detail, seems to say that the investment will go negative in the first year due to the high start up costs.
 
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JR Rizzo said:
Looks like regulators got it wrong,
despite knowing the property sector was in a potential state of flux,
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What has the regulator got to do with this?

Surely you're not suggesting that the Financial Regulator should make judgements about whether or not it thinks an investment product is likely to go up or down?

It's a very volatile time on equity markets at present. Should the Financial Regulator ban all Managed Funds and Equity Funds because they invest in equities and they too might or might not go down in value over the next few months?
 
LDFerguson said:
What has the regulator got to do with this?

Surely you're not suggesting that the Financial Regulator should make judgements about whether or not it thinks an investment product is likely to go up or down?
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Regulator needs to do more,
sure we were in the middle of boom time and not many were complaining
but when things turn bad, like now, you get alot of people licking wounds,
and complaining - alot of the time its their own fault.

Its upto the consumer to educate themself, only they can do it
but, like dealing with a dodgy car salesman, a broker may try nudge buyer
into something that may contain more risk than the marketing information
says.

Example of posible new regulation :-consumer to have to fill out a
checklist form stating they understand various risks and rules,
and also have the broker sign saying they have BY LAW explained
each checklist item honestly,
dont just sign the form blindly under the broker's advice.

JR.
 
JR Rizzo said:
Regulator needs to do more,
sure we were in the middle of boom time and not many were complaining
but when things turn bad, like now, you get alot of people licking wounds,
and complaining - alot of the time its their own fault.

JR.
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i couldnt agree more. people always find it very hard to admit it their own fault. Its very easy to blame somebody else.

something tells me if the regulator brought in check lists like you mention, people still would check all the boxes and not read whats beside them.
 
Reminds me of the Eircom shares which were only ever going to go up.
 
LDFerguson said:
Can you predict with certainty that this product will not recover and provide a decent return over the medium to long-term?
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Without input from OP , this conversation is dead.

If she was advised long term, the timing of the purchase was wrong, as it is on its way down in a big way and has further to go.

She has lost 45% already, has to make 80% to get back to original value ...
 
crumdub12 said:
If she was advised long term, the timing of the purchase was wrong, as it is on its way down in a big way and has further to go.
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So a broker's job is to time the market, is it?

I agree - as the original poster hasn't responded, the thread is pretty much dead.
 
Hi Guys


Sorry for the delay in getting back have been very busy so thanks for all your replies will try and answer all your questions...


ClubMan said:
Why did you/your broker consider this investment (the most?) suitable for your particular needs at the time?
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Hi ClubMan my broker who l have known for the past ten years advised me tho invest in this because he thought it was a very good investment at the time and he told me that my capital was
guaranteed! and also that because it was being invested in lrish property in his opinion it would do very well over the 5 years.

To be honest l did not research fully about this fund and trusted him on the fact that my capital was guaranteed.




 
crumdub12 said:
Brokers have moral obligation to make money for clients, selling property last year means OP will not make money for a long time ....
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If you can find me a broker who can time the markets, give me his number and I'll sell everything I own to invest with him.

Brokers have a moral obligation to advise their customers on the most suitable investment for them, from the range available. Any broker who would claim to have an ability to time the market would be doing their client a disservice at best, or simply lying at worst.
 
Just read zoe's subsequent post. It seems the broker advised her that capital was guaranteed and didn't advise her that this was high risk. That's simply mis-selling. I'd make a formal written complaint to the broker requesting money back plus interest and if this doesn't work, submit a claim to the [broken link removed]. It will help if zoe has copies of relevant documentation, in particular the "reasons why" letter.
 
crumdub12 said:
Brokers have moral obligation to make money for clients, selling property last year means OP will not make money for a long time ....
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You do realise that investments can go up as well as down whether is is shares/property/equities/minerals and this has nothing whatsoever to do with a broker.
OP - were you told that the capital was guaranteed or did you get it in writing, what exactly did you get in writing? Also asking your broker lots of questions now seems just a tad late don't you think?
 
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