What do I do?

Bendog_3

:beer: Happy New Year ! :beer:

I really need some advice if possible. I have been paying into a stocks and shares scottish widows isa for approx 7 years and pay in £300 a month. In the last year I have lost £4000 in its value and want to know whether to pull the plug and invest / save it elsewhere. Would it be sensible to change it to a fixed rate isa? I know its probably going to dive for another year. I dont like paying money in and the figure goes down. What do I do? Any advice would be great.

emma396

Personally, I'd probably stop investing in stocks and shares at the moment, but leave whats already invested in the market. Your £300 can go into a cash isa or just an ordinary savings account for the time being.

a7man

Any idea what funds you are invested in?

I would continue to pay in, shares are cheap at the moment and many still undervalued so you will be getting more for your money. As long as the moeny is going in for the long run, you should see recovery.

What is the total value so that we can see a % drop?

You could pay your new investment into a lower risk fund as it sounds like you may be investing at a level of risk you arent comfortable with.


Interest rates are v low at the moment too for all fixed rate investments.

earlgrey_3

Bendog wrote: »

:beer: Happy New Year ! :beer:

I really need some advice if possible. I have been paying into a stocks and shares scottish widows isa for approx 7 years and pay in £300 a month. In the last year I have lost £4000 in its value and want to know whether to pull the plug and invest / save it elsewhere. Would it be sensible to change it to a fixed rate isa? I know its probably going to dive for another year. I dont like paying money in and the figure goes down. What do I do? Any advice would be great.

From your figures I assume you've paid in £20-£25K and have lost about 20% or so. Which suggests you've been cautious and could have been a lot worse this year.

Do you mean switch to a fixed interest unit trust fund?

I don't know the details of the Scottish Widows ISA but I don't think it would be my first choice as there seem to be a very limited range of funds to choose from. You might be better off at somewhere like http://www.h-l.co.uk who offer a wider range of investments. Check at http://www.trustnet.com to compare how well your SW funds have done with others in the sector or if you could have done better.

If you wanted to put some money in a gilt fund you could do worse than the L&G All Stocks Gilt Index Trust which has charges of just 0.2% pa. (Compared to 1.0% charge, 1.11% TER, for Scottish Widows managed gilt fund which consistently underperforms the L&G index fund.) Remember though than even gilt funds could fall if the current expectations of falling interest rates reversed. Many corporate bond funds have lost big-time this year but might do better looking forward. The Scottish Widows Overseas Fixed Interest Tracker is up 50% since August. Nothing within a S&S ISA is without some risk.

For long term investment consider investment trust schemes too as they tend to have much lower management costs than unit trusts as they don't pay ongoing commission to financial advisers.

Blah99

emma396 wrote: »

Personally, I'd probably stop investing in stocks and shares at the moment, but leave whats already invested in the market. Your £300 can go into a cash isa or just an ordinary savings account for the time being.

I'd do the opposite. He's already taken the hit and has been investing in this fund for a long time, so now - when markets are low - is exactly the time he should continue to put money in. Paying in (buying) when prices are high and withdrawing/not purchasing/selling when prices are low is a classic investor mistake.

He should be rubbing his hands with glee, not worrying about this (providing he doesn't need the money in the immediate future).