Stocks & Shares tracker ISA Longer term

mustachio

Hi,
Hopefully a straight forward question:
What happens to stocks and shares ISA's over several years? 

What I mean is if I invest 10k into the S & P 500 with a tracker in 2020 what happens to that money after the tax year? Lets say it is worth 12k at the end of the year. Would that then mean that 12k is invested in 2021? And then this would continue until I withdraw? 
I am assuming that the money remains actively invested within the S & P 500 though I want to be sure before I proceed
By the way I am aware that these can incur potential losses, etc. 
Thanks in advance.

Swipe

An ISA is just a tax free wrapper that allows you to deposit up to £20K in a tax year. Whatever investments you buy from within the ISA just sit inside it until you sell them.

dunstonh

What I mean is if I invest 10k into the S & P 500 with a tracker in 2020 what happens to that money after the tax year? 

Hopefully, you would not invest £10k in an S&P500 tracker (i.e. 100% of your investing) as that would be poor quality investing.

Howver, nothing happens.  It will remain there until you switch out of it.

Lets say it is worth 12k at the end of the year. Would that then mean that 12k is invested in 2021?

Depending on the context you are using for the word "invested"

If you mean invested as how much you have invested then yes it will

If you mean invested as in making a new contribution then no it wont.

I am assuming that the money remains actively invested within the S & P 500 though I want to be sure before I proceed

A tracker is not actively invested.  It is passively invested.   It will remain in that fund until you change it.

eskbanker

The only significance of the new tax year is that you then have a new annual contribution allowance available (currently £20K), but this doesn't affect what's already in the account, which stays there until you choose to withdraw, invested in whatever products you choose until you decide to sell.

mustachio

dunstonh said:

What I mean is if I invest 10k into the S & P 500 with a tracker in 2020 what happens to that money after the tax year? 

Hopefully, you would not invest £10k in an S&P500 tracker (i.e. 100% of your investing) as that would be poor quality investing.

Howver, nothing happens.  It will remain there until you switch out of it.

Lets say it is worth 12k at the end of the year. Would that then mean that 12k is invested in 2021?

Depending on the context you are using for the word "invested"

If you mean invested as how much you have invested then yes it will

If you mean invested as in making a new contribution then no it wont.

I am assuming that the money remains actively invested within the S & P 500 though I want to be sure before I proceed

A tracker is not actively invested.  It is passively invested.   It will remain in that fund until you change it.

Thanks for the answer. 

"Hopefully, you would not invest £10k in an S&P500 tracker (i.e. 100% of your investing) as that would be poor quality investing". You might want to re-consider what you are saying here by looking into it more. As a long-term investment (i.e.10 year plus) I think you will find that it compares very favourably unless you are looking at high risk ventures (which I am not).

eskbanker

mustachio said:
"Hopefully, you would not invest £10k in an S&P500 tracker (i.e. 100% of your investing) as that would be poor quality investing". You might want to re-consider what you are saying here by looking into it more. As a long-term investment (i.e.10 year plus) I think you will find that it compares very favourably unless you are looking at high risk ventures (which I am not).

You might want to consider reading dunstonh's signature at the foot of their posts, where you'll hopefully realise that you're conversing with a professional who knows way more about investing than you're ever likely to and who is probably rolling about on the floor laughing as we speak!

mustachio

eskbanker said:

mustachio said:
"Hopefully, you would not invest £10k in an S&P500 tracker (i.e. 100% of your investing) as that would be poor quality investing". You might want to re-consider what you are saying here by looking into it more. As a long-term investment (i.e.10 year plus) I think you will find that it compares very favourably unless you are looking at high risk ventures (which I am not).

You might want to consider reading dunstonh's signature at the foot of their posts, where you'll hopefully realise that you're conversing with a professional who knows way more about investing than you're ever likely to and who is probably rolling about on the floor laughing as we speak!

If the historical returns for the S & P 500 over say 10 years ago is a poor return than fair enough show me a better stocks and shares ISA. I am all ears.

Aged

mustachio said:

Hi,
Hopefully a straight forward question:
What happens to stocks and shares ISA's over several years? 

What I mean is if I invest 10k into the S & P 500 with a tracker in 2020 what happens to that money after the tax year? Lets say it is worth 12k at the end of the year. Would that then mean that 12k is invested in 2021? And then this would continue until I withdraw? 
I am assuming that the money remains actively invested within the S & P 500 though I want to be sure before I proceed
By the way I am aware that these can incur potential losses, etc. 
Thanks in advance.

An 'ISA' is just an account, like say a bank deposit account, except in this case it holds investments rather than £. You put your investment in, and it stays there until you withdraw it. The account is exactly the same on 6th April as it was on the 5th, the new tax year just means you have a whole new allowance that you can deposit into it. 

ColdIron

mustachio said:

eskbanker said:

mustachio said:
"Hopefully, you would not invest £10k in an S&P500 tracker (i.e. 100% of your investing) as that would be poor quality investing". You might want to re-consider what you are saying here by looking into it more. As a long-term investment (i.e.10 year plus) I think you will find that it compares very favourably unless you are looking at high risk ventures (which I am not).

You might want to consider reading dunstonh's signature at the foot of their posts, where you'll hopefully realise that you're conversing with a professional who knows way more about investing than you're ever likely to and who is probably rolling about on the floor laughing as we speak!

If the historical returns for the S & P 500 over say 10 years ago is a poor return than fair enough show me a better stocks and shares ISA. I am all ears.

An ISA is just a wrapper or tax privileged account, think of it like a shopping trolley. It's what you put in it that counts

Albermarle

mustachio said:

eskbanker said:

mustachio said:
"Hopefully, you would not invest £10k in an S&P500 tracker (i.e. 100% of your investing) as that would be poor quality investing". You might want to re-consider what you are saying here by looking into it more. As a long-term investment (i.e.10 year plus) I think you will find that it compares very favourably unless you are looking at high risk ventures (which I am not).

You might want to consider reading dunstonh's signature at the foot of their posts, where you'll hopefully realise that you're conversing with a professional who knows way more about investing than you're ever likely to and who is probably rolling about on the floor laughing as we speak!

If the historical returns for the S & P 500 over say 10 years ago is a poor return than fair enough show me a better stocks and shares ISA. I am all ears.

You are getting mixed up between the investments ( S&P 500 tracker ) and the ISA they are held in .
You can only compare the S&P 500 tracker to another investment..
Dunstonh never said that investing in the S&P 500 over the last 10 years gave a poor return .
He said that investing in one index 100% was a poor strategy because  it is quite possible over the next 10 years it will perform badly . Past performance is no guarantee of future success. You should never be invested 100% in anything , you should diversify .

mustachio

Albermarle said:

mustachio said:

eskbanker said:

mustachio said:
"Hopefully, you would not invest £10k in an S&P500 tracker (i.e. 100% of your investing) as that would be poor quality investing". You might want to re-consider what you are saying here by looking into it more. As a long-term investment (i.e.10 year plus) I think you will find that it compares very favourably unless you are looking at high risk ventures (which I am not).

You might want to consider reading dunstonh's signature at the foot of their posts, where you'll hopefully realise that you're conversing with a professional who knows way more about investing than you're ever likely to and who is probably rolling about on the floor laughing as we speak!

If the historical returns for the S & P 500 over say 10 years ago is a poor return than fair enough show me a better stocks and shares ISA. I am all ears.

You are getting mixed up between the investments ( S&P 500 tracker ) and the ISA they are held in .
You can only compare the S&P 500 tracker to another investment..
Dunstonh never said that investing in the S&P 500 over the last 10 years gave a poor return .
He said that investing in one index 100% was a poor strategy because  it is quite possible over the next 10 years it will perform badly . Past performance is no guarantee of future success. You should never be invested 100% in anything , you should diversify .

Fair enough though at no point did I ever say I was investing 100% into anything