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How many ISAs?

2

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  • enthusiasticsaver
    enthusiasticsaver Posts: 16,134 Ambassador
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    In your situation it makes sense to gradually move a percentage of your cash isa to stocks and shares and yes it is easy to do. Use compare my platform to decide which platform to go with as they all charge differently. HL is expensive and charges on percentage basis and whilst I like the Vanguard funds I would be wary of only using the Vanguard platform as they only sell Vanguard funds. Any reason why you are using 2 platforms for a relatively small amount?
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  • Alexland
    Alexland Posts: 10,213 Forumite
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    edited 1 November 2017 at 11:04PM
    Ah yes good point!

    What do you mean by "real (not synthetic) holdings" ?

    Now don't jump on me but I've had £3K in my HL S&S ISA now for almost 3 weeks. I have this split between HL's own balanced portfolio+ and about 7 funds and was testing it out to see what happened. I know this is a tiny amount of time and too soon and not that much in the grand scheme of things etc etc but it's gone up and down and down and up and down... a bit but generally I'm still down... only a few quid as we speak but generally I'm down, is this completely normal considering it's very well diversified?

    Thanks

    Synthetic funds are where they are not investing in the underlying assets you would expect but they are trying to simulate the performance via complicated financial instruments. For example the fund might bet on the performance of a market against someone that might want to bet against the market. These funds are much riskier.

    In the case of your 7 funds its completely normal for the value to go up or down by 1% on a daily basis. This is noise and can be safely ignored. For long term investing you need to consider the general expected direction of different asset types.

    Alex
  • I see. Could I have invested in synthetic funds with HL without knowing? How could I tell?

    Yes I understand but shouldn't have at least improved slightly after 3 weeks? I'm not expecting huge amounts...
  • eskbanker
    eskbanker Posts: 38,022 Forumite
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    Yes I understand but shouldn't have at least improved slightly after 3 weeks? I'm not expecting huge amounts...
    On what basis are you expecting improvement after three weeks?

    If it's just a generic expectation that everything should increase on a close to linear basis even in very short timescales then that would suggest that you haven't actually understood, but if you're saying that you've evaluated the performance of your funds against the underlying markets, sectors, indices, etc, that they're intended to be tracking, and they're not correlating, then that would indeed be a different issue and a potential cause for concern....
  • I have £400k in S&S ISAs, I started with only £3k many years ago.

    I've tried to explain to a friend of mine who has a huge lump sum from house sale to put it into an S&S ISA but they won't and I don't know why.

    I even explain they're losing 3%/annum right now due to inflation.

    I know there's risk and you have to be in for 5yrs as a bare minimum but still it's no.

    I even pointed them to NS&I Income Bonds, at 0.75% on £300k would pay them £190/month approx, but they still just leave it in the bank(s) - it's unbelievable.

    It's abit like those who take all their money out of a pension and put it in a bank where it earns nothing - having paid a load of tax as well probably.

    It's just sheer madness.
  • eskbanker wrote: »
    On what basis are you expecting improvement after three weeks?

    If it's just a generic expectation that everything should increase on a close to linear basis even in very short timescales then that would suggest that you haven't actually understood, but if you're saying that you've evaluated the performance of your funds against the underlying markets, sectors, indices, etc, that they're intended to be tracking, and they're not correlating, then that would indeed be a different issue and a potential cause for concern....

    Maybe I haven't but never done it before and still learning...

    That said, lets say I was investing for income, I wouldn't have made any!
    I know it's a small amount of money but i'm talking about the theory
    capital0ne wrote: »
    I have £400k in S&S ISAs, I started with only £3k many years ago.

    I've tried to explain to a friend of mine who has a huge lump sum from house sale to put it into an S&S ISA but they won't and I don't know why.

    I even explain they're losing 3%/annum right now due to inflation.

    I know there's risk and you have to be in for 5yrs as a bare minimum but still it's no.

    I even pointed them to NS&I Income Bonds, at 0.75% on £300k would pay them £190/month approx, but they still just leave it in the bank(s) - it's unbelievable.

    It's abit like those who take all their money out of a pension and put it in a bank where it earns nothing - having paid a load of tax as well probably.

    It's just sheer madness.

    True, but it can go down more than inflation I assume so therefore is a bigger risk than leaving it in the bank earning 1% or something

    Also, as everyone keeps saying it's a long term investment and that isn't always viable for some people depending on personal circumstances...
  • jimjames
    jimjames Posts: 18,886 Forumite
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    Maybe I haven't but never done it before and still learning...

    That said, lets say I was investing for income, I wouldn't have made any!
    I know it's a small amount of money but i'm talking about the theory.

    If you were investing for income then the movements of your capital would be irrelevant and have no bearing on the income you receive. Income payments would be made every 3 or 6 months depending on the fund that you'd chosen.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • jimjames
    jimjames Posts: 18,886 Forumite
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    capital0ne wrote: »
    I have £400k in S&S ISAs, I started with only £3k many years ago.

    I've tried to explain to a friend of mine who has a huge lump sum from house sale to put it into an S&S ISA but they won't and I don't know why.

    I assume you/they are aware that you can't put a large sum from a house sale into an ISA as the limit is £20k so you'd need to drip feed in over a number of years. You can still invest outside an ISA though.

    However some people have a negative impression of investing without understanding risk and you will struggle to change that attitude.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • jimjames wrote: »
    If you were investing for income then the movements of your capital would be irrelevant and have no bearing on the income you receive. Income payments would be made every 3 or 6 months depending on the fund that you'd chosen.

    Ah I guess this is why I don't understand... so if lets say I invested in an income fund instead of an accumulation fund, I would get regular payments outside of the increases in capital?

    I thought even in accumulation funds I would still get occasional payments?

    Does this mean that if I invested in the same fund, same amount in an accumulation fund and income fund, the accumulation fund would increase more because it doesn't have to pay out the income?

    Sorry if these are silly questions

    Thanks
  • jimjames
    jimjames Posts: 18,886 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Ah I guess this is why I don't understand... so if lets say I invested in an income fund instead of an accumulation fund, I would get regular payments outside of the increases in capital?
    Yes you would, depends on fund remit though
    I thought even in accumulation funds I would still get occasional payments?
    No, acc funds will reinvest all income
    Does this mean that if I invested in the same fund, same amount in an accumulation fund and income fund, the accumulation fund would increase more because it doesn't have to pay out the income?
    Yes that's correct. But you'd have received the income from the inc fund, just not had the effect of compounding it
    Remember the saying: if it looks too good to be true it almost certainly is.
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