To sell soon and then dripfeed back in?

Rollinghome

Primrose wrote: »

I believe that cash holdings, even in an ISA may be subject to tax? Perhaps somebody can confirm whether this is correct or not.

Any interest on cash held in a S&S is subject to tax (as are dividends from shares) but not the cash itself, and you aren't allowed to remain in cash indefinitely. In reality, most ISA managers won't pay you any interest anyway, or so little as to be meaningless, so you have dead money losing value to inflation. That's a major downside of stocks and shares ISAs. The best you can do is to move to a very cautious fund, possibly bonds which may also be peaking, or perhaps consider one of the much hyped absolute return funds.

LongTermLurker

Primrose wrote: »

The other thing to bear is mind is whether your funds are invested in an ISA wrapper. If they are and you withdraw some of the money, obviously it can't be replaced. I suppose you could liquidate some of your holdings into cash within an ISA for a period if you're worried about a possible market fall but I believe that cash holdings, even in an ISA may be subject to tax? Perhaps somebody can confirm whether this is correct or not.

I believe that's correct - cash in S&S ISAs earns net interest.

Here's H-L's interest rates - there's little interest payed at all

http://www.h-l.co.uk/our-services/interest_rates?isbasic=1&TB_iframe=true

RayWolfe

LongTermLurker wrote: »

Or am I wrong? Will HL allow you to set up a regular investment from money that's already in your ISA?

Don't know about drip fee in those circumstances BUT the minimum is stated to be £250 not £500 on line. However, by letter I have put in less than that but not recently.

steadysaver

RayWolfe wrote: »

Don't know about drip fee in those circumstances BUT the minimum is stated to be £250 not £500 on line. However, by letter I have put in less than that but not recently.

I believe the £250 minimum is to top up a fund you have already invested in. Not sure you could start with 250 in a fresh fund from cash within the ISA wrapper as it is usually a minimum £1000 investment unless you set up the regular saver with monies to come from an external account. Might be best to give H-L a ring and confrim. I could be wrong.

LongTermLurker

Thanks Ray & SS - that's interesting, they must have dropped it (used to be £1000 new fund or £500 top up iirc). There's still the issue of zero interest in the meantime though...

steadysaver

LongTermLurker wrote: »

Thanks Ray & SS - that's interesting, they must have dropped it (used to be £1000 new fund or £500 top up iirc). There's still the issue of zero interest in the meantime though...

No probs. I am in the same prediciment. I am considering move into cash and re-buying as I believe the markets will adjust when they realise they have got ahead of themselves. But on the other hand, I think I will probably just ride it out and continue drip feeding until I have built up a big enough pot for me to change out and re-buy into several funds for 1000£ and drip feed the rest. I have a long enough timescale to not worry too much about a dip now, and any units I pick up will be cheaper if the market does dip.

Oh and H-L do give interest on cash held in ISA's. It pays 0.05% (0.04% net) on cash balances over £1000 and this is tierd until you reach the spell binding heights of 50k + where you get a nosebleeding rate of 0.25% (0.2% net). Woop indeed

sabretoothtigger

Money market funds will accumulate worth instead of paying interest so you retain the tax free benefit, theres no initial charge which makes them flexible and effectively its the same as money in the bank except with no notice period afaik it seems better to me


None of them seem to holding Australian dollars though which is the kind of fund I'd prefer personally but thats seen as higher risk I guess


http://www.h-l.co.uk/funds/Fund-prices?func=search&formid=1002&company=&sector=123&x=21&y=7&investment=By+investment+name

Rollinghome

sabretoothtigger wrote: »

Money market funds will accumulate worth instead of paying interest so you retain the tax free benefit, theres no initial charge which makes them flexible and effectively its the same as money in the bank except with no notice period afaik it seems better to me


None of them seem to holding Australian dollars though which is the kind of fund I'd prefer personally but thats seen as higher risk I guess


http://www.h-l.co.uk/funds/Fund-prices?func=search&formid=1002&company=&sector=123&x=21&y=7&investment=By+investment+name

But as far as I'm aware you can hold money market funds within a SIPP (and a few other things) but not in a ISA.

Also worth noting that the average money market unit trust fund returned just 0.92% over the past year. (It's still possible to be earning 7.00% from cash placed in savings a year ago.)

Paul_Herring

RayWolfe wrote: »

Confirmed as correct.

But, if memory serves, like National Insurance, it's not called a tax?

cloud_dog

February 2006 was a fairly momentous occurance for me in my investing.

Up to that point I had 'dabled' and held some shares but had predominantly invested via funds (OIECs / UTs) but, in February 2006 I consolidated my investments and started to actively manage and invest.

In the iterim 3.5 (and a bit) years I have increased my portfolio by 375% (or near as dam it). My attitude to risk hasn't altered and my investment focus is very similar (resource based, far east, emerging markets etc).

The point (and I am comming to it).......... is that I kept my iii virtual portfolio of my Funds investments going and can state that over those 3.5+ years my old Funds porfolio has increased in value by ............... 1.2%

Food for thought, perhaps?