Are cash ISAs worth it for 2014/2015 tax year?

lisyloo

There is an element of gambling in all investment but then there is in locking cash in an account yielding 3% for 5 years!

It's different types of risk which may ot maynot be acceptable for some people.

Investing often involves capital risk.
Saving involves shortfall risk.

Neither a good/bad it's simply what's appropriate.
I don't consider myself a risk averse person in general but I don't find capital loss acceptable for my mortgage pot, whereas it's acceptable on my pension fund.

FatherAbraham

lisyloo wrote: »

I don't consider myself a risk averse person in general but I don't find capital loss acceptable for my mortgage pot, whereas it's acceptable on my pension fund.

Interesting, What's a mortgage pot?

You mentioned paying the mortgage off in five years -- are you saying that you've got a cash-deposit which is earning more than your mortgage interest, after tax?

Warmet regards,
FA

jimjames

pip895 wrote: »

You asked about losses! -

Glad someone understood!

2010 wrote: »

Did you read post 21.

I don`t know what S&W G F has to do with anything, you`ve lost me.

As already mentioned you asked about losses so I gave an example of a loss.

Post #21 doesn't give any explanation for my previous question about your situation so can you explain it? If you are happy dealing with shorting shares why not use a S&S ISA which can be any point on the risk spectrum that you want.

I can understand someone who doesn't want to learn about S&S because they think it is too risky but for someone doing shorting (which I've never looked into myself) I'm struggling to understand the logic sticking to cash now. If you got your fingers badly burnt with losses then that may be due to shorting not due to investing in S&S.

lisyloo

What's a mortgage pot?

Some money that's mentally put aside for mortgage repayment.

are you saying that you've got a cash-deposit which is earning more than your mortgage interest, after tax?

Yes.
My mortgage deal is BOE+0.49% with First Direct (0.99%).
Most of the cash is in FD ISAs which is earning 2% tax free.
Some of it is in NS&I index linkers and has made about 3.6% tax free (that will go down).

At the moment I'm making about £1300 per annum profit due to not paying down the mortgage, but the profit has been higher in previous years.

I'm not interested in gambling with that money, which doesn't mean I'm risk averse - just that the mortgage money is in a different category to spare money I can afford to lose.

2010

jimjames wrote: »

Post #21 doesn't give any explanation for my previous question about your situation so can you explain it?

I'm struggling to understand the logic sticking to cash now.

Let`s just say I made it and they`re not getting it back!

Nick_C

guitarman001 wrote: »

I hear too many stories like this... I put in so much and am now up 18% - let us know what you invested in! It doesn't mean we'll invest in the same but it's good to hear what got you the return in the first place. Unfortunately my experience of buying shares has always lost me money, and not inconsequential amounts, either. (Now I mainly stick to trackers).

For what its worth, I bought Rio Tinto, Shell, Severn Trent, United Utilities, Cable & Wireless and Chesnara for my S&S ISA. I sold C&W and Rio Tinto this month and bought Morrisson's and HSBC.

My S&S ISA is up 17% since August, the FTSE100 is up 6% and the FTSE250 is up 11%

Note however that my S&S ISA is just part of a larger portfolio. I hold shares in 32 companies covering a wide range of sectors.

My strategy has been to mainly invest in companies that I know something about, that have continued to make healthy profits through the recession, that provide goods or services that we all need (directly or indirectly), and that pay good dividends that are covered by earnings. The average consumer would probably recognise 22 of my 32 companies, or their products.

I prefer to make my own investment decisions, and spend 2 or 3 days a month doing research. Its become an interesting hobby. Trackers are all very well, but by definition they will only pay an average rate of return. Overall, I'm 16% ahead of the FTSE100 and 27% ahead of RPIx inflation. I've invested money in managed funds in the past through insurance based savings plans, and have been disappointed with the returns.

About 75% of my liquid assets is in shares. If I had to sell up today, I would lose money on 5 stocks, break even on 4, and gain on 23. (Ignoring dividends). To date I've only lost money on Bradford & Bingley which I gambled £500 on a couple of weeks before they went bust.

Although I would be sitting on a very nice profit if I sold up right now, my intention is to keep this money invested and supplementing my pension through dividends for the rest of my life, returning the capital to my partner when I eventually shuffle off this mortal coil. If the markets crash and I'm sitting on a paper loss at some time, i'm not too worried as long as the dividends keep coming in. So as long as the oil companies, supermarkets, transport companies etc continue to make money, I should be ok.

FatherAbraham

lisyloo wrote: »

My mortgage deal is BOE+0.49% with First Direct (0.99%).
Most of the cash is in FD ISAs which is earning 2% tax free.
Some of it is in NS&I index linkers and has made about 3.6% tax free (that will go down).

At the moment I'm making about £1300 per annum profit due to not paying down the mortgage, but the profit has been higher in previous years.

Congratulations! Your interest-rate bet has really paid off.

lisyloo wrote: »

I'm not interested in gambling with that money, which doesn't mean I'm risk averse - just that the mortgage money is in a different category to spare money I can afford to lose.

Fair enough (although "gambling" is a little harsh). I find that taking my future likely income stream from employment into account helps me accept more risk on investments which are needed to meet debt liabilities in the future.

Warmest regards,
FA

A_Flock_Of_Sheep

I hold the much cliched and acclaimed Vanguard Life Strategy fund on here and it's the worst performer in my portfolio. A total doozie.

It has languished at a loss of -4% for ages - now sitting at -0.13%.

Conversely MIDD is currently up over 5% although that was down in the red for a while.

I think we all have had losses. I am possibly foolishly thinking of entering into the mining sector with something like BRWM and another I can't think of off the top of my head. Anyone else considering that sector to diversify?

chucknorris

It had crossed my mind to put my full ISA allowance into a SS ISA this (next tax) year but for now I think I'll carry on building up my cash ISA, not for what they pay now but for what they might pay in later years. But my cash holding is only a small part of my overall portfolio:


64% property
16% shares
12% pension
8% cash

Nick_C

A_Flock_Of_Sheep wrote: »

I am possibly foolishly thinking of entering into the mining sector with something like BRWM and another I can't think of off the top of my head. Anyone else considering that sector to diversify?

I have a few shares in RIO and BLT, which I'm holding in the hope of future growth.

Small mining companies can be a roller coaster ride. I made a highly speculative purchase of £1000 worth of Avocet Mining on 23/1/13 (1500 shares at 66 pence per share). By 9 July, the price had dropped to 7p a share, and I was sitting on a loss of almost 90%. I decided to go double or nothing (I was firmly in gambling mode on this one) and bought a further 16000 shares (for £1118). I sold the lot on 16 August at 20.7 pence, ending with a profit of £1500 on my £2K gamble. I could easily have lost the lot though. I think Rio Tinto and Billiton are much safer. They are not giving me the income I would normally seek, but they are giving me diversity.