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Both small and large investors are becoming increasingly vocal against the huge and often unjustified salaries and benefits offered to top executives. There are calls for pay to be linked more closely to performance, and the UK Dept of Trade and Industry wants shareholders to have more say over pay.

United Kingdom capital gains tax is levied on investment profits above exemption levels of 6,800 pounds sterling per year. Tax has to be paid at the tax payer's highest rate. There is an indexation allowance to April 6 1998, taking inflation into account, and a taper relief system has also been introduced to reward investors who hold assets over the long term. The new system may mean that investors pay more. Investors are also affected by the loss of arrangements whereby annual allowances can be used by selling stocks and buying them back the following day.

The benefits and drawbacks of day trading in stocks, and advice on pursuing this activity, are examined in detail.

Advice is provided on websites that are useful to private investors seeking information for portfolio management.

The internet has cut costs for private investors as well as making it easier to obtain information. Investing has become fashionable as a result of the internet, and new investors can easily educate themselves online. Investors can benefit from real-time sharedealing. Internet stocks have seen a rise in value which could lead to a major bubble developing. Investors can find bargains more easily using the internet, investment tools are available, and they can save time by shopping online.

Some 6.5% of people lose their jobs annually, rising to 8.4% for men, and not every is given a redundancy payment, since this depends on the length of time worked. Small firms may go bankrupt and pay nothing, and firms vary in their generosity. Some help is available from the state, such as a Job Seekers Allowance and help with mortgage payments. The initial 30,000 pounds sterling of a redundancy payment is not taxed, and this applies even whe the period of unemployment lasts only a few days.

US assets can offer opportunities for British investors who can use investment trusts or unit trusts to enter this field.

National Savings is a British government-owned savings institution which offers benefits for higher-rate taxpayers, which are set out in detail.

Japan, and Far East Asian markets excluding Japan are examined, as is the performance of three funds specialising in those regions, which can be used in British individual savings accounts.

United Kingdom individual savings accounts (Isas) offer tax advantages to investors which are useful, though they are not as generous as those offered by the previous scheme, Peps. Isas do have the advantage that investors are not restricted to the UK or mainland Europe, unlike Peps. Investors can gain better returns by taking risks, but should not choose investments simply because they have tax advantages. They can also use venture capital trusts and enterprise investment schemes, which also offer tax advantages.

Day traders are private investors who differ from traditional investors in having little interest in funadamental analysis or future earnings of companies that they invest in. They purchase stocks and sell them several times per day, and may only hold stocks for minutes. This style of trading has become possible as a result of the internet. Day traders have a particular interest in internet stocks and new issues. Day trading involves risks, since prices can drop rapidly over the day. False investors may also be supplied to investors who should double-check information that they recive.

United Kingdom corporate bond personal equity plan (Pep) funds are seen as low risk investments, and they are likely to be successful in attracting investors using their last Pep allowance. These funds offer high yields free of tax and attract groups such as those concerned about volatile stock markets, low building society rates, and long-term investors aiming to reinvest. Investors should assess what assets are held in these funds, especially in view of the introduction of junk bond funds.

There are 13 investment trusts and 133 unit trusts based on European stock markets on offer to United Kingdom investors using personal equity plans (Peps). Currency risk has been abolished in countries taking part in European monetary union, and mergers and acquisitions are helping to boost European stock prices. Cost cutting and low interest rates are also European trends that help to boost stock prices. There are risks of slower growth in 1999, with slower exports, and low inflation could affect corporate growth.

United Kingdom self-select personal equity plans (Peps) are especially suitable for investors who already manage a portfolio. Most investors prefer managed funds which cut risks and offer professional management, but self-select funds do not have an initial fee while managed funds may have a 6% initial fee. Low commissions are important for investors in self-select funds who change holdings often. Investors may wish to hold cash, or seek stocks while bargains appear to be available. Preference stocks and other fixed-interest stocks may also be appealing.

United Kingdom single company personal equity plans (Peps) have not been as popular as general Peps due to the risk involved in investing in one company. Single company Peps also involve more administration and have stricter regulations. Investors can still use these Peps as a tax shelter for 3,000 pounds worth of investments in addition to the 6,000 pounds allowance for general Peps. The Individual Savings Account (Isa) will replace Peps in April 1999, and this additional allowance will disappear.

Charles Schwab and Barclays Stockbrokers are launching real time dealing in stocks using the internet from the end of 1998. This will be the first opportunity to deal in real time, though internet-based stock dealing is already available from some stockbrokers catering for private clients. Meanwhile, Interactive Investors is to function as a gateway for stockbrokers offering real time dealing, and ESI functions as a gateway for four brokers offering online services.

Investors using index tracking funds face problems in a bear market, and may not be able to withdraw their assets in time to prevent a loss of value. Stock markets tend to recover after prices fall, and the rise higher than before, so investors who have not sold may be best advised to wait for n upturn. New investors can drip feed to benefit from drops in stock prices, or buy into investment trusts where wide discounts can offer value. Active funds may perform better than themarket as a whole, but there is no guarantee that this will be the case.

Charges for British personal equity plans (Peps) vary a great deal and high charges can affect investment returns. Actively managed plans that have performed well in the past tend to be more expensive with initial charges that may cost 6% with some 1.5% for the annual management fee. The bid-offer spread for unit trusts also represents a charge. Management fees tend to be lower for investment trusts. Index tracker Peps tend to charge less, as do corporate bond plans.

Holders of personal equity plans (Peps) in United Kingdom can retain their plans for as long as they wish but cannot place new funds in a Pep after April 5 1999. Peps are closed after everything in them is sold and the cash is withdrawn after that date. Peps are a good opportunity for investors to increase returns from investments based on equities, and investors who have not used allowances for 1998 to 1999 should consider doing so. They can purchase corporate bond Peps if they prefer to avoid stock markets due to concerns about instability.

Standards for individual savings accounts (Isas), or new United Kingdom savings vehicles with tax benefits, are to be set out by the government. The standards will focus on cost, access and terms, so have been called Cat standards. There are three Isa types, insurance, stocks and cash, and there will also be three Cat types. The financial services industry is divided on the issue of Cat benchmarks, and critics argue that they will not measure risk, and could encourage investors to following passive investing methods.

Nils Taube is one of the most famous fund managers in the United Kingdom and is part of Taube, Hodson, Stonex Partners which has some 2.5 billion pounds sterling under management. He has collaborated with John Hodson for almost 20 years. The team sees its strategy as selecting stocks for the long term, but will make some speculative purchases for the short term. They are optimistic about European monetary union. One area in which the partners have invested in gene research and genetics.

Insurers are concerned that clients will take out policies after genetic testing and insure themseleves against diseases which the tests show that they are likely to suffer from. Insurers may go against a United Kingdom government committee which has called for a moratorium on usage of genetic testing information by insurers. Insurers argue that clients should not be forced to undergo tests, though they wish to have the test results. Some 67% of people die of causes linked to genes, and not everyone can be rejected by insurers, but premiums could be raised for some clients.

There are a number of United Kingdom investment vehicles with tax advantages such as Friendly Society savings plans, which allow small amounts to be saved, though they may have high charges. Tax-exempt special savings accounts (Tessas) and personal equity plans (Peps) are to be replaced by Individual Savings Accounts (ISAs) in April 1999. Tessas set up prior to that date can continue, and Pep holdings have to be transferred to ISAs. Pensions are also tax-efficient, though there are limits on amounts that can be saved. Venture capital trusts are a high-risk tax-efficient form of investment.

United Kingdom tax-exempt special savings accounts (Tessas) will be replaced by Individual Savings Accounts from April 1999, as will personal equity plans (Peps). ISAs will offer income tax and capital gains tax benefits but the allowances are less generous for ISAs than for Tessas. Tessas opened before April 5 1999 can be kept going for five years until they mature, and it is worth while investing in a Tessa if investors are able not to have access to the funds for a five year period.

Investors may accept higher risk levels in return for higher potential rewards. This applies to all investment products, and in particular, equity-based products tend to involve higher risks and rewards than United Kingdom building societies. Investors should assess how long they want to invest and the sum of money they are prepared to lose. The risk level they can accept also depends on age, since younger investors can take on more risk. Specialist funds are more likely to involve risk than are general funds, and diversification is one way of reducingrisk.

Investment professionals from the United Kingdom have a strong faith in equities and see long-term investment as a way to tackle the problem of risk. Private investors are told to retain part of their investments in safe vehicles. Investment professionals see safe investments like government securities as boring and they tend only to hold cash for emergencies. The may also invest in their own funds, and they often see this as a simple option since they would choose the same investments for their personal funds.

The United Kingdom government offers a number of savings products through National Savings, some of which offer tax benefits. There are also products such as bonds which pay interest gross, and they can benefit savers who do not pay tax, though they are not tax free and tax has to be paid by other savers. The Premium Bond is a way to save and gamble at the same time, since the bonds are put into a prize draw each month, and investors can seek the return of their stake money.

Demutualisations of United Kingdom building societies have brought windfall bonuses for members, but this is unlikely to benefit investors seeking to benefit by opening new accounts. Nationwide has stated that any benefits for new investors have to be paid to a charity. The price of second-hand endowment policies and permanent interest bearing stocks have increased. Investment trusts have been set up geared to benefiting from future demutualisations.

Open-ended funds may attract too much money at the peak of a boom. Fund managers prefer to be cautious when stock prices are expensive. New money can be invested in low-risk vehicles, but this affects performance. Very large funds have to invest across a wide range of stocks and can become like tracker funds, which affects theirperformance. Managers may also be attracted to stocks about which less is known. Solutions include changing rules to allow limited-issue funds with a limit to amounts being managed.

The United Kingdom tax authorities are concerned that customers of the Halifax have been misled over deadlines on personal equity plans (Peps). Some stockholders have been told that they can Pep stocks but only using a plan provided by the Halifax because they were received too late. The tax authorities note that other Peps can be used. The deadline also starts when stocks are allocated, so investors receiving stocks late because of a Halifax mistake have not missed the deadline for retaining an exemption for windfall stocks which are not included in normal allowances.

Investors may select a UK portfolio manager because they do not have time to manage portfolios themselves, but they should still monitor the performance of their portfolios. Regulators may not be able to help if the problem if simply poor performance, though unsuitable advice and bad management may be dealt with by regulators. The manager should first be asked to deal with the problem, and then the SFA Complaints Bureau should be contacted. The Consumer Arbitration Scheme could then help, as could the Investment Ombudsman.

United Kingdom building societies have been reduced in number through acquisitions and stock market flotations which are continuing in 1997. Members have sometimes received bonus payments, but there is a dispute over the longer-term impact. The Consumers' Association and MoneyFacts argue that mutuals offer a better deal for borrowers and savers, and mutuals do not have to pay stockholders. Companies that have lost their mutual status argue that they are more efficient so can offer a better deal.

Corporate bond personal equity plans (Peps) offer lower risks than invesments based on equities and yields that are higher than those obtained from building societies as well as tax-free. Investors should assess the charges imposed and note that higher yields tend to imply higher risk levels. Investors who are concerned about capital growth should note that two yields are quoted by managers, and running yields only describe income for a particular year, while redemption yields take capital growth into account.

Fidelity Brokerage Services awaits a decision from the UK Securities and Futures Authority (SFA) on whether a ban on new business is to be extended. The ban was imposed in Oct 1996 after the company had received complaints from investors, hit by problems caused by a new computer system. There would be additional pressure on the UK share settlement system, Crest, and stockbrokers' systems, if Fidelity is not permitted to take on new business at a time when share dealing will increase as a result of demutualizations.

Investing in emerging markets involves risk but also the chance of high returns. The timing and location of investments are key factors affecting returns. Asia is favorite among fund managers, and S Korea the favorite country within Asia in terms of attracting investment. Hungary is favored among European countries and Russia has seen a net outflow, partly due to political risk. Chile, Brazil and Venezuela are seen as strong performers in Latin America.

The performance of Herald Investment Trust is assessed, and it ranks first in an assessment of performance.

The performance of TR European Growth is assessed, and the reasons for the company's success is evaluated. Geographical concentrations can occur, since the trust focuses on individual stocks.

The performance of Fleming European Fledgling is assessed, as are reasons for the trust's success.

Online brokers available for British investors are assessed in terms of cost and services offered to investors.

The venture capital company, 3i, will alter the management of its portfolio, which includes some 3,000 companies. 3i has 200 investment executives in a regional network. There will be new specialist teams geared to different business activities. 3i may sell some traditional industrial stocks and aims to increase the proportion of technology stocks, which show faster growth. The company may be interested in offers from predators seeking to acquire stakes to use for launching bids.

Currency controls imposed by Malaysia have locked in funds held by private investors for a 12 month period. Over 170 unit trusts have been affected, and permitting investors to redeem holdings could result in an unfair concentration of Malaysian stocks for those who remain. A solution that has been proposed is to create mini-portfolios of Malaysian stocks to be set aside until the end of currency controls. Investment trusts have stocks traded in the UK, so have not been affected in this way.

United Kingdom independent financial advisers (IFAs) hold a 57% stake in the UK market for insurance and investment. Most IFAs use commisions rather than fees in order to make a living, and there is concern that their advice may be affected by commissions. There are doubts about lists of approved suppliers sent to members of IFA networks, and concerns as to whether the lists are impartial. Tied advice may be poorer than advice from IFAs taking a commission, and not all consumers are prepared to pay fees.