Are we wise to continue investing in MAXI ISA?

miaxmia

Has anyone any advice to offer? We are continuing to pay £600 into a MAXI ISA each month, but is this a wise thing? Part of me thinks we are buying stock cheap and, in time, we could reap benefits, but each day the situation regarding a recession looks worse and I wonder whether we should stop ploughing anymore money into this ISA? Any advice welcome.

dunstonh

Has anyone any advice to offer?

Nothing on regulated financial services products posted on these boards is advice. Its discussion only.

We are continuing to pay £600 into a MAXI ISA each month,

Thats a good amount. Well done.

but is this a wise thing?

Absolutely. Maximising your tax free allowance and increasing your assets is never a bad thing.

Part of me thinks we are buying stock cheap and, in time, we could reap benefits, but each day the situation regarding a recession looks worse and I wonder whether we should stop ploughing anymore money into this ISA?

The markets act in advance of events. That is one of the reasons why they have gone down before the recession actually starts to bite. You will find that the markets go up during the recession despite poor data on anticipation of what is to follow.

By buying monthly you are averaging out these ups and downs. That said, one assumes that with £600 pm you have many funds in many different areas and you are not putting all your eggs in one basket. You havent said anything about the investments you have in the ISA.

Phillygee

I too feel in a simlar boat to miaxmia. Currently i am putting away £333 a month into an investment ISA, only to see its value plummet in the past few months. As quoted part of me likes the idea that i am now buying stocks cheap but another part of me thinks i should cut my losses and put my money in a much safer place.

Obviously all my stocks that are brought are chosen via the bank my Investment ISA is with...what happens if these companies go kaput? Do i get nowt?

I would also like to add that the Investment ISA is a high risk one - is this a foolish thing in our current climate?

Comfortably_Numb

I started ivesting £300 a month in one of these four months ago, and two weeks ago was £200 down on what I'd paid in in such a short space of time. I was feeling pretty stupid for jumping in at that time, but over the past week or so it has recovered £100 of my deficits, so I'm a bit happier, and am going to stick with it.

dunstonh

only to see its value plummet in the past few months.

The value has not plummeted. That is a media phrase to hype the degree of drop.

The value has gone down and assuming equities (as you to don't say where you are invested), then the drop is within the risk tolerance of the investments.

There have been 8 financial crisis since 1956 and events like this average once every 7 years. Between 2000-2002 the stockmarket fell by an almost identical amount. Its not new. Its happened before and it will happen again. If you dont like the risk then go with lower risk investments

Obviously all my stocks that are brought are chosen via the bank my Investment ISA is with

Banks dont choose your investment funds. Sales reps do not have that remit. They present the funds that match your risk profile and you pick them. It may not always be presented like that but that is how its documented. If they only have one fund in that risk profile then that is what you get. That is another restriction in dealing with tied sales reps rather than IFAs.

what happens if these companies go kaput? Do i get nowt?

Correct. You get nothing. However, you wouldnt be worrying about your ISA if that happens.

I would also like to add that the Investment ISA is a high risk one - is this a foolish thing in our current climate?

Who knows. You havent told us anything about the investment. In the last week, many high risk funds have one up 25-30%. Some havent moved. Performance isnt measured by risk.

cheerfulcat

miaxmia wrote: »

Has anyone any advice to offer? We are continuing to pay £600 into a MAXI ISA each month, but is this a wise thing? Part of me thinks we are buying stock cheap and, in time, we could reap benefits, but each day the situation regarding a recession looks worse and I wonder whether we should stop ploughing anymore money into this ISA? Any advice welcome.

Hi there,

Assuming that you have no debt, have a decent amount of rainy-day money in cash and won't need this capital any time soon then I would say that regular payments into your ISA will pay off in the long term.

Phillygee

Thanks for your speedy helpful responses.
To dunstonh: I will try and provide you with as much info as i can remember from my investment ISA...here goes.
It is a high risk Investment ISA with the halifax, as said i pay in £333pm. I liked the look of it because when i got my new job, i fortunately had extra cash that i wasnt likely to need in the near future (this was about 2 years ago) so since then each month i have taken £333 and put it into this, it was appealing to me as there were no up front chargers (like other banks) and the 1.5% annual management fee was something i was willing to pay for as i believe they have more of an idea what to do with my spare cash then i do.... or at least i hope they do :rotfl:

Off the top of my head this all the infomation that i can provide.

I would like to add that i do have other funds in more secure places, such as an ordinary account and also a few years worth of savings in a cash ISA.

I am not in any desperate need for this money at the money, but having said that it is still my money and is still my savings and i do not want to loose money unnessacerily simply because i am being foolish/naive in our current situation.

Thanks once more for constructive feedback - keep the discussions coming

dunstonh

It is a high risk Investment ISA with the halifax, as said i pay in £333pm

oh dear. Banks are not known for quality funds and Halifax have some of the worst.

it was appealing to me as there were no up front chargers (like other banks) and the 1.5% annual management fee was something i was willing to pay for as i believe they have more of an idea what to do with my spare cash then i do.... or at least i hope they do :rotfl:

If you buy cheap you get cheap. Also, check the amc. Many of Halifax funds are actually 1.75% and not 1.50%. Thats how they get away with no initial charge. They claw it back over time.

Hopefully the £333 is spread over multiple investment funds and not going all in one fund. 5 or 6 funds would be ideal wtih that amount.

Primrose

Hopefully those of you who are investing in equity ISAs via monthly contributions will see the value of your investments rise when the economy eventually turns round. The only comment I would make is that the next twelve months or so could be very, very difficult with unemployment rising rapidly so if you haven't got an Instant Access Emergency savings fund with at least three months living expenses in it (and preferably six months), make that your first priority.

miaxmia

You havent said anything about the investments you have in the ISA.[/quote]

I am with a company called Fidelity and the individual funds were picked by my financial adviser - £100 into 6 different funds each month.

miserable_ol_so_n_so

Primrose wrote: »

Hopefully those of you who are investing in equity ISAs via monthly contributions will see the value of your investments rise when the economy eventually turns round. ..........................

Whereas this is the conventional wisdom and in normal recessions this is what would happen,........I dont think we are in normal times.........in my humble opinion....many companies are going to go bust....like today there are reports that woolworths could be sold off for £1.....no doubt there will be others........additionally....look at how much the banks have fallen.....and theyre unlikely to recover as having accepted Alistair Darlings shilling, they wont be paying any divdends. Under these circumstances, expect major losses on funds investing conventionally. Of course there will be winners. Thats my humble opinion. PS: I am an investor, drip feeding my fund monthly, but I wonder if that is wise. We need to find savvy investors......those that would buy off the likes of Baugur, Woolworths etc....at knock down prices. That is where the money will be made, not in conventional run of the mill funds...more like in Vulture funds.