Paying a high emotional price for hard sell by fax

q I am getting increasingly irritated by the junk faxes I am receiving, usually from organisations plugging information by premium rate phone or fax or trying to sell products. I have tried faxing the documents back, but this has not made any difference. Can anything be done to stop this practice?

n This is an increasing problem and one that is difficult to stop. Those firms and organisations which send faxes to numbers from databases should have a licence from the Office of Telecommunications. Licence holders are supposed to remove numbers from their database if asked to do so, and if they don't you should report them to regulator Oftel.

There is also a Fax Preference Service which keeps a register of those who don't want to receive junk faxes. Unfortunately, only a handful of companies who do the sending take note of it. There are moves to make membership of the scheme compulsory and to implement a European Directive on the subject, but for the moment junk faxes are probably here to stay.

As with junk mail, fax senders can buy lists of numbers from other organisations, and you must always remember when buying by mail order to tick the box which says you don't want communications from other companies.

Cost of two homes

o I have built a new house but am having problems selling my existing one. Should I clear the first mortgage and let it, or is it possible to pledge part of my pension fund to put towards the cost of the new house?

n Renting out the old house is certainly an option, but there can be considerable costs and upset involved, depending on how the tenants behave. If they are not careful, you can be left with repair bills, even if their deposit is retained. It may be better to take a lower price for the house and avoid such problems, but this is obviously a personal decision.

As for putting your pension fund towards the cost of the new property, this is not to be recommended. Up to a quarter of the benefits on retirement from a personal pension can be taken in cash, but the rules don't allow you to pledge this sum in advance to a mortgage lender or anyone else.

If for any reason you could not continue your pension contributions, through ill health or financial difficulties, or because of changing your employment and joining a company scheme, your fund would be badly depleted if the cash sum was eventually used to repay a mortgage.

Sell or hold bonds

o I bought some corporate bond Peps a couple of years ago because of their high income and didn't expect much capital growth. However, I have been pleasantly surprised. Now I am a little nervous over what happens next. Are they vulnerable to a fall, and should I sell in the hope of buying back in a few months, or should I hang on?

n The strong performance of shares has pulled convertible stocks up and there have been no major shocks over interest rates to upset them. The next move in UK rates could well be down, though not for some time, so the stocks should be supported from that point of view.

A sell-off in equities would, of course, pull them back, so you are back to the $64,000 question which all investors are asking themselves. The overall background remains favourable, with low inflation, steady growth in the major economies and plenty of cash waiting to be invested, and it is encouraging that not everyone is wildly bullish - it is when everyone thinks alike that you really have to worry.

However, valuations appear to discount the good news for some time to come, and shares are vulnerable to a setback on Wall Street. If it is necessary to increase US interest rates, there will be a sharp fall in shares world-wide, and there is a scenario favoured by the bears that falling prices will be self-feeding, as people rush to secure gains they have.

If there is a drop, convertibles should not fall as much. But the chances of such a drop are not great enough to warrant selling in the hope of buying back cheaper later on. Only if it was of at least 10% would such a strategy prove to be worthwhile.

The editor of The Herald accepts no legal responsibility for the answers given in these columns. Readers are invited to submit concise questions for answer in the paper. No correspondence can be entered into.