Starters' orders

You want to invest your money - but where should you begin to look for advice? Steer clear of IFAs, spouses and fathers, says Lloyd Shepherd, and listen to your hypochondria: fear is good, especially if it stops you buying at the top of the market and selling at the bottom

The worst piece of advice I ever received was from a barber, the weekend before my wedding. The results are clear to see on my mother's mantelpiece, should you ever decide to pop round. The second-worst piece of advice I ever received was to invest in equity-based investment funds in December 1999.

Do you remember December 1999? The FTSE-100 stood comfortably north of 6000, and was just toying with the idea of hitting 7000. The Millennium Dome hadn't opened yet. Manchester United were European champions. The world, in other words, was a wonderful place in which to be, unless you were an Arsenal fan.

Compare that halcyon time with today's gloom. The dome is about to be converted into the world's largest something-or-other, Arsenal are Premiership champions and, at the time of writing, the FTSE-100 is furiously treading water just north of 4000.

In other words, the dear old FTSE has lost a third of its value since I plonked my money down and bought a tracker fund Isa and an investment bond. I did this because I had come into a bit of money and I didn't have any equity-based investments of any kind, and this had become a bit of an embarrassment at dinner parties, when stories of zillion percent growth in technology funds were flying back and forth over the latest Nigel Slater recipe. But I wasn't going into this investment thing half-cocked - I'm too much of a hypochondriac for that. I did the right thing. I got some advice.

The source of this advice was an IFA, as in "independent financial adviser." This IFA was called Rob, and I'd had dealings with him before when setting up a private pension plan at a previous job. Rob knew his stuff, was clear and efficient, and the pension he'd sold me was doing staggeringly well (at a time when everything was doing staggeringly well, but never mind).

Looking back on it, the advice Rob gave me was pretty good, given the task I'd set him - to get me into equities. He spread my money around between Europe, the US and the far east, and even advised me to keep away from technology funds at a time when technology funds were hotter than the number one record in Hell's Hot 100. The investment bond he recommended seemed fiercely complicated in its tax implications, and the fact that I didn't (and don't) really understand it merely underlined how incredibly clever Rob was. All well and good.

Except for one thing. The advice I actually needed to receive was this: "The stock market's been on an insane bull run for two years now. It can't possibly continue. Don't be a greedy pratt and try and get in at the tail end of it. Stick your money in a deposit account and wait for the thing to collapse, then waltz in and pick up a bunch of blue chips for less money than a bag of chips on Blackpool's Golden Mile."

Basically, I'd asked the wrong question. Instead of saying "what should I do with this money, to ensure some above-inflation growth while protecting my capital from sudden collapses in equity prices", I actually asked "get me into equities now, because I want to be rich by Thursday." To paraphrase Gordon Gekko: Greed is bad. Greed doesn't work.

Of course, the chances of being told "actually, don't invest in equities or even equity-related funds, because they're as dangerous as Tory-voting tiger sharks" are virtually zero, because everyone's got to make a living, and to make a living they need to sell you something. IFAs are "independent" in the way that a car dealer is independent; they don't care what you buy, as long as you buy something. This is because they are on commission. If you know you want to buy something, then they'll help you find the best thing to buy. But they're unlikely to sigh, close their books, look you in the eye and say "I'm sorry, you really shouldn't be investing anything, you know".

The same goes for banks and stockbrokers. They want you to use their services. They don't want you to sit at dinner parties saying "You know NatWest? They actually told me to keep my money, and they were only bloody well right! Isn't that fantastic?"

Investment professionals, then, are not a great source of copper-bottomed advice, and this is ironic, because thanks to the financial services authority, investment professionals are just about the only people allowed to give you advice. For a while, the internet looked like it might be a promising replacement - an open environment where individuals could swap share tips and keep an eye out for each other. Unfortunately, it failed to deliver, because most of the people swapping share tips were doing so from the safety of their own padded cell, while the people who actually knew what they were talking about weren't allowed to tell you because of regulations designed to protect the investor from unscrupulous selling - ie, people aren't allowed to give you investment advice over the internet unless they're regulated by the FSA. And the people who are regulated by the FSA tend to be the people trying to sell you something. QED.

Which leaves only two options. You could ask your spouse, but it is a sad fact that, in any marriage, there is only ever likely to be 50% interest in things financial. This means one of you couldn't give a toss, and when questioned about financial strategy is likely to say something like "I don't care, as long as it's ethical." The only remaining option as a source of financial advice is your father. This is a good bet when it comes to buying property ("location! location! location!") or nylon stockings, but completely useless when it comes to modern financial instruments. Fathers think an Isa is something to do with NASA, and hedge funds are what you need to protect yourself from leylandii.

So, basically, if the advice you really need is "don't buy anything, not now", you're just not going to get it. Your best bet is financial hypochondria. While it may lead to sleepless nights worrying that your money isn't "being made to sweat" (as they used to say in 1999), hypochondria also ensures that you're too scared to take any kind of plunge at all. To paraphrase Mr Gekko again: "Fear is good. Fear works." Particularly if it stops you buying at the top of the market and selling at the bottom.

Anyway, it's perfectly clear what the next growth area is. Stick your money in Argentine mortgages. They can't fail. And if anyone from the FSA calls - you ain't seen me, right?