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

singhini

@Krish123 This might help you?
https://www.youtube.com/watch?v=QerPzdK1nGs

Eco_Miser

veryintrigued wrote: »

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?.

Perhaps you missed the importance of that little word may. There's always a prospect of cashing in part of my investment, and that is what I was expecting to be doing over the last 8 years since I retired early, but in practice my income exceeded my expenditure, so I haven't.

But I don't understand your use of 'recouping the investment'. The investment is mine, it's paying me an income, and if ever I need the capital amount I can get it. I just don't envisage needing to spend the capital.

veryintrigued wrote: »

I guess you must be saying that you're investing in the market to pass onwards rather than you taking any loss/gain?

That may well be the effect, but not the primary intention.
I've invested to get an income to supplement my pensions.
If I cash out the investments, I reduce the income, and the cash loses by inflation. I'm hoping for another 30+ years, and 40+ is not impossible, so it's way too early to go mad spending my capital.

I could take more than the natural income if needed, and no doubt if I end up in a care home, I will. But short of that, I've no reason to sell investments, and so no reason to take much notice of the fluctuating valuation.

Ray_Singh-Blue

krish123 wrote: »

I want to try to understand how you calculate your yearly returns accurately, could anyone shed some light?

"XIRR is a function in Excel for calculating internal rate of return or annualized yield for a schedule of cash flows occurring at irregular intervals."

if you are anything like me you might find a tutorial helps - it is not completely straightforward.

darkidoe

krish123 wrote: »

My portfolio is up around 17% since October 2014.


Does this mean my annual returns have been 8.5%?


I haven't taken any money out but drip feed money in monthly.


I want to try to understand how you calculate your yearly returns accurately, could anyone shed some light?


I just have the one investment which is Vanguards LS80%

How to calculate return is a mindfield. I use Unitization return as showed by Monevator.

I don't think I would ever get my head around the XIRR, etc complex equations.

veryintrigued

Eco_Miser wrote: »

Perhaps you missed the importance of that little word may. There's always a prospect of cashing in part of my investment, and that is what I was expecting to be doing over the last 8 years since I retired early, but in practice my income exceeded my expenditure, so I haven't.

But I don't understand your use of 'recouping the investment'. The investment is mine, it's paying me an income, and if ever I need the capital amount I can get it. I just don't envisage needing to spend the capital.



That may well be the effect, but not the primary intention.
I've invested to get an income to supplement my pensions.
If I cash out the investments, I reduce the income, and the cash loses by inflation. I'm hoping for another 30+ years, and 40+ is not impossible, so it's way too early to go mad spending my capital.

I could take more than the natural income if needed, and no doubt if I end up in a care home, I will. But short of that, I've no reason to sell investments, and so no reason to take much notice of the fluctuating valuation.

So therefore in summary your use of 'that little phrase' 'never cash out' (as you so patronisingly put it) was complete nonsense.

Over and out.

Mikeyorks

singhini wrote: »

I just put £92,000 into a CASH-ISA yesterday at a 5 year fix of 1.5% ............................................................................................
.............................
I moan to myself that the 1.5% is pitiful yet I'm too risk cautious to put money into a S&S ISA

How can you be risk cautious when you've just tied up £92k, for 5 years, at a figure which is almost certain to be less than inflation for most of that period? Cash is not risk free - there's always something eroding it.

I moved out of cash entirely, some 6 years ago, when cash ISAs I had (I always fixed for the maximum period ...... when rates were 5% or more) were maturing and re-cycling was going to be at just over 1%.

So everything went into S&S ISAs and which have averaged just under 10% on a rolling basis. That's a figure which was running higher in June but (mainly invested across 30+ Funds) a few discrete shares I hold took a significant Brexit hit and are mainly still getting their breath back. Any Funds which were adversely impacted bounced back pretty sharply.

jimjames

Mikeyorks wrote: »

How can you be risk cautious when you've just tied up £92k, for 5 years, at a figure which is almost certain to be less than inflation for most of that period? Cash is not risk free - there's always something eroding it.

I think the problem is that many people don't understand risk. It's much easier to see the risk investing when it's plastered all over the news that the stock market has fallen. It doesn't make the news in the same way when it's risen 100% since 2009. Inflation is the invisible risk, you still have £5000 in your account after 10 years, you don't see that it will buy you less than when you placed it there.

JohnRo

How can you be risk cautious when you've just tied up £92k, for 5 years, at a figure which is almost certain to be less than inflation for most of that period

Because cash is a secure and almost certain proposition. It's easy to get complacent with equity investment, especially in recent years where the general trend is very much on the up and the falls have quickly recovered.

Global equities could be exactly the same as now, a quarter of their current nominal value or could have doubled in 5 years, it's anyone's guess.

It all depends on individual circumstances and requirements as to which is the sensible option.

singhini

Mikeyorks wrote: »

How can you be risk cautious when you've just tied up £92k, for 5 years, at a figure which is almost certain to be less than inflation for most of that period? Cash is not risk free - there's always something eroding it.

I do agree, my thinking is 1.5% guaranteed versus an unknown % in a S&S-ISA (hence risk cautious as I've gone for certainty).

For me inflation is like old age, its gonna happen. Inflation is 0.9% at the moment against the 1.5% on the investment. But it will go up as the governments aim for a figure of 2%. I think it will climb slightly over 2% and the age old government trick to deal with increasing inflation is increase interest rates to kerb it (its a shame but there's no guarantee savings rates will go up as there not linked).

Money hey; dammed if you don't have it, dammed if you do:mad:

Eco_Miser

veryintrigued wrote: »

So therefore in summary your use of 'that little phrase' 'never cash out' (as you so patronisingly put it) was complete nonsense.

Over and out.

"Cash out" was your phrase. Were you being patronising?
What I actually wrote was

For long-term buy-and-hold'ers we may never cash out, and certainly not in the near future,

and the point I was making was that not counting returns until they are crystallized, when that may never happen, is silly.