How do I decide when to sell my investments?

I ,like most of the commentators and fund managers, thought that we had a bit of "traction" and the markets were turning around in the last couple of months - I certainly didn't expect the FTSE100 to fall below 4000, never mind 3500 points. This was why I have been relatively stoical and, knowing that our clients had the right long term asset allocation and the right fund managers looking after the stock selection, I had hoped for some decent returns towards the end of 2009 and no further slippage.

Reading the comments again over the last few days, there is some talk of the FTSE100 dropping to the same level even as post 9/11 (i.e around 3200 points), before recovery.

My advice to clients is to again consider four options:

• Increase your investments to maximise the value when the recovery happens
• Leave your existing funds fully invested in the markets and benefit from any recovery on that part of your portfolio
• Liquidate your assets and crystallise your losses - hold your money in cash but expect no future gains (inflation rate = interest rate)
• Remain invested, but buy some protection against further falls in the market (such as absolute return funds, guaranteed equity funds, etc) and benefit from part of any recovery, but hedge against further market decline.

Clients will make different decisions, depending on their attitude to investment risk, the time frames involved, whether they are not dependant, wholly dependant or only partially dependant on the income from these funds, their own perception of the direction in which the markets are headed, etc etc.

Now is the time to arrange a meeting with your adviser and decide which course of action is right for you.