Basic advice needed

jampratt

Hi, My dad has recently passed away, he was an IFA and he had a stocks and shares ISA set up for me a while ago. Can somebody explain what the difference between 'book cost' and 'value' is? Ive just had a valuation and the book cost is £23,985 but the value is only £17,217. Also there is a deposit / cash acount within this that stands at £2,089, is this simply cash that hasnt been invested? and if so will it be making any interest? and can this be used to buy additional / new shares?

Nikel

The 'book cost' is how much it cost to buy those shares which may include fees, commission etc, and the 'value' is what they are worth now. So if the share price(s) went up overall the 'value' would be higher, and if the price went down since then the 'value' would be lower. I belive the cash is money not invested (but could be), it may or may not earn interest, depends on the account.

jampratt

Thanks. There is a what seems to be a good mix of shares in this- BP,Mondi, Anglo American, Glaxo, Vodafone, Lloyds and RBS. Obviously RBS and LLoyds have took a major hit so that is why the value has prob dropped, can i expect these to recover? i dont need access to the money for a long while, also i hve been instructed by one of the guys from WHIRELAND (who the isa is held with) that there are good oppurtunities to be had with Shell and / or BG. Can i simply buy shares with these companies using the cash account? Thus meaning I dont have to add additional funds to acquire these shares?

CLAPTON

jampratt wrote: »

Thanks. There is a what seems to be a good mix of shares in this- BP,Mondi, Anglo American, Glaxo, Vodafone, Lloyds and RBS. Obviously RBS and LLoyds have took a major hit so that is why the value has prob dropped, can i expect these to recover? i dont need access to the money for a long while, also i hve been instructed by one of the guys from WHIRELAND (who the isa is held with) that there are good oppurtunities to be had with Shell and / or BG. Can i simply buy shares with these companies using the cash account? Thus meaning I dont have to add additional funds to acquire these shares?

what is past is past
whether a share is worth buying or holding depends upon your view of the future.

why do you want to hold these shares.. is it for sentimental reasons
do you buy shares in your own name now? if not why do you want to start holding them now?

Nikel

jampratt wrote: »

Can i simply buy shares with these companies using the cash account? Thus meaning I dont have to add additional funds to acquire these shares?

Yes I believe so.

jampratt

CLAPTON wrote: »

what is past is past
whether a share is worth buying or holding depends upon your view of the future.

why do you want to hold these shares.. is it for sentimental reasons
do you buy shares in your own name now? if not why do you want to start holding them now?

If these shares will give me a good return over the long term i would keep them, why does anybody else have shares? The isa is in my name. I am totally new to this lark but i know that the money in there will not earn anything should i w/d it and put it in a savings account.

Hen_Step

It may be worth looking at when the shares were purchased. Seems like they were bought when the FTSE was high. I have been investing for 14 years and been through 2 peaks and troughs, so my investments have been worth less than I put in them and been in good profit. On the last peak I sold a few and made some good money. Then when the market dropped I bought new investments.
So it is all about timing.
If you research when the were bought and what the prices have been, and how the companies are doing now. you may find out whether it is worth hanging on or not.
Unfortunately, sometimes you have to take the loss.

jampratt

They will have been boughtb around 6/7 years ago. Looking at the values the only ones that are down are RBS and lloyds, are they are down to next to nothing, will these ever recover or is there no way of telling either way?

cos69

jampratt wrote: »

They will have been boughtb around 6/7 years ago. Looking at the values the only ones that are down are RBS and lloyds, are they are down to next to nothing, will these ever recover or is there no way of telling either way?

whether these recover will depend on government action because the government owns a very large percentage of those companies. If they are down to next to nothing then I would hold onto them; you have already taken the hit for the drop.

The cash in the account may be from dividends that have been earned over the last 6/7 years. Worth buying something with that because I doubt you are receiving anything other than a nominal amount of interest, say 0.1%.

jampratt

cos69 wrote: »

whether these recover will depend on government action because the government owns a very large percentage of those companies. If they are down to next to nothing then I would hold onto them; you have already taken the hit for the drop.

The cash in the account may be from dividends that have been earned over the last 6/7 years. Worth buying something with that because I doubt you are receiving anything other than a nominal amount of interest, say 0.1%.

Ta. That was my thinking, a few people in the know have told me Shell, BG, Aviva, Glaxo are all solid. Would it be best to split the cash into buying shares with 2 or more of these?

cos69

jampratt wrote: »

Ta. That was my thinking, a few people in the know have told me Shell, BG, Aviva, Glaxo are all solid. Would it be best to split the cash into buying shares with 2 or more of these?

Those are good steady long term plays, but you don't want to split £2,089 too much because of the buying costs. Your current holdings give you a good bit of diversity but you could consider adding say a mining company (although some might say that would be same class as Shell or BG ie natural resources) or a technology company. Timing is important - some mining stocks have dropped recently so good time to consider buying. Other options might be a fund investing in emerging markets or consider ETFs in base metals if you like the look of gold/silver/copper/zinc etc.