What annual % return are people getting (S&S ISA)

veryintrigued

Eco_Miser wrote: »

For long-term buy-and-hold'ers we may never cash out

I understand the dividend 'income' but investing without ever holding the prospect of recouping the bulk of the investment isn't something I'd ever envisage esp on a S&S ISA?. I guess you must be saying that you're investing in the market to pass onwards rather than you taking any loss/gain?

Totally agree with the 'current valuation' language BTW.

AnotherJoe

veryintrigued wrote: »

Are these (fantastic) gains which people are quoting actual/realised gains or paper/internet gains?

Mine are "paper" gains but so what. If you go into investing thinking that your gains aren't real until you take them out and put them under the mattress, you'll never accumulate. . They are just as real as money I might choose to invest tomorrow.

Unless I sold all my shares and turned it into cash (at which point it would be losing money from then on, and I'd be missing out on dividends) all gains are as real as anything. I could sell it all tomorrow, but I need it to keep accumulating so I can drawdown over a longer period than otherwise.

Ray_Singh-Blue

Someone here showed me the XIRR function last year - to work out internal rate of return. It is complicated but worth fiddling around with if you are going to be investing new money or withdrawing any during the year. I copied the example from Excel's help bar and played around until I understood it.

For my ISA, in 2015 rate of return was -6.8%
Between 1/1/16 and 10/12/16 return was 21.9%

Every trade in those 2 years is recorded here

The cash part of the portfolio, which makes up 17% at the moment, is earning 2.09% in a ladder of fixed rate ISAs

george4064

Annualized returns from 1 Jan 2014: 10.75%

YTD to 30/11/16: +0.04%

AnotherJoe

singhini wrote: »

I don't like risk but I'm thinking i should put £10,000 into a S&S ISA next year and see what happens (even if it doesn't perform well I'm guessing it should yield at least 2%).

from what I'm gathering, its not unrealistic for me to achieve an average 2% annually over 5-10 years

Not at all. You could easily lose 25%, In a bad year up to 40%.

You should aim to get much more than 2% over 10 years. Otherwise no point in taking the investing risk.

Broken_Biscuits

About 1% last year and about 15% this year.
Hoping for something in the middle for 2017, but whatever happens the plan stays the same.

bigadaj

veryintrigued wrote: »

These are indeed great figures - I'd be more cautious with language of 'achieving' and 'returns' though until I've actually 'cashed out' though.

Maybe just me.

So cash out now.

The problem is you are swapping future returns that might average inflation plus 3-4% with volatility around that figure.

Your choice.

singhini

AnotherJoe wrote: »

You should aim to get much more than 2% over 10 years.

I'm aiming for >2% PER YEAR (ive either misunderstood you or you have misunderstood me).

AnotherJoe

veryintrigued wrote: »

These are indeed great figures - I'd be more cautious with language of 'achieving' and 'returns' though until I've actually 'cashed out' though.

Maybe just me.

So whats the plan when you "cash out"? Its not a game where you keep a score and it only means something when you cash out.

Once upon a time you bought an annuity, but nowadays you'd just watch your 'stash' gradually decline in value with inflation and drawdown eating it away*

I'm pretty much at a stage where the plan is my drawdown from investments will, in most cases, be only slightly larger than income/growth. Not to accumulate for the sake of it, or to pass on, but to give assurance it will last long enough given inevitable stock market dips over such a long period.

Imagine you had £1M in investments. You could spend £33k a year for 30 years if you put it in cash to start with. Your "cash out" scenario.
Or, at a modest 4% above inflation return rate over the long term, you could spend 5-6% a year, eg £50k-60k a year, and only see it decline at 1-2% a year, outlasting you, and even if the markets didnt always work out giving you a great buffer, in bad times you could drop down to the 3% level.
Being invested would also cushion you against inflation, whereas in the first scenario, your £33k a year would, at the end of 30 years, probably be worth the equivalent of £15k in today's money.

* OK you could buy an annuity. At anything before about age 75, lousy returns, worse than the mooted £33k.

singhini

AnotherJoe wrote: »

Not at all. You could easily lose 25%, In a bad year up to 40%. .

Yep I totally agree. But I'm now willing to take the risk and loose the lot on the £10,000 when I take into consideration the kinds of returns that can be achieved with a S&S-ISA

I just spent the last few hours digging out old paperwork to do with my S&S-ISA and it has grown 103% since 2003

I need to take more risk if I want more rewards and a small amount in a S&S is not a bad idea rather than everything in just CASH-ISA

I need to grow a set of balls and stop being so risk cautious.

I shouldn't worry about inflation eroding my savings but worry about the money I waste on alcohol and what the alcohol is doing to my health.