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ISA help! Diminishing fast!
speckers
Posts: 7 Forumite
Hi all. Would really appreciate your advice here as I am on shaky ground when it comes to ISAs!
I have a stocks and shares ISA with F&C Investments which has been dropping steadily - I've just had my annual statement which shows it has decreased again. I originally had around £2,700 in it and now it's down to £2,091 and I'm panicking!
What do I do? Transfer to another ISA (what kind is safest at the moment?), take it out and put it in my savings, or leave it and hope things pick up?).
Really appreciate any advice you can give me.
Thanks.:j
I have a stocks and shares ISA with F&C Investments which has been dropping steadily - I've just had my annual statement which shows it has decreased again. I originally had around £2,700 in it and now it's down to £2,091 and I'm panicking!
What do I do? Transfer to another ISA (what kind is safest at the moment?), take it out and put it in my savings, or leave it and hope things pick up?).
Really appreciate any advice you can give me.
Thanks.:j
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Comments
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What fund(s) is it invested in?Trying to keep it simple...
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I originally had around £2,700 in it and now it's down to £2,091 and I'm panicking!
Why are you panicking? That loss is only 22% and quite typical for a 100% equity based investment. (making assumption equity until you tell us what the investment actually is).
The stockmarket zig zags, always has, always will. Historically you get a bear market once every 5 years and you always invest for periods in excess of 5 years so you must have expected one at some point. This bear market is now 15 months old and has only dropped 29%. The last one at the start of the millenium dropped 43%. A bear market is defined as a loss of 20% from the recent high.
So, you can see that the markets havent really suffered to the same level as media coverage would suggest. If you are panicking at a 22% loss then it would appear you have invested above your risk profile.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Better (in future) to subscribe monthly towards the annual limit - and the longer you do this for the more the ups and downs get averaged out - giving you the confidence to continue investing.
(And the other question that will keep you awake at night is: Are you investing in the right areas? But that is general to all investments).....under construction.... COVID is a [discontinued] scam0 -
In 2000, my mum invested £14,000 in a S&S ISA with C.I.S in their UK Growth Trust
At it's peak (May'07) it was worth £18,306, but now is worth £14,744.
As she's 70 & was hoping this would fund her retirement, she's worried that it's going to keep falling & is wondering if she should she move it somewhere else to maximise it's potential.
Any sound advice gratefully accepted.0 -
As has been said, you can expect these things to drop in value from time to time. Over the long period 5-10+ years you can expect them to out-perform cash.I have a stocks and shares ISA with F&C Investments which has been dropping steadily - I've just had my annual statement which shows it has decreased again. I originally had around £2,700 in it and now it's down to £2,091 and I'm panicking!
If you are not in it for the long term then you need an exit strategy.
Things are low now. They might drop lower in the next 6 months, they might go up in the next 6 months. I have no idea. If they go lower then you are better off cashing it in now and re-purchasing in 6 months time. If they go higher then you are better off holding on to them.
But as no-one knows which way they will go in the short term, no-one knows which is the best answer.
It's a question of what you need the money for when. If, for example, you need at least £2000 in six months time then I would say cash in now to guarantee that money. If, on the other hand, you are trying to maximise cash for retirement in 20 years time I would say hold on to it.
Unless you know what you are doing (i.e. you think you can beat the market) then the less buying and selling you do the better.
Think of it in terms of driving along the motorway in heavy traffic. You could change lanes to a faster lane, but that lane may well slow right down just up ahead. You may have been better off staying in the lane you were in. If you had a clear picture of what was going on you could do best by switching lanes. But generally speaking you are best off if everyone just stays in the lane they are in. In any case the traffic (just like the stockmarket) will speed up eventually.0 -
Even at the age of 62 I would have said that she was too old to be investing in the stockmarket. It is very volatile, unless you are prepared to be in it for the long haul. If she leaves it be for the next 5-10+ years then the chances are that it will do well. But if this is to fund her retirement then I'm guessing she's going to want the money before then.In 2000, my mum invested £14,000 in a S&S ISA with C.I.S in their UK Growth Trust
At it's peak (May'07) it was worth £18,306, but now is worth £14,744.
As she's 70 & was hoping this would fund her retirement, she's worried that it's going to keep falling & is wondering if she should she move it somewhere else to maximise it's potential.
Any sound advice gratefully accepted.
I think she needs to start getting the money out of there. I would guess that the best way would be a little at a time. maybe £500 a month? If it stays at its current price then it would pay this for two and a half years.0 -
Why dont you just stick them in Cash ISA? OK, might not be as good as Share ISA, but will only go one way, up.0
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Sorry,JimmyTheWig wrote: »Even at the age of 62 I would have said that she was too old to be investing in the stockmarket. It is very volatile, unless you are prepared to be in it for the long haul. If she leaves it be for the next 5-10+ years then the chances are that it will do well. But if this is to fund her retirement then I'm guessing she's going to want the money before then.
I think she needs to start getting the money out of there. I would guess that the best way would be a little at a time. maybe £500 a month? If it stays at its current price then it would pay this for two and a half years.
I didnt exactly phrase it well.
It's not primarily to fund her retirement, but to split amongst her 6 grandchildren as an inheritance.
There may be a slight chance that she might need the money in future for some unforseen circumstance, but primarily it's for giving it to her grandkids.
So obviously, the more she can pass on the better.0 -
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That changes things, somewhat.It's not primarily to fund her retirement, but to split amongst her 6 grandchildren as an inheritance.
I'd stick to what I said earlier, then. If she thinks she'll "need" the money within the next 5-10+ years then she's better off holding it as cash in a high interest account. If she thinks she's got at least that time to allow it to grow then I see no reason not to leave it where it is (unless you think you can second-guess the market, selling now and buying at the bottom of the bottom).
Not a nice timescale to have to try to predict, I'm afraid...0
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