Opening stock and shares ISA info

bigadaj

ChopperST wrote: »

What if the op holds 100% equity at year 9 and the market crashes 50%?

Or year 19 presumably?

My impression of the OPs response to the how long question is a significant length of time, of the order of ten to twenty years. If there is a specific target then fine, work to that, if not then a single long term strategy is as good as any. Reviewing things every couple of years and potentially moving to lower risk/ volatility asset classes as a realisation events becomes more likely.

With the current problems with low returns, particularly on low risk asset classes, there are no doubt many people at an advanced age well into drawdown who quite sensibly have a large proportion of their assets in equities. Unless there isa. Specific purpose at a particular time then a high proportion of equity investment makes sense for many people, if they can stomach volatility. Still ongoing review to identify performance and amendments to target is always sensible.

bigadaj

innovate wrote: »

Yes and no- it is not that simple. For example:

You hold £6,000 worth of Vanguard LS at CS - costs £15 a year. The same at HL costs £48 a year.

You hold £100,000 worth of Vanguard LS at CS - costs £250 a year. The same at HL still costs £48 a year.

The break point is £20K, which is less than 2 years ISA allowance. It may or may not make sense to start out with the cheapest and review / move later. Moving will undoubtedly incur some costs and might involve being out of the market for a while - might be good or bad.

It seems pretty obvious though that the likes of CS are hoping people won't move once they get to £20K.

The above are the present charges - HL will soon have to publish their post-RDR charges and things might look different then.

With the OPs current envisaged contribution then Csd looks a reasonable option. They also have no explicit charge for transferring out, which is something that I'm particularly conscious of at the moment. Same for cavendish whereas hl have a £25 charge per fund, I'd avoid hl until they confirm their post rdr2 charges, if for no other reason than it is a pretty cynical attempt to delay rather than be proactive.

bowlhead99

ChopperST wrote: »

What if the op holds 100% equity at year 9 and the market crashes 50%?

If the OP is holding 100% in equities and has a one year timescale for needing to get it back to spend it, they would of course need to consider whether they should still be in that allocation. Thanks to potential growth they could experience in the first 9 years, they may find they only need a small part of it the next year, and might prefer to continue to hold it all, or the majority of it in equities for another five to ten to fifteen years plus.

There's nothing wrong with refining your objectives as you go along once you know more about what you want and have some goals to aim for. As a general rule if you don't know what you're aiming for but you can afford to take risk (because you don't have any need or intention to cash out until the market has time to get to a better place), you can afford to be in equities.

One thing worth considering on timescales is that if you're investing for say 10 years by putting money in monthly, by the end of it, your first pound has been at work for 10 years but your most recently invested pound has only been in for 10 minutes. On average, your pounds have only been at work for five years, which is why people say you might look at lower risk options for 10 years compared to 20, even though 10 years sounds like ages.