Stocks&Shares or Cash ISA?

ellbells01

Hi,

I have about £6000 currently locked into a bank account where I get a better interest rate if I don't withdraw anything. I'd like to invest it in an ISA - I've read Martin's guide to the difference between stocks & shares and cash ISA but I don't know which is better for me??

Is it better to invest in the stocks & shares at the moment, with them being pretty low at the moment and all?

It probably affects the decision so I will mention it: I am saving the money to fund my PHD which will probably be in about 2 years time or so.

Help?

Lokolo

Just because they're low now it doesn't mean they will be high in 2 years. They could still be low, or even lower, in 2 years time. What then?

Stocks and Shares are investments which you could lose your capital.

If you don't wan to risk your capital, stick with Cash ISA.

Ste_C

Investing in the right funds and shares is like investing in a licence to print money.

Investing in an ISA paying peanuts is like a licence to bore yourself rigid.

Farway

Ste_C wrote: »

Investing in the right funds and shares is like investing in a licence to print money.

Investing in an ISA paying peanuts is like a licence to bore yourself rigid.

Given the OP needs the money in about two years boredom would be the best option do you not think?

And the OP sounds like they have zero knowledge of which are good, bad, or lacklustre regarding shares or funds, thus is just as likely to put it into a dog and lose money

Lokolo has it right, stick with cash and ignore the sirens call onto the rocks

ellbells01

Thanks guys. Yeah you're right I would have no idea on good shares investments.. I thought that you just took out a 'stocks & shares' ISA and didn't actually have to choose which shares etc..?
Also, I could be a bit flexible on time. I have other little pools of money in various places I could draw upon first. Someone suggested that I invest half into cash ISA and half into S&S ISA, if they weren't doing well then I could leave them in for potentially up to 5 years? Or, I could choose a different cash ISA for 5 years and lock that money away with the intention of using it in my later years of study rather than first year. I guess that would mean a better deal on the cash ISA?

dunstonh

I thought that you just took out a 'stocks & shares' ISA and didn't actually have to choose which shares etc..?

You have tens of thousands of options you can put in a stocks and shares ISA and they dont have to include stocks and shares. The wrapper really ought to be called Investment ISA.

Someone suggested that I invest half into cash ISA and half into S&S ISA, if they weren't doing well then I could leave them in for potentially up to 5 years?

Its reasonable.

jamesd

Since you don't know what you're doing, you might consider starting with Hargreaves Lansdown and considering splitting the S&S money three ways between Invesco Perpetual Income, Jupiter Corporate Bond and Neptune Global Equity funds. Accumulation versions where you have a choice between accumulation and income version. Once a year do a sell and buy something else transaction to even out the split so it stays at 1/3 each. The start of May is quite a good time for doing that.

The risk is that there may be a further drop in value before prices recover and that you might have to sell during a low point.

It's not necessary to do all of the buying now. You could do it in monthly chunks over the next six months, say. That way if the markets fall during that time you'll be able to buy at a lower price, while if they go up you'd have lost some potential gain.