10K to invest, need S&S ISA advice please!

ViolaLass

StevieJ wrote: »

I would be a bit hacked off if I had invested in March/April 2009 and the value had gone down, almost impossible I would have thought, and that includes BP.

But that doesn't fit what the poster said they did. They said they invested in 2008 and 2009 and that 'at one point', the value of one (of the shares? of the funds?) went down to £3k.

StevieJ

ViolaLass wrote: »

But that doesn't fit what the poster said they did. They said they invested in 2008 and 2009 and that 'at one point', the value of one (of the shares? of the funds?) went down to £3k.

I was guessing that they had invested in an ISA which are mostly taken out around March/April after publicity. In any case it is difficult to see any investments from 2009 being currently the same or down, although 25% down on the 2008 one (at some point, probably March 2009) would be perfectly feasible.

Ilya_Ilyich

DavidHayton wrote: »

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... as long as the stock market rises after the money is invested. If you happen to invest the lot at a stock-market high (damn-near impossible to predict without the benefit of hindsight) your return will take a hit.

Phased investment is safer because it spreads the risk. Also - if you invest the same amount in cash terms each time - you benefit from pound-cost averaging (essentially you will buy more shares at cheaper prices than expensive prices).

See http://en.wikipedia.org/wiki/Dollar_cost_averaging for more info

Lump sum always increases expected return vs DCA (assuming investing in stock and that this has a higher long-run expected return than cash).

You're always going to be exposed to risk when you invest in equities/bonds; of course DCA will reduce variance of your returns because you're just spending time in cash instead of the market, but this would be foolish for someone who's opening an ISA specifically to invest in the market.

DCA is essentially increasing your risk exposure as you get older and there's no rational basis for it - you're trading lower returns for a false sense of 'safety'.

ViolaLass

StevieJ wrote: »

... although 25% down on the 2008 one (at some point, probably March 2009) would be perfectly feasible.

I also assumed that this was the period they were referring to, which would back my point that it appears they didn't know what they were investing in.

jimjames

ViolaLass wrote: »

But that doesn't fit what the poster said they did. They said they invested in 2008 and 2009 and that 'at one point', the value of one (of the shares? of the funds?) went down to £3k.

But they also say that both are the same "or less" which is why I asked which investments - I still think you'd be struggling with an equity investment to be lower than 2009.

6022tivo wrote: »

I have had a look at previous stock investments I made in 2008 and 2009, both are the same, or less that the 4k I put in each????