lost money on tracker isa.

clive0510

HI.I, like a lot of people on here have a modest isa which is there for emergencies and also my old age. I,m used to it fluctuating up and down to the tune of plus or minus the odd 100 pound or so. I have just received my isa statement dec 2019 to mar 2020,and apparently in 3 months its lost 2,000 pound!. I had no warning or indication this may happen. consequently I,m now considering taking what remains of my isa and putting it in premium bonds, where it will be secure with the chance of winning something each month. any advice appreciated . thanks.

grumiofoundation

A stock and shares ISA is not a god place for emergency cash. For old age a pension is likely better (due to tax relief). 

Assuming this is a stocks and shares ISA - there has recently been a fall in global markets. When you opened the ISA you will have been told that the value of your investments go up and down and you will have agreed you were happy with this. If you take the money out now you are crystallising the loss, if you leave the money in it is likely (based on historical precedent) to recover. 

eskbanker

clive0510 said:

I had no warning or indication this may happen.

Probably worth turning on your TV or reading newspapers or websites, where you'll find that the planet is suffering something of a crisis, which among many other effects, is wiping significant chunks off the value of investments.

When you invested in your ISA, you'll have acknowledged the standard warning about how it can go down as well as up, so it shouldn't be a surprise.

In terms of what to do now, the usual view on all the similar threads on here is to stick with it unless you need the money soon, selling at low prices isn't generally a good idea....

kuratowski

An investment, such as a stocks & shares ISA, is not for emergencies.  Any money you might need to call on at short notice should be saved in a cash savings product.

Do you have at least 3-6 months' worth of expenses saved in cash?  If not, then perhaps you shouldn't be investing, the markets do tend to fall like this fairly often.

If you do already have sufficient cash set aside for emergencies, and if you don't require the money in your ISA to meet a financial need in the near future, you are usually better off leaving it invested, because the market will recover in the long run, and if you sell now you simply crystallise your losses.

Also, if saving for old age, many people are better off using a pension product (depends a lot on your individual circumstances).  You can get more guidance if you post further details.

Albermarle

You are best to look back how it has performed over the last few years and no doubt it will have increased by more than £2000, before this latest dip.

dunstonh

 I have just received my isa statement dec 2019 to mar 2020,and apparently in 3 months its lost 2,000 pound!.

£2000 in what context?   If that is £2000 on a £4000 then its high.  If its on £20,000 then its low.

 I had no warning or indication this may happen. 

The clue is what invested in.  Did you not read the name of the fund before you selected it?

Did you not check the volatility of the fund before you bought it?  (not difficult as there have been 2 bigger drops in the last 20 years and a major drops in 2015/6 and 2019)

You saw index tracker.   That means it tracks the index of what ever it is tracking. e.g. FTSE100.   So, what was yours tracking?

How old are you?  (you say its for old age but that doesn't let on what age you are now)

Investments zig zag in value all of the time.  Quite normal and to be expected.  The drop from 24th February to 18 March is well within normal range of expectation.   Since 18th March it has been going up again.