ISA life durations

GeoH_2

What is the life duration of ISA’s = Maxi / Mini
If the durations are flexible what is the normal duration
that you should let them run.


When can you get all your investment back plus profit?

George

ReportInvestor

They could be for life or three months.

If you close an ISA (or make a partial withdrawal), then the tax relief on that money is lost for life (assuming you have money to invest in future ISAs).

If you don't have enough savings to use your full ISA allowances each year, then there is absolutely no harm in using them as savings vehicles for a holiday / car / child's university costs / future mortgage deposit etc.

If you are investing in the stock market then you should have at least a five year time-frame in mind.

That has nothing to do with the ISA wrapper, but the nature of investing in equities.

On Friday the stock market got back to within 1% of where it was 5 years ago. You need to factor in the possibility of a big short term drop.

carnet

ReportInvestor wrote:

On Friday the stock market got back to within 1% of where it was 5 years ago.

If you are referring to the FTSE 100 index rather than "the stock market" it should neverthless be borne in mind that this is still over 1000 points short of where it stood on New Year's Eve 1999.

You need to factor in the possibility of a big short term drop

Perhaps, although I recently saw a well respected source predicting the Footsie will reach circa 6700 during 2007 .

ManAtHome

It's closer if you factor in re-invested dividends though.

EdInvestor

Can't see any real reason for a big short term drop at the moment - the rise in the FTSE has been accompanied by good earnings growth, thus the market P/E ratio is still very reasonable, indeed some would say cheap.

There is plenty of takeover activity about, and plenty of money going into the market, indeed confidence looks pretty strong - indeed there are press reports this weeken about the LSE eclipsing Wall St in the future! :eek:

The overall economy looks to be recovering and if any short term disaster occurs, there's room to cut interest rates.Of course there's always the possibility of buffeting from over the pond and other nervousness about international affairs, terrorism etc, but the worries about the oil price and inflation, which caused a gloomy period last year, have abated.

All in all the fundamentals look fairly benign at present - the market is certainly not in any kind of "bubble" a la 1999 which might be in danger of bursting. You can never actually know of course - but in any case over the long term it really doesn't matter a toss.

Deemy

ManAtHome wrote:

It's closer if you factor in re-invested dividends though.

Remember to factor in inflation