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Independent View

The last-minute rush to subscribe for an Isa has come and gone and


hopefully we can all breathe a little more easily and plan our work


accordingly.


Despite their complexities, Isas have been a success. This has been


fuelled partly by the desire of investors to get into technology funds.


But there is no doubt that Isas are complicated. It will be interesting to


see how many people have taken out both maxi and mini Isas during the tax


year when the year-end statistics are revealed. I suspect that the


Chancellor may then consider giving an amnesty to such investors. More


important, I hope he will listen to the industry and simplify Isas by


giving us just one arrangement to invest in next year.


It is inevitable that commentators have started questioning whether


investors should be buying technology. I have to say I was slightly alarmed


to read such an article from an IFA the other day.


Whereas I agree with saying you should sell to your client what they need,


not necessarily what they want, sometimes these are one and the same. It


may be right to be looking at value stocks now as opposed to high-flying


technology stocks but I wonder how many IFAs were recommending technology


funds to their clients two years ago when bond funds and trackers were all


the rage?


Many people have recently invested in technology funds for the first time


and who is to say that this is the wrong thing to do? Technology is here to


stay and improve. Businesses and individuals will be looking at ways of


making life easier, more economical and efficient.


The internet, as well as various software and hardware developments, will


be fuelling this. Investing in companies which specialise in these sectors


will provide some losers but without doubt there will be some huge winners.


Any investor who does not have technology in their portfolio should


certainly look to correct this position as they may well regret it in the


future.


You cannot afford to get carried away with technology but you certainly


cannot afford to ignore it either.


It is unfortunate that the current technology bubble appears to have burst


and prices are very volatile as I write. Having said this, it is not


unexpected and clients should be reminded of the old adage that, although


timing of investment is important, it is the time that you hold it for


which is more important.


No one should have invested for the next five months but the next five


years and clients must be reminded of this fact if they start to moan about


the short-term volatility and perhaps the fall in their unit prices.


Technology is a wonderful thing, as the Stock Exchange discovered on April


5. I find it incredulous after all the prompting, pestering and persistent


reminders we received from the FSA about potential 2000 problems that an


institution such as the London Stock Exchange should not have adequate


back-up procedures.


Why was there nothing in place within the Stock Exchange which would allow


some form of manual procedures to kick in? It always used to run on people


talking to one another to place deals. Are we now too advanced to talk,


agree and then write things down?


Unit trust dealing has always been manual, or should I say archaic. I


therefore welcome the advent of EMX as long overdue and something which all


IFAs should look to support. It is far from the finished article but


anything which makes the placing of a deal and the receiving of the


resulting documentation quicker and less prone to human error has to be


encouraged.


Despite the problems incurred by the Stock Exchange, the sooner we can all


deal in unit trusts or Oeics in the same way as we do with stocks and


shares the better.

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