When to withdraw money from a stocks and shares ISA?

jbuchanangb

I have sum invested in an S&S ISA since 2016, which seems to be worth 45% more today then when I invested it. The portfolio was chosen for me by an IFA. Seems to be a reasonable arrangement. I withdrew some money earlier this year, the first withdrawal since investing. Might take some more out next year.

JGB1955

Collyflower1 said:

I made the stupid mistake last year of taking out 85K from my cash isa so now dont have the tax free wrapper. Just caused by having a stressful time and lack of thinking things through!

Why do you think that was a bad decision?  Money in a cash ISA is currently earning less than in fixed rate savings....
Al Ryan are currently paying 1.45% for a fixed rate 1 year account.  The best 1 year ISA is 0.65% with Cynergy.

P933alilli

JGB1955 said:

Collyflower1 said:

I made the stupid mistake last year of taking out 85K from my cash isa so now dont have the tax free wrapper. Just caused by having a stressful time and lack of thinking things through!

Why do you think that was a bad decision?  Money in a cash ISA is currently earning less than in fixed rate savings....

When looked at in those terms it does look like an ok decision but i could have put most of it in a S&S isa for 5 years at least!

Billycock

JGB1955 said:

Collyflower1 said:

I made the stupid mistake last year of taking out 85K from my cash isa so now dont have the tax free wrapper. Just caused by having a stressful time and lack of thinking things through!

Why do you think that was a bad decision?  Money in a cash ISA is currently earning less than in fixed rate savings....

As the OP said, no longer has the tax free wrapper.
Perhaps should have transferred from cash ISA to S&S ISA therefore keeping the tax free wrapper.

Billycock

jbuchanangb said:

I have sum invested in an S&S ISA since 2016, which seems to be worth 45% more today then when I invested it. The portfolio was chosen for me by an IFA. Seems to be a reasonable arrangement. I withdrew some money earlier this year, the first withdrawal since investing. Might take some more out next year.

What funds do you hold in your portfolio?

Thrugelmir

Often gets overlooked how much of the eventual return is generated by reinvestment of the income generated. 

Markets aren't one way streets. Nor are they pot hole free. Life would so easy if 20% gains were handed out with frequency just for holding investments for a couple of years. Depending upon when you start your investment, the return you achieve could be so very different. 

tebbins

Thrugelmir said:

Often gets overlooked how much of the eventual return is generated by reinvestment of the income generated. 

Markets aren't one way streets. Nor are they pot hole free. Life would so easy if 20% gains were handed out with frequency just for holding investments for a couple of years. Depending upon when you start your investment, the return you achieve could be so very different. 

On that subject, for most global stock markets including the total world, over the very long term, most of the real total return (capital growth + dividend income - inflation) comes from dividends. For the UK it's around 3/4.

The following is a quick calculation from the 2018 Barclays Equity Gilts Study, 1945-2017.
Capital return 6.7%
Total return 11.4%
Average dividend yield 4.4%
Real capital return 1.5%
Real total return 5.9%

Over those 72 years, dividends made the difference between turning £10,000 into £29,000 (in 1945 money) and turning £10,000 into £630,000 (in 1945 money).

jimjames

Thrugelmir said:

Often gets overlooked how much of the eventual return is generated by reinvestment of the income generated. 

It's a good point. I've looked before at the returns from one fund I held 20 years ago that was a FTSE share tracker. FTSE in 2000 was around the 7000 mark, it's not much above that now. However the index tracker fund price has risen from around 40p to 149p in that time which really shows the power of dividends and compounding.

Missy79

@monkeyboyhero invest in a S&S ISA with the reasonable hope that over a 5-10 year period it should (based on the fact that historically it has) give a reasonable return on your investment. This is of course highly dependent on what you choose to invest in within your ISA. Over a shorter time period it may go up or it may go down (likely both), withdrawing cash if it's gone up crystallizes any gains but loses the advantage of compounding for greater growth.

I've only very recently opened a S&S ISA, I wish I'd done it much earlier with my cash ISA, it would have appreciated by thousands rather than the few hundred it has.

Langtang

lozzy1965 said:

 that there is a 'risk' to leaving your money in cash, or in an account that pays less than the rate of inflation, in that your money will be worth less over time.

I appreciate that it will lose money over extended periods of time, but is there a "sweet spot" of time that would be OK to have plenty of cash? Say 2, 3, 5 years? I hear of people having cash funds to use instead of having to cash in investments on the downside.