Changing ISA... current one losing money!

erine

Husband opened ISA with lloyds TSB (to do with Scottish widows) about a year ago. He put £7000 in and we now have £6800 in there. Neither of us know anything about money stuff... I havent even got a bank account. Basically as soon as the bank found out we'd inherited a lump sum last year they phoned us and got hubby down there. He was told this ISA was a low risk one but that it may fluctuate as it was wrapped up with shares.... We wanted to have an ISA to try to make the best of our money not lose it. We were wondering if maybe we'd be better to change banks or something and wondered whether it may be better if I took the money off hubby and opened a new isa somewhere... we've absolutely no idea what it all means tho'. Would be very grateful for any advice.

Aegis

If you started with £7000 a year ago, I'd think you must have been in fairly poor investments to have lost money, even considering the recent correction...

The trouble is that what I do is self-select the funds I'm in, and if you know nothing about investing, that option probably won't appeal much to you! It might be worth asking if they have any funds that work specifically with gilts or bonds, as those are (if I remember correctly) pretty much the most stable investment other than cash that you're likely to get in an ISA. it also might be worth shopping around.

If you're really unsure what to do, it might be worth contacting a local IFA and asking him if it would be worth your while coming in for a chat. I don't know what the smallest amount they would be prepared to deal with is, but it's worth asking!

dunstonh

If you started with £7000 a year ago, I'd think you must have been in fairly poor investments to have lost money, even considering the recent correction...

Fixed interest has suffered badly and that may be what Lloyds put their money in if it was cautious.

as it was wrapped up with shares

but that suggests stockmarket which is medium/high risk.

I don't know what the smallest amount they would be prepared to deal with is, but it's worth asking!

Its a quick and simple transaction and many will re-register it without charge in a better spread. Some may charge though although it will be less than Lloyds did.

JM_2

erine wrote: »

Husband opened ISA with lloyds TSB (to do with Scottish widows) about a year ago. He put £7000 in and we now have £6800 in there. Neither of us know anything about money stuff... I havent even got a bank account. Basically as soon as the bank found out we'd inherited a lump sum last year they phoned us and got hubby down there. He was told this ISA was a low risk one but that it may fluctuate as it was wrapped up with shares.... We wanted to have an ISA to try to make the best of our money not lose it. We were wondering if maybe we'd be better to change banks or something and wondered whether it may be better if I took the money off hubby and opened a new isa somewhere... we've absolutely no idea what it all means tho'. Would be very grateful for any advice.

Hi,

Bank Managers are not the best for Investment Advice.

Funny how they recommend their own funds.

btw, Buying funds is like buying cars. They lose money from the first day. That's because of their initial charge.

There after they have an annual charge.

That is why you will hear people say that they are long term investment. They take time to recover from the first initial charge hit.

JM_2


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JM_2

Aegis wrote: »

If you started with £7000 a year ago, I'd think you must have been in fairly poor investments to have lost money, even considering the recent correction...

The trouble is that what I do is self-select the funds I'm in, and if you know nothing about investing, that option probably won't appeal much to you! It might be worth asking if they have any funds that work specifically with gilts or bonds, as those are (if I remember correctly) pretty much the most stable investment other than cash that you're likely to get in an ISA. it also might be worth shopping around.

!

More losses are made in Bonds and fixed interest securities than equity investments.

When interest rates are going up the value of bonds and fixed interest securities go down.


So take care when investing in these funds.


Here is an interesting article

http://www.londonstockexchange.com/en-gb/pricesnews/education/interchange/Authors/justinurquhartstewart/bondmarketmassacre.htm

Bond Market Massacre






By Justin Urquhart Stewart 15/06/2007
Much blood has been shed in the bond markets over the past fortnight.




Investors were treated to a selling frenzy leading to a dramatic rise in yields on long bonds across the globe. Government bond yields in the UK, Europe and US set forth with great gusto to break multi-year record highs. At the end of a traumatic week, the yield on the US 10-year Treasury rose to 5.3% - a five year high, while the rate on 10-year Gilts shot up to 5.5% - the highest level for seven years.

---

JM_2





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JM_2

Hi,


Just to add that when you sell a fund you suffer a further hit - An exit charge. You have to deal at the managers exit price - Bid price.

This article explains more :

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/07/16/cmprop16.xml


Are property fund investors rushing for the exit?



Last Updated: 1:47am BST 17/07/2007





Lurid headlines about panic-selling do not tell the full story, says Paul Farrow
The revelation that New Star has raised the cost of exiting its commercial property fund triggered headlines that investors were "panic-selling" amid warnings that the sector has peaked.
New Star, which has been heavily promoting property for the past three years, has temporarily increased the cost of exiting its fund by 4 per cent - but it has not acted alone. Property fund investors with Norwich Union, Prudential, M&G and Standard Life will now have to pay between 4 per cent and 7 per cent of the value of their investment to exit the fund.



Click above link to read the full article.

JM_2


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JM_2

Another article :

http://www.cashquestions.com/forum/showthread.php?p=24918


JM_2



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Aegis

JM_2 wrote: »

btw, Buying funds is like buying cars. They lose money from the first day. That's because of their initial charge.

There after they have an annual charge.

That is why you will hear people say that they are long term investment. They take time to recover from the first initial charge hit.

I'm invested in 7 funds. Only one of them has had any form of entry cost, in the form of a buy/sell spread, and all of them have reduced annual charges.

By investing the right way you can really save quite a bit of money!

dunstonh

Most of the funds I use have no initial charge now. There are still the odd ones with 0.25% or 0.5% and a few with 1-2% but increasingly it is 0%.

Buying funds from a bank is just wasting money. Eggs all in one basket and you pay more for it.

jamesd

erine, please say more about what the investments inside the ISA are. Saying how and where you check the value and what you look for would help.

It's entirely possible to transfer the investments to a different stocks and shares ISA provider using a transfer form. Better if it's not a bank, though, because they do tend to have high charges and a limited selection of investments. With a specialist stocks and share ISA provider like Hargreaves Lansdown it's easy enough to change the investments and the cost is minimal, likely to be no more than 17.50 if you changed 7,000 worth (assuming the common 0.25% charge).

erine

Embarrassing moment..... Sorry guys I was wrong about us losing money, but thankyou so much for all of your help. OH had neglected to tell us that we had paid £250 for the man from Scottish Widows to buy our shares for us.... or something. Have just been looking at the contract of purchase and we actually bought £6755 worth of shares initially and were charged the rest of the £7000. I really don't understand any of this but apparently we have a Momentum Income Portfolio Shareclass A accumulation. The only way we check our balance is by looking at our online bank statement. I think maybe with knowing so little about everything we might be best to leave the money where it is. I do have another £1000 to invest though .... any ideas what might be best?