Current S&S ISA volitality

Due to the poor interest rates, I opened my first S&S ISA two weeks ago with nutmeg. Invested just over £10k. Chose risk level 3/5. I’ve just checked how it was doing to see it’s down £220. I knew they could go up and down but hadn’t thought it could be so much in such a short time. I don’t really know what I’m doing but I’m thinking this maybe isn’t for me or isn’t the right time to be investing with the uncertainty around the covid recovery. Am I worrying unduly and should I stick it out for the long term?

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  • masonicmasonic Forumite
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    A drop of £220 is a little over 2% down, which is not very much. A portfolio like the one you have selected would have fallen nearly 20% between 21st Feb 2020 and 18 March 2020, with daily losses of up to 4%.
    I think you are worrying unduly, but you need to pick investments that will allow you to sleep at night. If you are in it for the long term, then you are going to see 10-20% losses from time to time.
  • AlexlandAlexland Forumite
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    There is always uncertainty. Markets have good and bad weeks. This is typical and provided you are investing for the medium to long term there is plenty of time for your investment to recover and make gains. Relax and use the time to mentally prepare yourself for the bigger drops. If the reduction had been more significant you might have wanted to add more (to average down your cost and reduce the percentage drop) or increase the equities exposure to gain from the eventual recovery.
  • dunstonhdunstonh Forumite
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    Due to the poor interest rates, I opened my first S&S ISA two weeks ago with nutmeg. Invested just over £10k. Chose risk level 3/5. I’ve just checked how it was doing to see it’s down £220. 

    A tiny drop that you will see hundreds of times.

    I knew they could go up and down but hadn’t thought it could be so much in such a short time.

    It can actually be an awful lot more than that   This is just daily movement.   The risk level chosen will drop by over 25% during a major fall.  You are wobbling after just a tiny 2%.

    or isn’t the right time to be investing with the uncertainty around the covid recovery.

    There is always uncertainty.  That never ends.   

    Time dilutes risk.  An economic cycle is around 10-15 years nowadays.  So, if you are investing, you really need to be looking at an economic cycle or more.  It will zig zag all the way through that cycle.   If you panic every time there is a zag then you are invested above your risk profile.  It is good to be uncomfortable during a major drop but if you are already checking your balances after just 2 weeks and wobbling on 2% losses then investing is not for you.   You need to accept that you are going to lose money, in real terms, in cash savings instead.

    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • midge406midge406 Forumite
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    masonic said:
    A drop of £220 is a little over 2% down, which is not very much. A portfolio like the one you have selected would have fallen nearly 20% between 21st Feb 2020 and 18 March 2020, with daily losses of up to 4%.
    I think you are worrying unduly, but you need to pick investments that will allow you to sleep at night. If you are in it for the long term, then you are going to see 10-20% losses from time to time.
    Thank you. Do you know roughly how much it recovered April onwards?
  • midge406midge406 Forumite
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    dunstonh said:
    Due to the poor interest rates, I opened my first S&S ISA two weeks ago with nutmeg. Invested just over £10k. Chose risk level 3/5. I’ve just checked how it was doing to see it’s down £220. 

    A tiny drop that you will see hundreds of times.

    I knew they could go up and down but hadn’t thought it could be so much in such a short time.

    It can actually be an awful lot more than that   This is just daily movement.   The risk level chosen will drop by over 25% during a major fall.  You are wobbling after just a tiny 2%.

    or isn’t the right time to be investing with the uncertainty around the covid recovery.

    There is always uncertainty.  That never ends.   

    Time dilutes risk.  An economic cycle is around 10-15 years nowadays.  So, if you are investing, you really need to be looking at an economic cycle or more.  It will zig zag all the way through that cycle.   If you panic every time there is a zag then you are invested above your risk profile.  It is good to be uncomfortable during a major drop but if you are already checking your balances after just 2 weeks and wobbling on 2% losses then investing is not for you.   You need to accept that you are going to lose money, in real terms, in cash savings instead.

    Thank you. I have a drop of income coming soon (acting up job ending and wife taking career break) so think I’m extra nervous.

    I have around £25k in savings. I’ve always had my money in regular savers and accounts offering around 3% so I felt I was protecting my money but with current interest rates being so low, I thought I’d go down the S&S ISA route. However I’m worried at this rate I’ll be a couple of grand down and will need to recover all that just to get back to even . I’m just not used to my money going down like this. I appreciate however I need to be thinking of this after 10 years not a few weeks.

    Not sure if I’d be better overpaying my mortgage (2%) or reducing this risk rate to 2/5 if I’m clearly a nervous type.
  • masonicmasonic Forumite
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    midge406 said:
    masonic said:
    A drop of £220 is a little over 2% down, which is not very much. A portfolio like the one you have selected would have fallen nearly 20% between 21st Feb 2020 and 18 March 2020, with daily losses of up to 4%.
    I think you are worrying unduly, but you need to pick investments that will allow you to sleep at night. If you are in it for the long term, then you are going to see 10-20% losses from time to time.
    Thank you. Do you know roughly how much it recovered April onwards?
    It would have recovered all of those losses by ~October-November 2020. That doesn't mean to say the recovery after the next crash will be so quick.
  • jimjamesjimjames Forumite
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    midge406 said:
    dunstonh said:
    Due to the poor interest rates, I opened my first S&S ISA two weeks ago with nutmeg. Invested just over £10k. Chose risk level 3/5. I’ve just checked how it was doing to see it’s down £220. 

    A tiny drop that you will see hundreds of times.

    I knew they could go up and down but hadn’t thought it could be so much in such a short time.

    It can actually be an awful lot more than that   This is just daily movement.   The risk level chosen will drop by over 25% during a major fall.  You are wobbling after just a tiny 2%.

    or isn’t the right time to be investing with the uncertainty around the covid recovery.

    There is always uncertainty.  That never ends.   

    Time dilutes risk.  An economic cycle is around 10-15 years nowadays.  So, if you are investing, you really need to be looking at an economic cycle or more.  It will zig zag all the way through that cycle.   If you panic every time there is a zag then you are invested above your risk profile.  It is good to be uncomfortable during a major drop but if you are already checking your balances after just 2 weeks and wobbling on 2% losses then investing is not for you.   You need to accept that you are going to lose money, in real terms, in cash savings instead.

    Not sure if I’d be better overpaying my mortgage (2%) or reducing this risk rate to 2/5 if I’m clearly a nervous type.
    If you have a property or pension do you check the value of that on a daily basis? Would you be less worried if you only checked on the value every year? Just because you can see the amount every day doesn't mean you need to, you might be better off putting the numbers away and forgetting about them which would avoid concern over minor daily changes. This week has been quite volatile but then many times have been more so. 
    Remember the saying: if it looks too good to be true it almost certainly is.
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