Which Legal & General ISA?

ragingbass

Oh man, I hate it when you write a long response and then the site times you out!! Anyway, will make this one shorter.

There's some top investment advice on here, but I guess it depends exactly what OP is after? Short term few quid from cashback, or a long term diverse investment strategy? My impression was that it was more of a short term thing.

I went for the short term cashback reasons recently and chose the FTSE100 index tracker. Main reasons were:
1. It's easy to keep track off, watching the bbc news in the morning while eating my cornflakes
2. I'd only be investing the minimum £50 a month, but I like to invest in this country
3. I figured it was a fairly low risk choice, because my investment was only intended for the short term (although I definitely take on board the comments on it being higher risk for future reference)

So to date, I've invested £100 over 2 months and it's worth about the same, and received my £110 cashback through quidco. I'll now close the account having made a few quid, everyone's 'appy :beer:

Fire_Fox

Well I have decided to bite the bullet, and opened the Legal & General ISA Japan Index (I think this is actually quite high risk!) with just £50 a month, re-evaluating in April, and also a cash ISA with Alliance & Leicester which I will max out.

Thanks everyone!

Mandark

I've been running an L&G stocks and shares ISA (50/50 split between UK Index and Worldwide) for the last 10 years. Just seen latest update - lost two grand in 6 months - nearly 20% of its value. Great!!!

I suppose the only advantage now is that the unit prices are quite cheap so my purchasing power is now greater. I had considered upping the monthly payments last April but glad I didn't now. Might do so soon but still wary of the market.

dunstonh

opened the Legal & General ISA Japan Index (I think this is actually quite high risk!)

Yes. Loss potential of around 75% in a 12 month period. Although that is also the potential gain figure as well. Japan has been a good place to be over the last few months but that is mostly on the back of currency rather than stockmarket. That is likely to swing back at some point.

I've been running an L&G stocks and shares ISA (50/50 split between UK Indexand Worldwide) for the last 10 years. Just seen latest update - lost two grand in 6 months - nearly 20% of its value. Great!!!

Of course you have. The L&G UK fund has potential losses of around 50% in a 12 month period and the worldwide one 60%. 20% is a tiny loss compared to what these are capable of losing.

One is medium/high risk and the other is high risk. You should expect losses like that. Since 1986 there have been 10 periods where losses have exceeded 10% p.a.three periods when losses have exceeded 30% and two periods that exceeded 40%. You should bank on a significant loss appearing at least once every 7 years.

Mandark

Yeah I took the gamble. I wouldn't have minded so much if it wasn't for the fact that it seemed to take so long to build up the plan to a respectable level. Then a big loss in one fell swoop! Such is life!

dunstonh

Mandark wrote: »

Yeah I took the gamble. I wouldn't have minded so much if it wasn't for the fact that it seemed to take so long to build up the plan to a respectable level. Then a big loss in one fell swoop! Such is life!

That is the problem with regular contributions. The amounts at the start are often £50-£100pm or similar. it can take at 10-15 years to start building up an amount where the volatility of the markets can really become noticeable.

If you then get a bad period before a good one, it can look like the whole thing was a bad move. If you get a good period first, the opposite applies.

As long as you remember that it is a zig zag and when you do start building up larger amounts, start to diversify across multiple funds, including lower risk and higher risk and rebalance between these, then investing should turn out to be successful.

Milarky

I've done this two year's running @ £50 per month. I selected a Far East (i.e. ex Japan) fund and it has been volatile - but has also fallen at lot. However I opted to stop my £50 after several months (8 months the first time, and 5 months the second time) and sold my holdings in May 08 ('sell in may and go away') for a modest profit and Jan 09 (new year philip) for break even - taking advantage of temporary periods of upswing. It was easy to check the daily valuation for movements....

As long as the 'staked' money is small in proportion to the cashback (which was £110 rather than £85 last time) this is worth doing - because the losses are all minmized. But forget about your S&S ISA allowance unless you have money to burn - anything you can get in an ISA you can get via more flexible non-ISA accounts.

By the way, L&G must have got wise - because they are now saying must hold investment for 4 months (presumably cashback will be held back also) - so £50 a month seems the way to go.... until they tie it to lump sums only....

Fire_Fox

I made a paper profit of £2.27 in my first two weeks! Presume thins is just beginner's luck but it would be nice to carry on at this interest rate ...