Scottish Widows stocks /shares ISA - help!

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
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mbreeze102mbreeze102 Forumite
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edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
Hello all,

I have about £20,000 in a Scottish Widows stocks and shares ISA, dominated by a progressive/stockmarket fund which includes about 47% UK equity, then about 37% global.

The last couple of days, the total value has nudged up a little, but today it's gone down a little. Perfectly normal stuff of course, but I'm wondering the likelihood of the whole thing being about to sink like a stone? I can't afford to lose a whole load of savings, and for a while now I've been wondering if the progressive fund is really for me these days (it's over 10 years old). But if I'm going to withdraw the stockmarket side of the fund (about £14,000), should I do it now?

I know it's probably one for the Crystal Ball department, but any help greatly appreciated!

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  • dunstonhdunstonh Forumite
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    I can't afford to lose a whole load of savings, and for a while now I've been wondering if the progressive fund is really for me these days (it's over 10 years old). But if I'm going to withdraw the stockmarket side of the fund (about £14,000), should I do it now?

    Last Autumn, the stockmarkets fell by around 20%. How did you feel when that happened?

    Financial Crisis occur on average every 7 years. There have been 9 since 1956. Stockmarket crashes happen periodically. Typically, relatively frequent corrections of around 10% and periodical 20% crashes. So, you know these things happen. The only thing you dont know is when.

    You have held this fund for over 10 years. You have gone through one major financial crisis and a massive stockmarket crash (typically the size of once in a generation level) and about 3 crashes in excess of 20%. So, what has changed now to make you worry about it all of a sudden?
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • mbreeze102mbreeze102 Forumite
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    dunstonh wrote: »
    Last Autumn, the stockmarkets fell by around 20%. How did you feel when that happened?

    Financial Crisis occur on average every 7 years. There have been 9 since 1956. Stockmarket crashes happen periodically. Typically, relatively frequent corrections of around 10% and periodical 20% crashes. So, you know these things happen. The only thing you dont know is when.

    You have held this fund for over 10 years. You have gone through one major financial crisis and a massive stockmarket crash (typically the size of once in a generation level) and about 3 crashes in excess of 20%. So, what has changed now to make you worry about it all of a sudden?

    Thanks very much for the reply. I'm worried now, because all this upheaval feels so unprecedented, and I literally have no idea how far a fund like this can potentially sink.
  • jimjamesjimjames Forumite
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    mbreeze102 wrote: »
    Thanks very much for the reply. I'm worried now, because all this upheaval feels so unprecedented, and I literally have no idea how far a fund like this can potentially sink.

    Have you checked value again? Almost certainly it is now worth more than last week. If you aren't able to sleep without worrying then S&S investment isn't for you but imagine if you weren't able to check the value and then looked again in 5 years and it was 50% up. Would that be more acceptable?
    Remember the saying: if it looks too good to be true it almost certainly is.
  • mbreeze102mbreeze102 Forumite
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    jimjames wrote: »
    Have you checked value again? Almost certainly it is now worth more than last week. If you aren't able to sleep without worrying then S&S investment isn't for you but imagine if you weren't able to check the value and then looked again in 5 years and it was 50% up. Would that be more acceptable?

    Hello! Thanks for the reply. Yes indeed, I've been checking every day (!) and the value has gone up. So why is that? And yes, I see what you mean about the long-term mindset.
  • jimjamesjimjames Forumite
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    mbreeze102 wrote: »
    Hello! Thanks for the reply. Yes indeed, I've been checking every day (!) and the value has gone up. So why is that? And yes, I see what you mean about the long-term mindset.

    Two reasons, the UK stock market has bounced back and also the drop in the value of the pound means overseas investments are now more valuable. It really does show though that worrying on a day to day basis isn't productive - if you'd panicked and sold then you'd have a loss but waiting would have you more than back to last week.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • edited 1 July 2016 at 10:58PM
    mbreeze102mbreeze102 Forumite
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    edited 1 July 2016 at 10:58PM
    jimjames wrote: »
    Two reasons, the UK stock market has bounced back and also the drop in the value of the pound means overseas investments are now more valuable. It really does show though that worrying on a day to day basis isn't productive - if you'd panicked and sold then you'd have a loss but waiting would have you more than back to last week.

    Thank you! I think I'd assumed that this crisis was guaranteed to send the value plummeting. Interesting to see that this is not necessarily so.
  • dunstonhdunstonh Forumite
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    mbreeze102 wrote: »
    Thank you! I think I'd assumed that this crisis was guaranteed to send the value plummeting. Interesting to see that this is not necessarily so.

    It is important you do not treat media coverage is reality. When the media uses terms like plummet or soar to cover negative events it is usually nowhere near as bad as they make out. You often hear things like "the worst since records began". However, frequently those records may only have been going a short period.

    Also, negativity in one area does not mean it affects all areas.

    Brexit is a financial crisis but these happen. Very frequently in investment terms. You know they are going to happen. you dont know when or the extent. You dont know what impact they will have. Sometimes little or no impact.

    You should not look at investments on a daily basis. They are long term and they zig zag in value. Looking at them daily is a recipe for sleepless nights and bad behavioural decisions.

    That said, you dont sound like someone who is invested within their risk profile. You are over 80% equity which is high risk. Risk is not on/off. It is a sliding scale. Your comments suggest you may be too far up that scale and maybe you should consider adjusting the holdings to fit you on the scale.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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