FTSE All-Share tracker ISA VS Index-linked Savings Certificates over next 3 years...

ManAtHome

Could always put half in each...

Very confusing outlook on all fronts at the moment (well it is for me...)

Inflation could go either way, even in the short term. Energy rises will drop out, but petrol and food seem to have been going up quickly over the last couple of months. Even then, stated RPI seems low (to me) for anyone on less than average pay with a mortgage.

FTSE doesn't look over-valued to me either, but is being propped up a bit by private equity (cheap money) and seems to very quickly get the "spooks" (eg China, which is a relatively small market trying to put the brakes on).

Economic conditions may be benign in global terms, but I feel the UK has massive structural problems mainly due to personal and government debt (including off-balance-sheet pension and PFI liabilities).

Option (C) Personal jet-pack and an AK47...?

[edit] I didn't find it weird either - reasons as above.

moneylover

EdInvestor wrote: »

The IUKD exchange traded fund tracker would enable you to hedge your bets a bit.It tracks the UK high yield index of shares which pay high dividends. So after charges, it pays you a dividend of around 4% a year, plus hopefully capital growth as well.A good bet if you are willing to extend for 5 years in the event of any problems.

The "Iplan" ISA from https://www.selftrade.co.uk is a good way to invest in the IUKD, enabling you to reinvest the dividend income at no charge, paying only the annual 25 quid ISA fee.

If dividends are re- invested then there are no income tax implications for higher rate tax payers when money is withdrawn, only a capital gains possibility? I have never bought a tracker but would like to invest the ISA money I still have available this year over and above the cash ISA allowance. And, another possibly silly question - how do you know a good moment to get in (or out)? Does it just mean watching the main FTSE indexes? Thanks in advance for any enlightenment!

jem16

moneylover wrote: »

If dividends are re- invested then there are no income tax implications for higher rate tax payers when money is withdrawn, only a capital gains possibility?

Dividends still have to be declared annually on your tax return and the extra 25% tax paid whether or not the dividend is re-invested.

[Deleted User]

Mr_Mumble wrote: »

I found the query intriguing rather than weird btw!

Thank you :beer: - I thought it was an interesting question too! Some people have no imagination. :rolleyes:

Stock market vs index linked savings certs over next 3 years ...

Which would you choose? - Simple question.. not a wierd one.

[Deleted User]

baby_boomer wrote: »

It seems a weird choice to me.

A short term punt on the stock market as opposed to the safest investment available to man?

You need to ask yourself more questions.

You need to learn some manners :rolleyes:

baldbloke_2

Deleted_User wrote: »

You need to learn some manners :rolleyes:

That seems a little harsh.

On a personal note I have struggled to find a balance between various forms of savings/investment over the past couple of years as my 'pot' has grown. Am I wasting potential growth by playing safe? Yes! Am I prepared for actual loss of capital if I get the timescale wrong? No! And a look back over the past 10 years shows the enormous fluctuations that can occur in fund values year on year. Add in the 'Lump Sum v Monthly Payments' question for even more anxiety!

I have found this conflict unsettling and very worrying over the past 18 months - as someone who never considered investments until I started reading forums such as this. 'Wierd' doesn't seem inappropriate somehow.

I think the advice - 'You need to ask yourself more questions.' - is spot on and something I for one needed to be told time and time again.

If the OP was asking about parts of a balanced portfolio then perhaps the question was ok but as a straight choice for one important sum of money - as it read initially - I think Baby Boomer was correct.

[Deleted User]

baldbloke wrote: »

If the OP was asking about parts of a balanced portfolio then perhaps the question was ok but as a straight choice for one important sum of money - as it read initially - I think Baby Boomer was correct.

It does seem to appear that some have misunderstood my original question slightly; and have made incorrect assumptions about my financial situation. The question was simply a "which would you choose" out of those 2 options.

I already have a healthy "balanced portfolio"; and I am now simply looking for a home for approx £4K. Having already used up my cash isa allowance, the two products I referred to in my original question are worth consideration. They are both tax free products. I find it strange that some have assumed that this was my only sum of money to find a home for; this was not implied at all.

Anyway, I've decided to plump for the NS&I index linked savings certs., as it should produce a reasonably healthy tax free return in 3 years time.

Long live moneysavingexpert.com !! :money: