Often it is a change in circumstances such as a marriage break-up illness or redundancy which triggers serious

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Published: July 27, 2010

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Often it is a change in circumstances, such as a marriage break-up, illness or redundancy, which triggers serious debt problems, counsellors say.”The first thing to do is try not to panic, and then look at the debts you have to pay and see which are the ones which will get you into most trouble,” says Donna Bradshaw of independent financial advisers Fiona Price & Partners.Prioritising is vital, agrees Damon Gibbons of the Money Advice Association, the professional association of money advice workers. Careful budgeting and making a real effort to cut spending for a few months takes discipline, but should ease the problem if Christmas spending is the main culprit (see box).But how do you know when things have gone too far? “As a rule of thumb, if you find your [debt] repayments – excluding mortgage payments – are more than 20 per cent of your net income, then you do have a problem,” says Ms Walker. “And we’re expecting it to be a bit worse this year because many people will have really pushed the boat out this time,” says spokeswoman Frances Walker.Anyone who is feeling the pinch should take action as soon as possible. If you think you spent too much on Christmas and New Year revelry, you’re not the only one. But for thousands of people already deep in debt, that seasonal shopping spree may turn out to be the straw that breaks the camel’s back.
Debt counsellors’ busiest months are January to March. This is when credit card bills for Christmas spending start coming in, closely followed by expensive winter heating bills and council tax bills.The Consumer Credit Counselling Service says it expects calls to its advice lines to increase by 30 per cent in January and February.

If you think you spent too much on Christmas and New Year revelry, you’re not the only one. But for thousands of people already deep in debt, that seasonal shopping spree may turn out to be the straw that breaks the camel’s back. The new kid on the block is much more experienced in life than we think.” Revealing himself as an unrepentant optimist of the markets, Mr Bond says: “The wheels aren’t coming off the hi- tech bandwagon – and they won’t in the future”.Britain’s intrepid army of new investors are about to find out whether Messrs Brown, Batstone and Bond are right.. Investors must be selective and discerning.”Terry Bond, an old hand in the markets who writes our “Diary of a Private Investor”(see page 5), is confident that the new army of punters are more than a match for the choppy waters ahead: “Britain’s private investors are acting like professionals – they’re buying on the dips.”Warming to his theme, Mr Bond says: “This new generation of investors has been well-schooled They know that shares go down as well as up Every advert says so.

Private investors are right to go for areas where value is being created, such as media and Internet stocks. They should avoid the dinosaurs: the general retailers, food retailers and producers.”Despite the fact that Mr Batsone is an unashamed bull of the tech stocks, he admits: “It will be a rollercoaster No one knows how to value these Internet companies. There will be winners and losers – in general, the hi-tech market will continue going upward.”Jeremy Batstone, head of research at NatWest Stockbrokers, is also worried that the bulletin boards may be encouraging a “casino mentality amongst inexperienced investors – which I find very, very concerning.”Mr Batsone adds: “I love the idea of wider share ownership, but I’m worried about unscrupulous people taking advantage of inexperienced investors.”So what does Mr Batstone anticipate for the markets this year? “A revolution is underway. He says this shows both the power of boards, and the danger of relying on them for a quick killing.Mr Brown is more scathing: “I’d advise people who have just bought a new personal computer to explore the huge amount of information available about companies on the web – but not on the bulletin boards.”Returning to whether you should hold on to your tech stocks, Mr Brown reckons that “the next six months will sort the sheep from the goats, as many of these companies will be reporting interim results. We invest in the companies that produce the tools which operate the Internet.

We try to avoid the e-retailers and dot coms.”Mr Brown admits this means he misses some of the spectacular gains that such stocks have made in recent months, but insists that his strategy will deliver more stable growth.One part of this “new world” that Mr Brown could do without (and this goes for a lot of established investment professionals) is Internet bulletin boards. These have sprung to fame as providing a free source of what appears to be inside information and stockmarket tips. Many tips on such sites have moved share prices in recent weeks.Andy Yates, whose company DigitalLook tracks share tips on bulletin boards, says: “On 4 January, shares in pharmaceutical group Peptide Therapeutics rose on Internet rumours that it was about to be aquired by biotech rival Oxford Biomedica – sending the shares up 20 per cent, or 11p, to 66p in matter of days.”Mr Yates adds that no deal has yet been announced and the shares have slipped back – but the rumours persist. He compares the dawn of the Internet age to the Klondike gold rush of the 19th century, saying that: “The people who sold the picks and shovels ended up making more money than the prospectors they sold them to.

Significantly, many of the biggest planned floats are in personal finance, such as iii. It seems more and more people want to increase control of their finances by using the web.Bill Brown, director of AIM equities at the AIM Trust, which holds shares in the Alternative Investment Market, says: “I certainly understand that we’re in a new world.”Mr Brown manages £43m of clients’ funds, invested in a host of young, hi-tech companies. The access to priveleged information enjoyed by the City slickers in the Square Mile is no longer the advantage it once was. Private investors connected to the Internet can now “mine” as much information about companies as the largest City institutions. The London Stock Exchange for example, has given up its monopoly of official company announcements, the Regulatory News Service.


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