Don't leave this company out of your choice list (Foreign & Colonial)

Member Name: Trishajs

Product:	Foreign & Colonial
Date:	05/07/09 (30 review reads)
Rating:

Advantages: Pound cost averaging for monthly investors

Disadvantages: stockmarkets do crash

Back in the dim and distance past when I realised that I had to do more about my retirement than dream about it- I looked for somewhere where someone with very small sums to invest could "have a go" and rather than dive into the stockmarket - tip my toe in at the shallow end.

I read reams of financial advice, most of which was not exactly easy to understand.

I ended up choosing Foreign and Colonial Investment trust- it had been around for a long time and had good record and importantly for me, I could pay into it monthly from, and in my case at £25 per month. I believe the starting point is now £50.

Now here comes the tricky bit- buying monthly gives you something called pound cost averaging - for example if the cost of buying shares in F & C was £2.00 per share and you invested £600 in a lump sum you would have 300 shares - but if you invested that £600 at £50 month and the average cost that year was £1.95 then you would have 307 shares and some change in the kitty. It gets confusing- but suffice to say this method of drip feeding money into the shares is well thought of by those in the know.

I have done ok out of my investment and because of the aforementioned pound cost averaging I did not get depressed when prices fell, as it just meant I was getting more shares for my money in readiness for the recovery. I consider I have done the sensible thing at this stage in my life, by always opting to reinvest my dividends rather than take the twice yearly income.

Obviously just £25 a month was only going to keep me in hot air pie and windy pudding in retirement so in time I chose other investments elsewhere- not keeping all my eggs in one basket as it were.

All bar one, that I am tied into till next year- I have stopped for the security of cash investment in this troubled time in the stockmarket. I have left any balances invested in the hope of a stockmarket recovery- I read that only fools get out of the market when it is at the bottom!!

But Foreign and Colonial is still getting my £25 a month and I intend it will until my 60th birthday- when I will review my options. I just feel very good about it and over the years it has done me ok.

There is no way I can make any decisions on finance for you- but if you are looking to invest I will say do not leave this company out of your " to be considered" list.

Summary: Stockmarket investment for us normal folk