What a bad year for the units

In the second in a series on bad investments, Willie Williams talks to Corinne Simcock about a year that began with Elvis Costello and a pile of money and ended in a storm and a crash

Willie Williams, 45, is an audio systems engineer with the European division of the sound company Clair Brothers. His career began as a Lloyd's of London clerk, but he swapped his three-piece suit for a tee-shirt and jeans to work with a very different set of names, spending life on the road with the likes of Bob Dylan, Bruce Springsteen and Madonna.

"1986 was a very good year for me, because I got a job as sound engineer with Elvis Costello - whose music I adored - and spent several months touring the US and Europe. It was the rock 'n' roll dream come true.

"For the previous seven years I had been running my own sound equipment hire company and managing a small rock group, neither of which had made me any money whatsoever, so while other members of the Costello crew were partying, I was being extremely frugal.

"At the end of the tour I got my pay cheque and tucked away what for me was a very large sum of money in the building society.

"The problem in my business is that you come off tour with cash in your pocket but you never know where the next job is going to come from. Some people blow it all, but obviously the most sensible thing is to try and spin it out in case you're unemployed for a few months. Fortunately, on this occasion, I was going straight onto another tour.

"I had made no savings whatsoever while I was running my own business, and although I had started a small pension plan when I began working for other people, by the start of '87 I was very much aware that I had made nowhere near enough provision for my future.

"From reading the papers it was obvious that my pension would provide me with nothing by the time I was 60, and money left in a building society for 20-odd years was not going to give me a sensible return.

"This was the time when the Stock Exchange was going through the roof and house prices were soaring, so when I had a break in early March I set up a meeting with my financial adviser to discuss the possibility of buying some unit trusts and increasing my pension contributions.

"He left me with all the relevant forms to fill in and I told him I'd get back to him within a week. I then did absolutely nothing about it until September, when I was offered a tour running through until Christmas.

"At that point I ran around frantically trying to take care of everything I should have done over the previous six months. I settled all my outstanding bills, found the forms from my financial adviser and - knowing I could be sure of a decent amount of money coming in - decided to send off a cheque.

"Despite the fact that I had never invested more than pounds 1,000 before in any one thing, I decided to buy one lot of unit trusts at pounds 6,000, and then, on the spur of the moment, threw another pounds 4,000 into a different company, bringing it up to a nice round figure of pounds 10,000.

"On my way to the airport on October 1st I posted the cheques, then disappeared to deepest France to begin touring with Johnny Halliday.

"Black Monday followed 18 days later. We were working so hard that I was completely out of touch with what was going on in England. It was only when news of the Stock Exchange crash - and the 1987 hurricane - hit the local papers that I dashed into a railway station to buy an English newspaper to find out what was going on.

"To be honest, I was more worried about the storms than the crash, but I was 800 miles from home and there was nothing I could do about either. As it happened, I was lucky with the storms: the few tiles that had fallen off my roof were not important... and none of them had landed on my car.

"As for investments... they do say that the best time to buy is immediately after a crash, not just before. Having already procrastinated for seven months, with the benefit of hindsight it would obviously have been better had I waited a few more weeks.

"Fortunately I had invested for the long term rather than expecting a quick return, so although I was cursing myself at the time, it wasn't the end of the world.

"Nine years on, some of those unit trusts are still only worth two-thirds of the price I paid for them. It had taken two years of saving for me to raise that pounds 10,000, and I spent it all in one day.

"Although nobody could have possibly predicted Black Monday, I made three big mistakes which I will never repeat.

"First, I procrastinated. The advice I was given was right at the time, but I didn't act on it. Second, I stopped reading the financial pages and was completely out of touch by the time I got round to sending the cheques off. Third, when I decided spontaneously to invest a further pounds 4,000, I did it without even thinking at all.

"The moral of the story is: don't take your eyes off the ball."