What the meltdown means to you
Updated on 22 January 2008
As the turbulence continues in London, what does that mean for people who have their money in the markets or who buy shares?
The FTSE is down five points after those steep falls and rises but the advice to consumers is don't panic and hold your nerve.
Financial advisors are advising people to expect turbulent stock markets for the next few months.
Investment in the stock market should be seen as long term, as long term the market will recover.
If you panic in the short term and take money out, you will definitely lose out.
Let's take a simple investment, like a £3,000 tax free mini shares ISA, which tracks the FTSE 100.
As the FTSE 100 was at its lowest point today, down 13 per cent, someone with this ISA lost £390.
You might feel tempted to sell, but don't sell now because "the horse has bolted".
There are a lot of people who have money in the stock market via pensions. Price Waterhouse Coopers says over £15bn was wiped off the value of pension funds.
If you have a final salary pension, it won't really affect you. But if you have a company private pension then you are more affected by how the stock market is performing. But it's performance long term that counts.
If you are investing now hedge funds are a safe bet. Some are guaranteed not to lose money.
The price of property funds is falling and many funds are suspended.
With regards to shares, if you buy now you will make a killing when prices rise.
