Stock and Share ISA - Withdrawing ?

haswod

Morning and hello All, I am new here and this is my first post.

I have questions in regards to ISA. Please note that I searched before posting here.
Situation: I saved some money and would like to invest into a Stock & Share ISA via funds. I targeted Nutmeg or Fidelity as good Stock and Shares ISA.
Questions: However, in every video that I watched, or every read website article speaking about Stock and Share ISA, they say it's a long term investment.  I don't understand WHY.
- If I put 3k on my ISA today, that raises 6k in August, will I be able to withdraw everything without any fee ?
- Why does everybody say it's a long term investment ? If we benefit from the coronavirus crisis, it could become a short term investement right ?
- Any general recommendation for a newbie in Stock and Share ISA investment ?

Many thanks for your help.
 

dunstonh

 they say it's a long term investment.  I don't understand WHY.

investments go down as well as up.   Every single day they zig zag in value.    You have to average out the ups and downs to get the long term returns.   You could get three negative years in a row (as has happened as recently as 2001-2003).   An economic cycle is around 10 years.    So, if you don't invest for a whole cycle you do not know if you are going to get the period with the stronger growth years or the higher negative years.

- If I put 3k on my ISA today, that raises 6k in August, will I be able to withdraw everything without any fee ?

You have an entirely unrealistic expectation if you think that is going to happen.   Doubling in 10 years is considered a good result.   Not 5 months.

- Any general recommendation for a newbie in Stock and Share ISA investment ?

That is a regulated activity. So, I cannot say.    However, at the moment, I am not sure you are ready for a risk based investment due to lack of understanding.  Do some more research first.

haswod

Thanks for your response dunstonh. Please see my comments below.
investments go down as well as up.   Every single day they zig zag in value.    You have to average out the ups and downs to get the long term returns.   You could get three negative years in a row (as has happened as recently as 2001-2003).   An economic cycle is around 10 years.    So, if you don't invest for a whole cycle you do not know if you are going to get the period with the stronger growth years or the higher negative years.Yes I agree and fully understand the economic cycle.

You have an entirely unrealistic expectation if you think that is going to happen.   Doubling in 10 years is considered a good result.   Not 5 months.

I know this is unrealistic. The question behind the example was: "Am I able to withdraw the money on my ISA + income for free at any time ?". I mean, there are no requirements like the money must stay at least 5 years on the account or anything else?

MEM62

haswod said:

Thanks for your response dunstonh. Please see my comments below.

investments go down as well as up.   Every single day they zig zag in value.    You have to average out the ups and downs to get the long term returns.   You could get three negative years in a row (as has happened as recently as 2001-2003).   An economic cycle is around 10 years.    So, if you don't invest for a whole cycle you do not know if you are going to get the period with the stronger growth years or the higher negative years.

Yes I agree and fully understand the economic cycle.

You have an entirely unrealistic expectation if you think that is going to happen.   Doubling in 10 years is considered a good result.   Not 5 months.

I know this is unrealistic. The question behind the example was: "Am I able to withdraw the money on my ISA + income for free at any time ?". I mean, there are no requirements like the money must stay at least 5 years on the account or anything else?

It is your decision as to how long the money is invested.  You make the choice and take the rewards / benefits that result from your choices.  It is not for the institution holding your investments to decide how long you keep them there.   

dunstonh

The investments are open ended.  You decide the timescale.  The risk warnings exist to a) inform you and b) protect the backsides of the investment company from future complaint if you say you didn't know it was a long term investment.

tropic_of_Username019

Suppose you invested money you weren't going to spend for 10+ years, so you can wait for a full economic cycle. But you happen to get bumper returns in the first 5 months — or just in the first 5 years. You could sell, but should you? Well, going all to cash wouldn't be a good way of preserving (allowing for inflation) and growing the value of your capital over the remaining 9.6 years (or 5 years). And knowing what the returns were in the first 5 months or 5 years tells you very little about what returns will be in the remaining time. Early bumper returns probably do imply lower expected returns in the future, but there's such a broad range of plausible outcomes that you're still largely in the dark. So you might choose to dial down the risk of your portfolio slightly after bumper returns, but that's about it.

haswod

Ok cool. Thanks all for your answers, I'm now very clear. 
Keep safe.

haswod

tropic_of_Username019 said:

Suppose you invested money you weren't going to spend for 10+ years, so you can wait for a full economic cycle. But you happen to get bumper returns in the first 5 months — or just in the first 5 years. You could sell, but should you? Well, going all to cash wouldn't be a good way of preserving (allowing for inflation) and growing the value of your capital over the remaining 9.6 years (or 5 years). And knowing what the returns were in the first 5 months or 5 years tells you very little about what returns will be in the remaining time. Early bumper returns probably do imply lower expected returns in the future, but there's such a broad range of plausible outcomes that you're still largely in the dark. So you might choose to dial down the risk of your portfolio slightly after bumper returns, but that's about it.

I just checked your answer. Thanks as well.
To be honest, my question to withdraw everything without any fee is because I know I will be leaving UK shortly. I just wanted to make sure that I will have my money back without any fee.
Cheers all. 

eskbanker

haswod said:
To be honest, my question to withdraw everything without any fee is because I know I will be leaving UK shortly. I just wanted to make sure that I will have my money back without any fee.

If it's that important to you to avoid fees then you're presumably hoping to get all of your money back, and therefore if you'll be looking to withdraw 'shortly' then you'd be best sticking to cash deposits and steering well clear of investments....

haswod

eskbanker said:

haswod said:
To be honest, my question to withdraw everything without any fee is because I know I will be leaving UK shortly. I just wanted to make sure that I will have my money back without any fee.

If it's that important to you to avoid fees then you're presumably hoping to get all of your money back, and therefore if you'll be looking to withdraw 'shortly' then you'd be best sticking to cash deposits and steering well clear of investments....

When I say "shortly" I mean 1-2 years time.
What do you mean sticking to cash deposits ? I should not go through an ISA ?

tropic_of_Username019

eskbanker said:

haswod said:
To be honest, my question to withdraw everything without any fee is because I know I will be leaving UK shortly. I just wanted to make sure that I will have my money back without any fee.

If it's that important to you to avoid fees then you're presumably hoping to get all of your money back, and therefore if you'll be looking to withdraw 'shortly' then you'd be best sticking to cash deposits and steering well clear of investments....

I'd disagree with that. Does haswod have an investment time horizon of 10+ years (i.e. won't spend the money in less than 10 years' time), but expects to leave the UK in 1-2 years? In that case, they can sensibly go for long-term investments. After leaving the UK, they might well want to cash in their ISA investments, but would then be reinvesting the cash in broadly similar investments, probably in their destination country (using whatever tax wrappers make sense there). Their investments might be showing losses or profits at the point of leaving the UK (who knows?), but that is irrelevant, since they'd be switching to very similar investments at that point, not genuinely divesting.

I said "might well", because there could also be reasons to retain UK-based investments after leaving the UK, depending on a number of factors. That's a bit complicated.