Stocks & Shares ISA - how low is low risk?

nekro

I've already got a cash ISA and have been reluctant to put money into a S&S ISA because my father lost a lot of money on his investment.

If I was to invest in a low risk S&S ISA would my return be comparable to a cash ISA?

If so, what does low risk really mean?

dunstonh

If so, what does low risk really mean?

It can mean different things to different people. This is why risk should always be placed in context. An ideal risk scale benchmarks cash as 1. Once you know the upper end of the scale and what that benchmarks to then you can see the risk in context. Some risk scales start at their lowest risk option (not cash). Others may use gilts as the lowest risk.

I've already got a cash ISA and have been reluctant to put money into a S&S ISA because my father lost a lot of money on his investment.

How did he lose money? Anyone that invested before the credit crunch in mainstream investments across most risk scales would be in surplus now. So, either he made withdrawals or he took inappropriate risks or made bad investment decisions.

If I was to invest in a low risk S&S ISA would my return be comparable to a cash ISA?

Different. cash adds interest every year and slowly increases in value (although frequently loses money in real terms after inflation). Investment returns will zig zag with gains and losses and you need to average these out over the long term. You don't know if your first year will be positive or negative or a nothing year. and same for every year going forward after that. Hence why investing is considered long term as you have enough years then to average out the ups and downs. An economic cycle is around 8-10 years nowadays. So, that is an ideal period to be invested.

Prothet_of_Doom

Risk ? I use Google finance to check out the Share Price patterns of companies I think I might buy shares in, and you can actually download 10 years of price information into Excel.
I'm not saying that Shares don't go down, but if you pick wisely, blah blah blah

le_loup

10 years history of BP or RBS would have told you nothing.

Prothet_of_Doom

le_loup wrote: »

10 years history of BP or RBS would have told you nothing.

I bought £1000 of BP shares in 2010, and they are worth 33% more now.
https://www.google.co.uk/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1391445000000&chddm=456139&chls=IntervalBasedLine&cmpto=INDEXFTSE:UKX&cmptdms=0&q=LON:BP&ntsp=1&ei=r5_vUtHQFOeLwAOrcA

Archi_Bald

Prothet_of_Doom wrote: »

I bought £1000 of BP shares in 2010, and they are worth 33% more now.
https://www.google.co.uk/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1391445000000&chddm=456139&chls=IntervalBasedLine&cmpto=INDEXFTSE:UKX&cmptdms=0&q=LON:BP&ntsp=1&ei=r5_vUtHQFOeLwAOrcA

And you would sit on a 33% or so loss if you had bought earlier in 2010, or almost any time since the early 21st century.
http://uk.finance.yahoo.com/echarts?s=BP.L#symbol=BP.L;range=my

p00hsticks

Prothet_of_Doom wrote: »

Risk ? I use Google finance to check out the Share Price patterns of companies I think I might buy shares in, and you can actually download 10 years of price information into Excel.
I'm not saying that Shares don't go down, but if you pick wisely, blah blah blah

for the lowest risk, I'd suggest that you wouldn't look at individual shares at all, but rather trackers and funds

le_loup

Prothet_of_Doom wrote: »

I bought £1000 of BP shares in 2010, and they are worth 33% more now.

So sorry. I hadn't realised that you were brilliant ... or too stupid to understand my point. I wonder which it is?

kidmugsy

If you are new to investing, I recommend you do a bit of homework by reading the reviews/reports from a couple of defensively-minded Investment Trusts.

http://www.ruffer.co.uk/#ruffer/who-we-are/review-archive

http://www.patplc.co.uk/investmentplans.php