L&G Pacific Index Trust - Advice?

carlosthejackal

Hi,

I invested £2450 in April and this is now worth £2122.

I knew this would be a longer term investment.

I have £500 spare - would now be a good time to plough it back into the fund whilst it is low(er)?

Or should I just forget about the L&G trust and save the £500 and my future monies in a steady cash isa?

(I am saving for an engagement ring)

Thanks

earlgrey_3

Carlos, do you have any other money invested in shares or is that your only fund? If so, by putting everything in one fund, regardless of which it is, you are likely to see a lot of volatility. With your eggs in one basket you could increase the chances of a large gain but will certainly increase the chance of a large loss.

As this is an ISA forum I assume the fund is within an ISA. Is there any particular reason why you wanted a stocks and shares ISA? If you pay higher rate income tax you'll save some tax on the dividends but I assume the dividends are small on that fund. You could save on capital gains tax allowance but only if you are already fully using your £9600 pa capital gains tax allowance that the nice taxman gives you.

Anyone who pays income tax, whether basic or higher rate, will benefit from a cash ISA. Having stocks and shares within an ISA only saves tax if you are are paying higher rate income tax, subject to capital gains tax, or in some circumstances if you are over 65 and could benefit from the age allowance. Or if you will be paying those taxes in the future. That said, it usually makes sense to have shares within an ISA provided there's no extra cost.

With the current volatility in markets most cautious investors would want to be substantially in cash or other than shares for some time yet and as you are saving for an engagement ring I assume you don't have large cash reserves. Use your cash ISA allowance before thinking of anything else and reduce the risks to your investments by diversification.

carlosthejackal

earlgrey wrote: »

Carlos, do you have any other money invested in shares or is that your only fund? If so, by putting everything in one fund, regardless of which it is, you are likely to see a lot of volatility.

I only have money in this fund yes.

Can you recommend a good Cash ISA, pehaps one that is untouchable and one that I can dip into if needs be?

Thanks for the advice

dunstonh

Eggs all in one basket and in a high risk area. If you are going to put in then at least diversify a bit.