Stock-markets are a long-term commitment

But boyfriend and gold-digger is short term

TALKING to financial advisers in recent months, one issue has come up repeatedly. Put simply, the crisis of confidence in financial markets has proved again that too many people put their money on the line in the stock-market without understanding that if there's one over-riding principle in equity-based investing, it is that you need to stick around to make it worth your while.

But advisers spend a lot of time explaining to investors that, unless you're skilled and experienced enough to make short-term bets, there's little point risking your money unless you leave it there for the long term.

Sales of collective investments have plummeted over the past nine months, but, despite some volatile periods, world shares are down just 2 per cent or so this year.

There's no question that investing in the stock-market is risky and if the prospect of seeing the value of your investments take a battering every now and again keeps you awake at night, you are probably best out.

However, if you know there is a risk attached but still choose to get some of the action for yourself, the worst thing you can do is cash your chips at the first sign of bad news.

This is illustrated by research from brokers and financial advisers Edward Jones, showing that while the FTSE All-Share had some big one-day declines in the first three months of 2008, there were three days when the increases in the index were among the 50 best days since December 1968.

Of course, there will likely be sharper and more sustained falls as the year unfolds.

But if you're thinking of jumping out when the boat starts rocking, there are two key things – among others – to bear in mind.

Diversification reduces the risk you take on, so make sure your investments are spread across a range of low-correlation assets.

And secondly, over the long term, stock-markets tend to go up more than down.

According to Fidelity, a £1,000 investment in the UK stock market in June 1992 would have been worth £4,612 by the end of June last year. Take the best 40 days performance out of that, however, and the investment would be worth just £1,304.

AFTER the government took a battering at the local elections in England and Wales last week, consensus suggested the scrapping of the 10p level of income tax was a key factor. Gordon Brown, the Prime Minister has since admitted that the plans failed to sufficiently cover those who would incur losses as a result of the change.

And as our story on the facing page reveals, the government this week admitted that flaws in the pension system meant thousands of women were missing out on the full state pension, a year after insisting there were no such glitches.

With personal finance issues central to a lack of confidence in the Brown administration, can we now expect more admissions of error? It could be a long list...

AMID all that has happened this week, Scottish Widows still found time to put out a press release introducing us to the BAG – "boyfriend and gold-digger".

Apparently almost twice as many men as women would now consider marrying someone purely for money and a luxurious lifestyle. The moral of the story was that men would have to save more to avoid having to resort to such tactics.

Is it just me, or is that missing the point completely?