Guessing the FTSE

We've got a new game in the Money Mail office. It's guessing what price the FTSE will be every hour.

It was only a couple of months ago that the FTSE 100 was nudging 6,000. At the time of writing it was at 5,688, and down more than 100 points today.

Last week the FTSE seemed to bounce daily between being 100 points down to 30 points up - in fact finishing the week marginally higher than it had started following its biggest fall in three years the previous Friday.

For many small private investors these daily fluctuations are a nightmare. Do you stay or do you go? Sadly, I don't have the answer to that. If I did I would be sitting on my own island in the Indian Ocean rather than here.

You may decide that you want to get out now - but here lies the problem. If you have cash in investment funds now doesn't mean now......it means tomorrow.

You would think that in this modern age of computerisation that funds would be able to take their price more than once a day - but no (apparently it costs too much). Sell your investments now and it is highly likely that the price you get will be the one at noon tomorrow.

If the market falls five per cent in the meantime, then tough luck, so does your investment.

James Coney, Money Mail

More 0% credit card confusion

Banks and building societies seem to be escalating the war on shrewd consumers who regularly switch credit cards to exploit 0% deals. They have a new weapon.

I have just received back a reply from Yorkshire Building Society. I applied as it had one of the best combos of interest-free credit (for six months) and cashback (up to 1% on spending). However, the pre-filled application form they sent back entirely ignores the 0% credit and the cashback scheme - no mention at all.

The customer service people at Co-op, the 'customer led, ethically guided bank' that runs the card for Yorkshire, say they have raised the issue with senior management as the special offers are not even written on the covering letter, leaving applicants confused.

The official line is that apparently it's a legal requirement under the new rules to only show the standard APR. Tosh - there's no requirement to strike special offers out of the wording on contract. If that is the case then Sainsbury's would be breaking the law as I've just had an application for them with the 12-month 0% offer written into the small-print. See the best 0% deals with our credit card finder.

Cynically, you could argue that not mentioning the 0% deal will mean a sharp fall-off of 'rate tarts' at the application stage. That should ensure Yorkshire and YBS filter out shrewd switchers and get the less astute consumers that are more profitable for them.

- Andrew Oxlade, Editor, This is Money

Useful links

- Do your own homework on the best credit cards

- Let us do the homework on credit cards for you

- Read stories and the latest advice and tips on credit cards and loans

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More 0% credit card confusion

Banks and building societies seem to be escalating the war on shrewd consumers who regularly switch credit cards to exploit 0% deals. They have a new weapon.

I have just received back a reply from Yorkshire Building Society. I applied as it had one of the best combos of interest-free credit (for six months) and cashback (up to 1% on spending). However, the pre-filled application form they sent back entirely ignores the 0% credit and the cashback scheme - no mention at all.

The customer service people at Co-op, the 'customer led, ethically guided bank' that runs the card for Yorkshire, say they have raised the issue with senior management as the special offers are not even written on the covering letter, leaving applicants confused.

The official line is that apparently it's a legal requirement under the new rules to only show the standard APR. Tosh - there's no requirement to strike special offers out of the wording on contract. If that is the case then Sainsbury's would be breaking the law as I've just had an application for them with the 12-month 0% offer written into the small-print. See the best 0% deals with our credit card finder.

Cynically, you could argue that not mentioning the 0% deal will mean a sharp fall-off of 'rate tarts' at the application stage. That should ensure Yorkshire and YBS filter out shrewd switchers and get the less astute consumers that are more profitable for them.

- Andrew Oxlade, Editor, This is Money

Useful links

- Do your own homework on the best credit cards

- Let us do the homework on credit cards for you

- Read stories and the latest advice and tips on credit cards and loans

- HOW TO POST A COMMENT

The car insurance price trick

I think I've worked out the car insurance industry (industry experts feel free to put me right)...

An insurer offers loss-leading rates for a short spell, sucks in a huge amount of new customers and then hikes the rate when the policy comes up for renewal.

For example, Tesco Personal Finance, a relative new-comer to car insurance charged us a bit over £400 last year on our Honda Civic - the cheapest quote available. This year, it's crept up to nearly £500.

A quick search on the insurance deal finder gave me dozens of cheaper quotes, the lowest was with Swiftcover at £340 which crept up to nearly £390 once I'd put in all the details in on their site (the aggregator tools don't always gather enough info to give the exact premium - and sometimes there's add-ons you might want to pay for).

My colleague  Simon Lambert also found Swiftcover was cheapest for his Fiat Punto.

Time for a little wager - what's the chances that Swiftcover isn't the cheapest next year?

- Andrew Oxlade, Editor, This is Money.co.uk

Useful links

>> Our advice on getting the cheapest car insurance

>> Your advice on getting the cheapest car insurance

History repeating?

The next time the FA attempts to find a new England manager, perhaps they should turn to Fidelity International. Unlike the FA's bungled appointment of Steven McClaren, blighted by leaks and agendas, Fidelity has steadfastly remained tight-lipped over who will take over one half of the legendary Anthony Bolton's Special Situations fund next year. 

Unlike the man himself. Bolton uncharacteristically told an audience of investing professionals at the Securities &  Investment Institute that the Footsie's strong run is coming to an end and there is likely to be a prolonged downturn.

Bolton isn't usually a man for brash statements or predictions, but he is confident enough that this bull has run out of legs. Investors' growing appetite for risk, the brittle global economy, expensive shares and even avian flu are signs that we are in for a downturn, he argued.

This should make worrying reading for those investors that have only just returned to equities in the current Isa season. According to the Investment Managers Association, equity Isa sales enjoyed their strongest year since 2002 – the period just before the FTSE 100 dropped 2,000 points.

It is one of the strange ironies of the stock market that private investors tend to buy shares when they are expensive and ignore them when they are cheap.

Equities were largely shunned when they hit a low of 3287 in March 2003, even though there were some fantastic bargains to be had. Yet, when shares are expensive and fund managers are complaining that it is difficult to find value, the average punter comes back into the market.

Whether Bolton's prediction is correct remains to be seen, but those recent returners to equities will be hoping history doesn't repeat itself.

Michael Clarke, This is Money

READER SERVICE: Share dealing

ADVICE & TIPS: Investing

The car insurance price trick

I think I've worked out the car insurance industry (industry experts feel free to put me right)...

An insurer offers loss-leading rates for a short spell, sucks in a huge amount of new customers and then hikes the rate when the policy comes up for renewal.

For example, Tesco Personal Finance, a relative new-comer to car insurance charged us a bit over £400 last year on our Honda Civic - the cheapest quote available. This year, it's crept up to nearly £500.

A quick search on the insurance deal finder gave me dozens of cheaper quotes, the lowest was with Swiftcover at £340 which crept up to nearly £390 once I'd put in all the details in on their site (the aggregator tools don't always gather enough info to give the exact premium - and sometimes there's add-ons you might want to pay for).

My colleague  Simon Lambert also found Swiftcover was cheapest for his Fiat Punto.

Time for a little wager - what's the chances that Swiftcover isn't the cheapest next year?

- Andrew Oxlade, Editor, This is Money.co.uk

Useful links

>> Our advice on getting the cheapest car insurance

>> Your advice on getting the cheapest car insurance

Barclaycard's bad deals

Here’s a potential reason why Barclays is suffering from bad debts – it offers its customers bad deals.

I have had a number of personally addressed, targeted letters from Barclaycard headlined Cash in just 4 working days. Barclaycard explains within that it can kindly lend me thousands of pounds and even tells me how ‘affordable your loan can be’.

A quote from the letter: ‘Your Barclaycard is great for everyday spending, but a personal loan could give you up to £25,000 of extra cash fast. And because you’re a Barclaycard customer, you’re eligible for our fast track application service. You can use your loan for almost anything. Paying off existing debts to free up your monthly budget? Fine! Got your eye on something special? Go for it!’

Guess what though? The loan isn’t affordable at all – it comes with a whopping 13.9% interest rate, on the £8,000 example used. This compares to Barclays’ personal loan rate of 6.7% for existing customers or 9.9% for new customers.

Using This is Money’s loans calculator shows that if you took out the Barclaycard £8,000 loan over five years, you would be £970 worse off than a new Barclays loan customer and a massive £1,708 worse off than an existing Barclays customer.

I am sure Barclaycard would argue that people can shop around and no-one forces them to take their loan, but they are promoting it as a way to ‘pay off existing debts’ and that is the opposite of responsible lending.

- Simon Lambert, This is Money

Useful links

Search for the best value personal loan

Find a 0% balance transfer card and avoid hefty charges

Advice, tips and the latest news on dealing with debt

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Stamp duty, the stupidest and unfairest tax around

When is the Government going to do something about stamp duty? Probably not while it continues to cash in to the tune of £1bn a month on the stupidest and unfairest tax around.

It baffles me as to how in this day and age it can be considered reasonable that a tax can be applied in such a painfully dumb fashion – on a home’s entire value once it crosses a threshold and paid by the buyer.

Buy a home for £125,000 and you pay no stamp duty, but a home for £125,001 and you pay 1% on the whole cost - £1,250. And the system becomes even unfairer at the £250,000 threshold, above which you pay 3%. This means a £250,000 home has stamp duty of £2,500, but a £250,001 home has an astronomical £7,500 levied.

You can do the sums with This is Money’s stamp duty calculator.

This is in direct contrast to what is considered a ‘sensible’ system of tax – the marginal style used by income tax where people pay tax in stepped bands on their whole income.

To compound the misery it is the buyer who has to pay what is essentially a tax on the money the seller has made on their home. This tax hurts first-time buyers and young families trying to climb the property ladder the most.

Mortgage lenders and the property industry have long campaigned for this to be overhauled, but it just gets worse and the Government doesn’t seem to care.

I hope one day they see sense.

- Simon Lambert, This is Money

Useful links

Buying and selling advice in our guides

Search for the best mortgage deal in moments

Read the latest property and mortgages news and features

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Finding a place to call home

WHAT is the most important factor when buying your first home?

A new survery from property management group Places for People, sugggests that it is affordability. Crime, local hospitals and schools were well down the list.

I bet this comes as a surprise to 'the powers that be', but for anyone trying to get their first foot on the ladder the grim reality of a housing market with sky-high prices is something they are all too well aware of.

Fantastically, the report which quizzed MPs found that only one-third of them thought that affordability was a factor and that low crime and schools were of almost equal importance.

Those on the housing ladder already seem to have very little grasp of how dire the situation is for those waiting to get on - unless of course they have kids of their own in exactly this situation.

Indeed, you only need to take a glance at the government's solution  to this affordability issue - by giving key workers and those on low incomes access to cheaper homes - to see that while this will help them, it will not address the problem of thousands of middle earners, the majority of the university leaving workforce who are not doctors or solicitors or policemen or nurses.

Quite simply these middle-earners are earning too much to get cheap housing, but not enough to stretch their budgets to buy everyday housing.

Meanwhile they have to stay renting until they are able to afford a deposit. But as house prices climb still higher, the goal of getting that five per cent deposit gets further away.

James Coney, Money Mail

Get half price train travel on South West Trains

If you live in the South, South West/East you and up to three other people can travel on the trains for half the price of a standard cheap-day return.

http://www.halfpricetraintickets.co.uk/

The offer covers journeys between London Waterloo as far as Reading, Portsmouth, Weymouth and Exeter. And if you're visiting London you can print out 2 for 1 offers for various attractions.

This offer ends on 11 June.

This is Money

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