Stocks & Shares ISA Question

colinjd

Hi all,

I recently used up my 2012/13 ISA allowance by opening my first Stocks & Shares ISA and I'll be looking to do the same for 2013/14. My question relates to portfolio content and how often to consider making changes.

I'm aware of the fact that S&S ISA's need to be looked at on a much longer period of time and I'm fine with that, but how often would people suggest taking a detailed evaluation of the portfolio and how it's performing? Every 3 months...6 months...longer?

I wouldn't want to make too many changes over a 12-month period because of fees etc so what's the general opinion overall?

Thanks

Reaper

There is no right answer to that. Investors range from day traders who might hold stock for just days up to those who invest and forget about it.

It will depend largely on what you have invested in. If it is a few volatile shares you probably need to keep an eye on them frequently, if a defensive fund then annually might be enough.

But just because you review it at that point does not mean you have to buy or sell. Only if you think it has peaked and you want to get partially/fully out, it is doing poorly and you see no prospect of a turnaround, or you want to rebalance it.

donniej

You didn't mention what you were invested in - shares direct, ETFs, Investment Trusts, funds...?

The key here is the dealing fees - it'll cost you money to buy/sell or switch investments, but the amount depends on what you invested in. In most cases, funds don't have any dealing fees, so you can trade them as often as you want for free (this will depend on who you bought them with.) Shares, ETFs and ITs all have dealing charges, so you won't want to trade on them too often as the trading costs will eat into your returns and probably not worthhwile (unless you have a very large amount invested.)

There are 2 things you can do when reviewing:
1. review investments: make sure you're still invested in the right things, and change them if not
2. rebalance: this is where you reset your investement allocations to what they were when you started (e.g. 45% UK equity, 25% gilts, etc. etc.)

There is quite a lot of diverse views on how often to rebalance - Vanguard did a study and found that the best was to rebalance every 6-12 months, when the asset allocations are out by 5%+

Robert99

Worth having a look at https://personal.vanguard.com/pdf/icrpr.pdf

But the summary is

As our analysis shows, the risk-adjusted returns are not meaningfully different whether a portfolio is rebalanced monthly, quarterly, or annually; however, the number of rebalancing events and resulting costs increase significantly. As a result, we conclude that a rebalancing strategy based on reasonable monitoring frequencies (such as annual or semiannual) and reasonable allocation thresholds (variations of 5% or so) is likely to provide sufficient risk control relative to the target asset allocation for most portfolios with broadly diversified stock and bond holdings.

....or a shorter summary, annually.

Doshwaster

I tend to do a very quick review once a month but that's mainly to check that my regular payment has gone in correctly and everything is ticking over properly but only do a full review every 6 months or so. That's when I may consider switching money between funds or into new investments.

If you find yourself logging on every day to check the value of your investments then you need to take a step back and relax.

colinjd

Thanks for all the replies yesterday.

I realised once I'd posted that it was one of those 'How long's a piece of string?' questions and I'd not provided much info to help, but thanks anyway.

To give you an idea, I was in a relative rush to use my allocation before today's deadline and therefore didn't balance the portfolio as well as I might have done:

All funds through an HL Vantage ISA
UK Small Caps Equities - 29%
Global Equities - 27%
European Equities - 27%
Ethical Equities - 17%

My intention is to use the new ISA allowance to balance things up a little more with some different products. I am also beginning the process of moving a few deferred pensions into a new SIPP, whilst leaving a final salary one where it is, where I'll probably go with one of the Vanguard products. I've been reading the long thread about them, so thanks to everyone that's contributed there.

I'm very late to the table with regards to ISA's of all types and am trying to make up for lost time, hence my original question regarding reviewing portfolios, but I'll soon learn to be patient.

Cheers

bigfreddiel

colinjd wrote: »

I was in a relative rush to use my allocation before today's deadline


didn't balance the portfolio as well as I might have done:

UK Small Caps Equities - 29%
Global Equities - 27%
European Equities - 27%
Ethical Equities - 17%

why did you leave it till the last minute?

what is the strategy behind your portfolio - its all equities?

have you worked out its ecpected growth?

and its volatility?

and what are the annual charges?

you may as well pick a single global index tracker - it will cost less andd perform just as well.

you can thankme next year

fj

badger09

colinjd wrote: »

To give you an idea, I was in a relative rush to use my allocation before today's deadline and therefore didn't balance the portfolio as well as I might have done:

I'm far too new to S&S ISAs to offer any opinion on your portfolio .

You didn't need to rush into anything though. You could have opened your S&S ISA for 2012/13 and funded it before 5th April, but delayed the choice of investments until you had done your research. That's what I've done