Have I just blown my money? 28 January 2014 at 8:40PM edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings 14 replies 1.8K views

Atkins

Hi everyone,
I have only been saving for the past few years after being a bit of a money waster for most of my life. I had a few grand saved up and over the course of a couple of days decided I was going to invest it. So I opened a S&S Isa and bought some funds. Now I'm bricking it thinking I'll lose all my money. I did some research before I stumped up the cash and the funds I bought looked promising to my untrained eye.
A week or two later and I'm already £40 down. I know these things are long term investments but I can't help checking to see if my money is growing. It's not. Will I have to wait a certain amount of time before I start to see any sort of return on my investments?:huh:

[Deleted User]

Atkins wrote: »

A week or two later and I'm already £40 down. I know these things are long term investments [...] will I have to wait a certain amount of time before I start to see any sort of return on my investments?

If you "know" that they are long term then you shouldn't worry about the day to day or week to week because it doesn't mean anything. You might be down £20 this week or you could be up £50 this week, either way it does not indicate what performance might be in 5 or 15 years, so it's really not worth worrying about.

For example, take a look at Google's 5Y performance:



If you had bought on January 1st 2010 and then decided to check the price every week you would have been crying yourself to sleep by July over the 20% loss, but if you'd just left them as they were until January 2014 you'd be up over 100%!

Atkins

Aye, that's what I thought. I'm very new to this and find it a bit nerve wracking, as I've never had money before and don't want what little I have to go down the drain. Thanks for the re-assurance/advice. I'll stop checking every 5 mins.

sorcerer

I agree you don't need to worry, if you have a longer term view of the markets 10-20 years. A few % loss is nothing. All I would say is just keep an eyes on your costs overs the years. To make sure your not paying too much for your platforms.


And also maybe think about putting some in a Pension as well, you can get 20 or 40% more from the government in a SIPP. Or free money from your work to put into a Work Pension.

bonzer

I dumped my first load of investment cash into the markets at the height of dot-com in 2000 and then had the same panic of watching it fall. However these days my investment is doing OK.

You don't want to watch the markets day to day, it'll drive you mad. However do keep an eye on the fund charges every now and again which have a mysterious habit of creeping upwards.

You may find this popular investing blog useful:

http://monevator.com/

I'd highly recommend the "essential reading" and "better investing" stuff down the right hand side.

dunstonh

A week or two later and I'm already £40 down.

If you are worried about £40 in a couple of weeks then you are not ready to invest.

I know these things are long term investments but I can't help checking to see if my money is growing. It's not.

How do you know its not growing. You measure the quality of investments over an economic cycle (8-10 years). Not two weeks.

Will I have to wait a certain amount of time before I start to see any sort of return on my investments?

You need to be prepared for 5-10 years.

jimjames

Atkins wrote: »

Aye, that's what I thought. I'm very new to this and find it a bit nerve wracking, as I've never had money before and don't want what little I have to go down the drain. Thanks for the re-assurance/advice. I'll stop checking every 5 mins.

You could always add more to buy at these lower prices?

It does sound like you might prefer to invest monthly so you aren't so worried about a drop in the money you've added.

It is only natural to be concerned when investments drop but that is what happens from time to time. I wish it had only been £40 I was down back in 2008/9 but it was 1000x that - that can cause some worry!

Atkins

Thanks everyone,
I wasn't planning on spending this money anytime soon so I'll just leave it for a few years and see how it gets on. I was expecting to see a change of a few quid up or down, not £40 in a few weeks. £40 a week for 5 years doesn't leave me with much money left. Like I said I'm totally new to this, I'm finding it interesting but slightly worrying as I seem to have little control over what happens from now on.
Cheers for the advice/links etc

jamesd

Atkins wrote: »

I had a few grand saved up and over the course of a couple of days decided I was going to invest it. So I opened a S&S Isa and bought some funds. Now I'm bricking it thinking I'll lose all my money. I did some research before I stumped up the cash and the funds I bought looked promising to my untrained eye.
A week or two later and I'm already £40 down.

Welcome to the world of ups and downs that is investing. My first fund purchase dropped by 10-15% a few weeks after I purchased it, as part of a market drop.

The small drops we've seen in the last week or two are a good learning experience, though if you say which funds you're using we might say a bit more about those specifically.

Atkins wrote: »

Will I have to wait a certain amount of time before I start to see any sort of return on my investments?:huh:

Not a set amount of time but it's a bit like a rollercoaster in reverse. After a while it becomes less likely that the drops will be bigger than the growth accumulated so far. Of course they are still drops compared to the previous week, but at least they don't go below the purchase price any more.

dunstonh

Atkins wrote: »

Thanks everyone,
I wasn't planning on spending this money anytime soon so I'll just leave it for a few years and see how it gets on. I was expecting to see a change of a few quid up or down, not £40 in a few weeks. £40 a week for 5 years doesn't leave me with much money left. Like I said I'm totally new to this, I'm finding it interesting but slightly worrying as I seem to have little control over what happens from now on.
Cheers for the advice/links etc

The last couple of weeks have been a minor decline. Insignificant in the scheme of things. How would you react on a 25%-45% loss? You will get losses of this scale at some point. its not a case of if but when.

Money-Saving-King

dunstonh wrote: »

The last couple of weeks have been a minor decline. Insignificant in the scheme of things. How would you react on a 25%-45% loss? You will get losses of this scale at some point. its not a case of if but when.

You've probably just given the op a nervous breakdown!