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Quilter S&S ISA - 7%

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  • droopsnoot
    droopsnoot Posts: 1,870 Forumite
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    boingy said:
    I can't be the only bystander who saw the title of this thread and thought there was a new ISA offering 7% return. My mouse button has never been clicked so quickly.  :D

    7% loss in 5 years is pretty bad. What stocks/funds does the ISA invest in? What are the management fees? Was this investment via a financial adviser?

    All else being equal, I would take the loss and invest it in something else.
    I did wonder what kind of an S&S ISA would quote a percentage return, as that's not how S&S ISAs work.

    The down side of taking the loss is that you're turning a theoretical loss into an actual one - without knowing what the OP has invested in, it's impossible to say whether that might be the correct thing to do, whether there's a chance of their investment returning to profit. My first step into investing was in November 2000, within a couple of years I was showing over 40% drop in value, if I'd sold out at that point I'd have missed out on it coming back up in subsequent years.
  • boingy
    boingy Posts: 1,912 Forumite
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    boingy said:
    I can't be the only bystander who saw the title of this thread and thought there was a new ISA offering 7% return. My mouse button has never been clicked so quickly.  :D

    7% loss in 5 years is pretty bad. What stocks/funds does the ISA invest in? What are the management fees? Was this investment via a financial adviser?

    All else being equal, I would take the loss and invest it in something else.
    I did wonder what kind of an S&S ISA would quote a percentage return, as that's not how S&S ISAs work.

    The down side of taking the loss is that you're turning a theoretical loss into an actual one - without knowing what the OP has invested in, it's impossible to say whether that might be the correct thing to do, whether there's a chance of their investment returning to profit. My first step into investing was in November 2000, within a couple of years I was showing over 40% drop in value, if I'd sold out at that point I'd have missed out on it coming back up in subsequent years.
    My greed goggles blocked out the S&S bit so I just saw ISA 7%.  :)

    I agree that sometimes funds have a bad couple of years and then recover but this is across 5 years. Even if it starts to recover there is probably another fund that will grow more quickly. We're speculating because we don't know exactly what the underlying investments were but sometimes it's best to just take your medicine and move on.
  • dunstonh
    dunstonh Posts: 119,679 Forumite
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    I agree that sometimes funds have a bad couple of years and then recover but this is across 5 years.
    It doesn't matter that its across 5 years when the five year period has been volatile and you are looking at it not long after the low point.
    Q4 2018 had a significant loss and caused 2018 to end negative.
    Q1 2020 had the third biggest fall this millennium
    Nov 2021 had the biggest fall in low risk assets (measured by volatility) for 100 years.  Gilts lost 40%  when a crash is normally considered 5%.

    Any portfolio that had a notable weighting towards technology and gilts suffered.

    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.
  • boingy
    boingy Posts: 1,912 Forumite
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    dunstonh said:
    I agree that sometimes funds have a bad couple of years and then recover but this is across 5 years.
    It doesn't matter that its across 5 years when the five year period has been volatile and you are looking at it not long after the low point.
    Q4 2018 had a significant loss and caused 2018 to end negative.
    Q1 2020 had the third biggest fall this millennium
    Nov 2021 had the biggest fall in low risk assets (measured by volatility) for 100 years.  Gilts lost 40%  when a crash is normally considered 5%.

    Any portfolio that had a notable weighting towards technology and gilts suffered.

    And what's your view about whether such an investment will recover more quickly than the general market grows, or even than the 5% cash interest rate the OP asks about? 


  • Albermarle
    Albermarle Posts: 27,871 Forumite
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    My greed goggles blocked out the S&S bit so I just saw ISA 7%.  

    You can see why people google ISA's and get some dodgy site offering a headline high 'guaranteed' rate and go for it !

  • adindas
    adindas Posts: 6,856 Forumite
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    edited 9 June 2023 at 12:39PM
    SJG1962 said:
    We have lost over 7% since opened in 2018, as well as missing out on interest we could have earned, overall a financial disaster.

    Should we cash in now and open a fixed saver account instead offering 5%+, tax free status not an issue. 
    Depending on what you invest, -7% is not that bad. We are in difficult time with all of geo political problems, uncontrollable inflation,etc. Keep in mind with a V-shape recovery an equity could raise 100%+ in less than two years or even less than a year, especially after the bear market.
    If I were you I would wait until they break even before taking another action and decide where I wanted to put the money. Flip Flopping with keep losing money has never been a good strategy. How are you feeling if after taking out your money with -7% loss and after two years it raises 50% (say). But this is not to suggest it could not happen the other way around. But from risk vs reward perspective which one is better ??
    Personal opinion, not an advice.
  • eskbanker
    eskbanker Posts: 37,155 Forumite
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    adindas said:
    If I were you I would wait until they break even before taking another action and decide where I wanted to put the money.
    Waiting until break-even is pretty arbitrary and would often be seen as an example of the sunk cost fallacy, i.e. a more logical approach would typically be to review the situation now to determine if this investment is still suitable for OP's objectives, risk tolerance, etc, rather than speculating about its short term direction.
  • adindas
    adindas Posts: 6,856 Forumite
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    edited 9 June 2023 at 12:49PM
    eskbanker said:
    adindas said:
    If I were you I would wait until they break even before taking another action and decide where I wanted to put the money.
    Waiting until break-even is pretty arbitrary and would often be seen as an example of the sunk cost fallacy, i.e. a more logical approach would typically be to review the situation now to determine if this investment is still suitable for OP's objectives, risk tolerance, etc, rather than speculating about its short term direction.

    That is why I said "Depending on what you invest". But looking into the OP case, losing -7% within five years, while other investors have lost much more than that is not bad investment. 
    A good investor already has a thesis when they started selecting their investment and will review their thesis when they want to take a further action.
    I am not provoking you need to keep your money tied blindly especially when there is high possibility you will lose much more ore even get liquidated, get de-listed. But with only -7% in the OP case this is hardly the case.
  • eskbanker
    eskbanker Posts: 37,155 Forumite
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    adindas said:
    eskbanker said:
    adindas said:
    If I were you I would wait until they break even before taking another action and decide where I wanted to put the money.
    Waiting until break-even is pretty arbitrary and would often be seen as an example of the sunk cost fallacy, i.e. a more logical approach would typically be to review the situation now to determine if this investment is still suitable for OP's objectives, risk tolerance, etc, rather than speculating about its short term direction.
    That is why I said "Depending on what you invest". But looking into the OP case, losing -7% within five years, while other investors have lost much more than that is not bad investment. 
    A good investor already has a thesis when they started selecting their investment and will review their thesis when they want to take a further action.
    I am not provoking you need to keep your money tied blindly especially when there is high possibility you will lose much more ore even get liquidated, get de-listed. But with only -7% in the OP case this is hardly the case.
    Yes, the middle point is what I was getting at - if OP has reached the point where they wish to review their investment (as they implicitly have in starting this thread) then now is the time to consider if any action is necessary, rather than setting an essentially arbitrary performance target of returning to original value before doing so.
  • dunstonh
    dunstonh Posts: 119,679 Forumite
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    And what's your view about whether such an investment will recover more quickly than the general market grows, or even than the 5% cash interest rate the OP asks about? 
    The OP hasn't given any info on the investments held.  So, that is difficult to say.  If you are referring to gilts and tech, then yes, they will recover.  Gilts are largely cyclical.  However, it does play out over a longer timescale than equities.     If you bought gilts whilst they were in the bubble, then you will be reliant on the increased yield as the unit price (if inc units) wont be getting back to those previous highs any time soon (possibly talking decades, if ever)

    Tech comes in and out of fashion and a lot of the recent falls are down to the previous large gains that were seen and created another tech bubble.  Tech companies were spending money like no tomorrow but have recently reigned it in and gone through cost cutting.  Plus, semi-conductor/manufacturing issues are moving away.   That bodes well for the future even if there was pain recently.   

    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.
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