Success of your S&S ISA?

IndigoBlue_2

Hi Everyone,

First of all - apologies if this is in the wrong section, I know there are certain people on this forum who are a stickler for rules and if this in the wrong place - mods feel free to move it.

Now,

I currently have a Cash ISA, not particularly amazing interest given the current inflation rate. I am tempted to move some of my money and also start putting more into a S&S ISA but honestly I don't know much about it and the risks it involves.

Can you kind people who currently have your stocks and shares ISA post your experiences, good or bad, how much profit you've made in the past 3 years and anything else that might be relevant

Thanks,

IB

Loughton_Monkey

Given the huge range of funds that people can invest in, this is not a particularly constructive question. If you look at:

http://citywire.co.uk/new-model-adviser/fund-and-fund-manager-performance/home.aspx?CitywireSuperClassScheme=Unit-Trusts

... you will see that the 'average' for North American Smaller companies was +60% over the last three years. Had someone invested in Property, on average, they would have lost 5%.

I have a mixed bag of S&S ISA funds. In a very bad year (2008) they can lose around 25%. In a good year (2010) they rose about 18%. But I switch funds from time to time.

IndigoBlue_2

As aforementioned, I don't know much about it so while you may not think it's a constructive question, it is to me and I welcome further replies from people.

jem16

IndigoBlue wrote: »

Can you kind people who currently have your stocks and shares ISA post your experiences, good or bad, how much profit you've made in the past 3 years and anything else that might be relevant

Thanks,

IB

Is there any particular reason you mention 3 years?

S&S ISAs are not so simple to compare as there are thousands of funds that can be placed inside the wrapper and how much you make or lose is down to the choice of funds that you make.

The success of the investment is also down to the length of time you are invested. Three years would normally be considered too short a time scale as there is not much time to iron out the ups and downs.

dunstonh

The problem is that investments zig zag in value and you have to look at them over a typical cycle so you ensure you see the good years, the bad years and the nothing years. By choosing just 3 years you are getting nothing like a cycle. For example, in most areas of investment you would be looking at one fairly bad year, one recording breaking growth year and a fairly good growth year.

Also, ISAs carry no risk. The investments you place in the ISAs carries the risk. You can have around 50,000 different investments inside an ISA. And then an infinite variation of these. The results of someone who went randomly gung ho into a very high risk investment and got lucky cannot be compared with a low risk investor taking a more steady and cautious approach or any other type.

IndigoBlue_2

jem16 wrote: »

Is there any particular reason you mention 3 years?

S&S ISAs are not so simple to compare as there are thousands of funds that can be placed inside the wrapper and how much you make or lose is down to the choice of funds that you make.

The success of the investment is also down to the length of time you are invested. Three years would normally be considered too short a time scale as there is not much time to iron out the ups and downs.

No particular reason. Just looking for everyones own story on them. What's your story?

IndigoBlue_2

dunstonh wrote: »

The problem is that investments zig zag in value and you have to look at them over a typical cycle so you ensure you see the good years, the bad years and the nothing years. By choosing just 3 years you are getting nothing like a cycle. For example, in most areas of investment you would be looking at one fairly bad year, one recording breaking growth year and a fairly good growth year.

Also, ISAs carry no risk. The investments you place in the ISAs carries the risk. You can have around 50,000 different investments inside an ISA. And then an infinite variation of these. The results of someone who went randomly gung ho into a very high risk investment and got lucky cannot be compared with a low risk investor taking a more steady and cautious approach or any other type.

I see. Thanks for the input. How long do you expect to have one of these accounts for then and what sort of return can you make, and on what timescale? Just a ballpark figure, I don't really want a how long is a piece of string answer. How long have you had yours for example, and what sort of return have you made?

Biggles

IndigoBlue wrote: »

How long do you expect to have one of these accounts for then and what sort of return can you make, and on what timescale?

As dunstonh has tried to explain, an ISA doesn't make you a penny. It's the investments you choose to buy and sell within the ISA that either make (or lose) you money. All the ISA does is protect you from taxation on your profits.

As regards how long you have one, you have it indefinitely; the more your funds increase within it, the more you will need it.

I think you need to look at the subject of stocks & shares first and get to grips with what's involved, and only start thinking of ISAs when you know what you want to invest in.

jimjames

I've just checked my S&S ISAs over the last 3 years, the return is around the 20-30% per year over that time. However that is an exceptional time period to consider as it includes the drop and subsequent recovery of one of the biggest stock market events of the last 70 years.

jem16

jimjames wrote: »

I've just checked my S&S ISAs over the last 3 years, the return is around the 20-30% per year over that time.

Are you saying you have made 20-30% each year for the last 3 years? So a total return of 60-90%?

jimjames

jem16 wrote: »

Are you saying you have made 20-30% each year for the last 3 years? So a total return of 60-90%?

Yes but that is an exceptional period with the recovery from such low points. Clearly choice of funds/shares makes all the difference and that did include some very risky choices in that time. eg Candover Investment trust bought at 90% discount to NAV at £1.40, sold at £3.40 but now £6 so holding on would have almost doubled again.

Even just being in the FTSE 100 from low point (3500) to current level (6000) would give 70% increase plus dividends.