View more on these topics

Popplewell picks price principle

Financial planning expert Keith Popplewell has shown how regular investments on falling unit prices can beat pound cost averaging.

He has shown how investors can reinvest cash into a vehicle with a falling unit price that will reduce the price level that the unit needs to rise for the investor to make a profit.

Popplewell believes the principle which highlights how pound cost averaging, which dictates that, over time, highly volatile movements in unit prices benefit an investor, only applies for one year.

He asserts that by averaging down, where the average cost of the unit holding can be lowered by regular further investments, the investor can make greater gains. For example, an investor buys 1,000 units at £1 a unit. The unit price falls to 40p. If, at each 10p fall the investor buys £1,000 of units, the unit price only needs to rise to 64p for the investor to make a profit.

Popplewell says: “The theory then suggests that, this average price having fallen, the unit trust does not need to recover its original level for the investor to make a profit. It is worth stressing that few advisers would be inclined to use such a strategy but I am aware of advisers who regularly recommend clients make further investments into a falling fund on the basis of what goes down must come back up.”

•Popplewell, p48


New Star select opps opens again

Access to the New Star Select Opportunities Fund has been reopened through fund supermarket Fidelity FundsNetwork. The Select Opportunities Fund, which is managed by AA-rated manager Patrick Evershed, closed to new inflows shortly after its launch in June 2002. Evershed believes that there is improved value among many of his target stocks and for this […]

Woolwich Plan Managers – G+ Account – Issue 2

Type: Guaranteed equity bond Aim: Growth linked to the performance of the FTSE 100 index Minimum-maximum investment: £5,000-no maximum Term: Six years Return: The greater of 26% of original investment or 55% growth in the index at end of term Guarantee: Original capital returned in full along with 26% growth regardless of performance of index […]

Old Mutual offers sophisticated return

OLD MUTUAL ASSET MANAGEMENT Old Mutual Global Dynamic Fund Type: Oeic fund of funds Aim: Growth by investing in a portfolio of Old Mutual unit trusts and hedge funds, and externally managed property funds Minimum investment: euros 125,000 Investment split: 40% equity unit trusts, 6% bond unit trusts, 40% alternative strategies, 14% cash Place of […]

Tories three-year plan for LTC

The Conservative party is issuing a long term care proposal where people who take out an insurance plan meeting the cost of three-years&#39 LTC would be guaranteed free care by the Government beyond those three years, regardless of assets. Michael Howard pledged the three-year scheme at a Conservative Party Older People&#39s Summit in Westminster on […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm