Share Prices Crash Below 2000 Levels!

The recent devastating fall in share prices has now taken the FTSE 100 index further below it's 2000 pricing of 10 years ago! For investors that's truly scary.

The narrow focus on shares by most 'traditional' investment vehicles such as pensions, unit trusts and other savings schemes has left most of the population incredible vulnerable to this appalling performance.

Let's take a closer look at what is happening and consider the options.

Firstly, here's the five year graph of performance. It's difficult to find any good news to discuss. The bottom line is that shares have been a rubbish investment - possible the WORST investment - for 10 years. And the recovery which most commentators have hailed as the 'new dawn' through late 2009 and early 2010 has been shown to be a complete sham.

In fact just a couple of weeks ago the index was hit by bad economic data (surely the market didn't expect 'good' data?) and the index fell a further 4.1% in just one week. This is a huge drop in a handful of trading days.

You might think that following this fall the market would be expecting a recovery. Far from it. More than 3.5% of the total value of companies in the index has been 'lent' to investors who are gambling that the index will fall further - known as 'short-selling' the index.

Angus Donaldson, a hedge fund manager at Clareville Capital, says: "My fear is that the FTSE 100 could fall another 600 points before it bottoms out. It's going to happen slowly and it's going to be a horrible time because so many investors piled back into the markets at the beginning of the year. We are very cautious and we are not getting sucked in by any little bounces."

Investors Have To Face Tough Facts

• Between 2000 and 2010 shares have lost 14% of their value.
• This places them LAST in performance from all major asset classes - worse than holding cash under your bed!
• The 'rebound' that many commentators suggested might happen has failed miserably and shares are now 17% below their earlier high in 2010.
• Many traders are preparing themselves for a further slide of up to 600 points, which would put share values some 27% lower than early 2010 and 20% lower than in 2000 - after 11 years a dismal failure to at least break even.

With the greatest respect I am really concerned about the future for any investors who are holding shares; but there is a tough choice to face.

Ask yourself a few key questions.

• "Are you prepared to leave your future to the vagaries of the stock market? "
• "Do you believe that your pension (primarily invested in shares) will deliver the returns you need in retirement?"
• "Do you still believe that an investment in shares is a 'safe' investment?"

For many years I have strongly believed that the focus of the financial services industry on shares has been misplaced and to the detriment of the average investor. Now, sadly, the evidence is there for all to see.

The big question is what to do instead and, as I have been a property investor since 1982, you already know what I'm going to say ... but look at the figures. Barclays Capital comparative table of asset growth from 2000 to 2010 shows property outclassing every other asset class if you include the benefits of leverage!

Perhaps we should be thankful that the financial services industry has, in my view, misdirected so much of investors' money into the stock market. Just imagine the enormous competition to purchase buy to let property if another 500,000 investors decided it was a good idea! Part of the reason that so much profit andso many great returns exist for property is there are still, surprisingly, a limited number of investors who see the benefits.

I believe there is a clear choice for investors who need to make up lost ground; who need to prepare for retirement; and who need to protect and grow their capital. Invest wisely in property and you can do all these things ... with low risk, high returns of capital and income, and within realistic timescales.

At Axis, our company is prepared and ready to make your property investment portfolio a reality. We understand the market; we bring you exceptional deals; we know how to structure your purchase for maximum profit; and we package all aspects of the purchase to make it quick and easy for you.

Don't wait. Don't let the debacle in share prices kill your financial security.

Take action now

• 1. Call us on 01273 447 300 and ask to talk to a Axis Portfolio Manager. Our team will listen carefully to understand your needs and your resources and work with you sympathetically to change the future outcome of your investment strategy in a positive way.
• 2. Download the Axis Investment Guide to UK Property. It explains how we work, why property investment can be low risk and high reward and much more.
• 3. Review our available property. Download some Decision Packs and you will see what's available today to transform your future. Review UK Investment Property here.

Finally, let us know what you think about the future for share prices and investment. Leave your comments below.

Live with Abundance,

Rod Thomas FCA

Posted in Finance & Money

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