S&S ISA 10 - 15 year performance guess

RG2015

jimjames wrote: »

Entirely possible if the investment is mainly in bonds but we have no idea what it actually is. Even 3% is at least double the instant access cash account return.

Yes, but would anyone invest £100k for 10 years with an expected return of 3% p.a.?

I do not however claim any expertise in investing and prefer the relative security of cash. I am really just commenting on the arithmetic and adding my personal opinion.

bcfclee27

I will post a thread with what my ISA is made up of later so I can give people a better idea of what's involved.

Thanks all

rebuswad

RG2015 wrote: »

Yes, but would anyone invest £100k for 10 years with an expected return of 3% p.a.?

I do not however claim any expertise in investing and prefer the relative security of cash. I am really just commenting on the arithmetic and adding my personal opinion.

If you had a return averaging 5% per year, over 10 years with one crash and one recovery year (giving a net 0%) that gives about the figure given.

BananaRepublic

Given that time in the market is recognised as key, I would question the advice of the IFA to invest at the start of each tax year. Waiting for the current tax year to end before investing £40,000 is not so bad, but rather than wait till April 2019, you could invest a sum into a fund outside of an ISA and then transfer it into the ISA in April 2019.

If the expected value is £144,000 after ten years, that does seem quite poor, but she might have assessed you as having a low tolerance for risk. You really want to aim for much higher returns, but that would need you to realise that during the journey your funds might plummet in value, and take several years to recover, during which time you must not sell them otherwise you crystallise losses.

Bravepants

I had an email from Vanguard the other day which contained a link to this:

https://www.vanguardinvestor.co.uk/articles/latest-thoughts/markets-economy/why-investors-prepare-for-lower-returns?cmpgn=ET0118UKCENLC0004

I have a 70-30 (equity/bond) split in my ISA, BUT I have downgraded my growth rate estimate to 3% pa as I prefer to err on the side of pessimism and be pleasantly surprised rather than be optimistic and be disappointed.

dunstonh

RG2015 wrote: »

£100k to £144k over 10 years is equivalent to 3.37% per annum which barely covers CPI inflation if the current rate continue and doesn't cover the current level of RPI inflation.

Perhaps the OP means a return of £144k which is 8.45% p.a.and sounds more likely as reasonable average risk return.

If it is a provider/platform based projection then they uses relatively low projection rates. Most will also factor inflation into it to give a net effective return.

RG2015

dunstonh wrote: »

If it is a provider/platform based projection then they uses relatively low projection rates. Most will also factor inflation into it to give a net effective return.

I had no idea that projections might have inflation factored in.

bcfclee27

New thread is.......

S&S ISA by financial advisor - opinions needed

More details in here - cheers everyone

dunstonh

RG2015 wrote: »

I had no idea that projections might have inflation factored in.

Yes, they have moved from monetary projection to SMPI basis (statutory money purchase illustration). Its doing a lot of damage as the typical consumer doesnt understand. The pensions section of the board in particular is getting lots of posters not thinking their pension income figure is low without realising the assumptions that get to that figure.

GreenSnake

bcfclee27 wrote: »

Too be honest although I've done a lot of reading on the subject I still struggle to understand it all. My father in law is a shrewd chap and highly recommended him to manage the money.

I was gonna throw everything into my mortgage until getting advice on here.

There will be about 40k left over that I will probably invest on my own at the moment I'm thinking 20k in a VLS and 20k in a HSBC global strategy.

Just to see how I get on.

You still have a mortgage debt, but you're putting money into the stock market?
That's a gamble.
Not saying it won't pay off, but it's a gamble.

Did your IF A calculate your mortgage interest payments until debt cleared?