How to move money from cash ISA into the stock market

FinancialIdiot

I've got £34000 in an easy access cash ISA I reluctantly feel I need to move to a stocks and shares ISA (due to current savings rates). However I'm worried about putting a lump sum into the stock market all at once.

Is there a way to move the money into a stocks and shares ISA but drip-feed it in without losing its ISA status? If not am I be better off putting it in as a lump sum to keep the ISA status or withdrawing it from the cash ISA so I can drip feed it into a stocks and shares ISA (using this year's and then some of next year's ISA allowance)?

The objective for the money would be growth over maybe 10-15 years to help fund retirement.

Albermarle

If you transfer the money to a S&S ISA with an investment platform ( eg HL, A J Bell. Fidelity, Iweb, Vanguard  etc ) it will go into a cash account, if you do not specify any investment(s) for the money,  From there you can buy investments at any speed you like without any effect on ISA status. Worth noting that a cash account in a S&S ISA will normally pay zero or near zero interest.

ColdIron

If the cash ISA and S&S ISA providers allow partial transfers (many do) you could move it in tranches, preserving the ISA status and still get interest on the cash portion

KBZL

Just transfer it in as many lump sums as you want to a provider that allows self select investments, such as Charles Stanley Direct. Transfer it via the receiving ISA provider, not by withdrawing it yourself of course.

FinancialIdiot

I presume I might as well start feeding the money in straight away (since I wont be able to time the market) but can anyone suggest a suitable rate to feed the money in at? As I'm a complete novice I was thinking in terms of Vanguard LS60 or something similar.

AnotherJoe

Please no. Pick something else other than VLS.

Plenty of other mixed equity bond funds that dont have an artificial UK weighting (the VLS weighting doesnt actually weight  towards UK in reality but a few industries, like oil and mining and finance)

FinancialIdiot

AnotherJoe said:

Please no. Pick something else other than VLS.

Plenty of other mixed equity bond funds that dont have an artificial UK weighting (the VLS weighting doesnt actually weight  towards UK in reality but a few industries, like oil and mining and finance)

Care to suggest something more suitable? Should the objective be to steer clear of UK-biased investments at present (if that's what VLS is)?? I need a lot of guidance I'm afraid.

Albermarle

VLS 60 just has a higher % of UK investments than other similar products . Some people think it is too high, but the recent performance of VLS60 to similar products has been quite good , so maybe not such a big issue. There is no black and white in investing and plenty of different opinions.

FinancialIdiot

Still interested in advice about time period to feed the money in over. Presumably the two extremes are (i) put all of it in now or (ii) feed it in regularly over the entire investment period (e.g. £280 pm for the next 10 years). Do these two extremes represent the opposite ends of the risk spectrum and I should decide my risk tolerance and choose a period accordingly (e.g. feed in over 5 years if I've got medium risk tolerance)? Is that a reasonable way to look at things?

Alternatively, is there a good reason to feed the money in irregularly or does that amount to trying to time the market (which is apparently unlikely to achieve the desired result)?

eskbanker

FinancialIdiot said:

Still interested in advice about time period to feed the money in over. Presumably the two extremes are (i) put all of it in now or (ii) feed it in regularly over the entire investment period (e.g. £280 pm for the next 10 years). Do these two extremes represent the opposite ends of the risk spectrum and I should decide my risk tolerance and choose a period accordingly (e.g. feed in over 5 years if I've got medium risk tolerance)? Is that a reasonable way to look at things?

Alternatively, is there a good reason to feed the money in irregularly or does that amount to trying to time the market (which is apparently unlikely to achieve the desired result)?

The best way to look at it IMHO is to work on the principle that you invest if you believe that the value of those investments will rise, and that therefore there should be more months when they increase than decrease.  Therefore, on the law of averages, when starting with a lump sum then statistically it makes most sense to get invested at the earliest opportunity rather than drip-feeding.

However, that is the rational view and takes no account of the psychological impact of value drops on the inexperienced investor....

Albermarle

Still interested in advice about time period to feed the money in over

It is basically a personal choice . As banker the rational view backed up by historical statistics is to put in a lump sum asap.

However many people would just feel more comfortable drip feeding it in.

Halfway house could be invest in say one third every couple of months.