Junior ISA questions?

paulstevo

Have a junior ISA running for our daughter with NS & I . Value 18k .
With current discussions on stocks and shares ISAs would it be advantageous for us to move this to a Junior Stocks and shares ISA pre maturing.

Woodstok2000

Only if you (or your daughter) are investing long term and don't plan to use the money any time soon.  The ISA will be hers when she turns 18, so the risk would be if there's a downturn she may get an ISA with e.g. £14k in it, and decide she wants to spend it. She's still up £14k, but would you be happy she got less than you put in?

Keep_pedalling

How old is your daughter?

Albermarle

paulstevo said:

Have a junior ISA running for our daughter with NS & I . Value 18k .
With current discussions on stocks and shares ISAs would it be advantageous for us to move this to a Junior Stocks and shares ISA pre maturing.

Normally it is advised to have a Junior S&S ISA for young children, as the longer you hold investments the better.

Like with all investments if you start to approach the time when you will want to withdraw money, then better to change to cash.

Sounds like you are maybe thinking of doing it the wrong way round?

Alexland

Keep_pedalling said:

How old is your daughter?

And when does she expect to spend the money?

Most S&S investing is for minimum periods of 5 years preferably much longer.

There are options for less than 5 years however they provide cash-like returns.

Woodstok2000

Alexland said:

Keep_pedalling said:

How old is your daughter?

And when does she expect to spend the money?

Most S&S investing is for minimum periods of 5 years preferably much longer.

There are options for less than 5 years however they provide cash-like returns.

This is misleading. Stocks and shares isas don't have a minimum term, although 5 years is a good minimum to consider. Also there are no guaranteed returns - you could lose all your money tomorrow, or double it in a week if you took a massive gamble. 

Alexland

Woodstok2000 said:

Alexland said:

Keep_pedalling said:

How old is your daughter?

And when does she expect to spend the money?

Most S&S investing is for minimum periods of 5 years preferably much longer.

There are options for less than 5 years however they provide cash-like returns.

This is misleading. Stocks and shares isas don't have a minimum term, although 5 years is a good minimum to consider. Also there are no guaranteed returns - you could lose all your money tomorrow, or double it in a week if you took a massive gamble. 

I was talking about investing not gambling.

Most informed investors would agree that if S&S investing in volatile (non cash-like) investments then it will require a minimum number of years (some people say as little as 3 which seems irresponsible as a rule of thumb but obviously it depends on the investment option chosen) to adequately reduce the chance they need to withdraw while their assets are worth less than they either paid into the account or could have achieve using cash savings.

Yes technically people might get lucky and make a quick buck or be happy to sell at a loss but people should consider S&S investing has a minimum term (even if the account products allow withdrawals).

I don't know what in the above leads you to think I suggested there were guaranteed returns. Total loss is highly unlikely when making mainstream sensible investments maybe if betting on individual company shares etc rather than building diversified portfolios.

Woodstok2000

You mentioned 'cash like returns', which is unhelpful for anyone not familiar with stocks and shares or investments. Cash returns (i.e. interest) are guaranteed up to a relatively high value and that implication  could be drawn for what you are proposing too. No stock/share investments are guaranteed and you are always at risk, no matter how small, of losing your money.

Alexland

Woodstok2000 said:

You mentioned 'cash like returns', which is unhelpful for anyone not familiar with stocks and shares or investments. Cash returns (i.e. interest) are guaranteed up to a relatively high value and that implication  could be drawn for what you are proposing too. No stock/share investments are guaranteed and you are always at risk, no matter how small, of losing your money.

There are S&S investments with cash-like returns such as short duration gilts, issued and underwritten by the treasury, that provide a higher level of protection on large amounts than your would get from a savings account where the money gets mixed up with the bank's lending business and you are only protected up to FSCS limits.

If the treasury don't have the money to repay the gilt they can print more as they control the currency.

eskbanker

Woodstok2000 said:

You mentioned 'cash like returns', which is unhelpful for anyone not familiar with stocks and shares or investments. Cash returns (i.e. interest) are guaranteed up to a relatively high value and that implication  could be drawn for what you are proposing too. No stock/share investments are guaranteed and you are always at risk, no matter how small, of losing your money.

Cash-like returns doesn't imply cash-like risks?

Albermarle

Woodstok2000 said:

Alexland said:

Keep_pedalling said:

How old is your daughter?

And when does she expect to spend the money?

Most S&S investing is for minimum periods of 5 years preferably much longer.

There are options for less than 5 years however they provide cash-like returns.

This is misleading. Stocks and shares isas don't have a minimum term, although 5 years is a good minimum to consider. Also there are no guaranteed returns - you could lose all your money tomorrow, or double it in a week if you took a massive gamble. 

You are right that there are no guaranteed returns, but normally S&S ISAs do not offer ultra high risk investments were you could lose the lot in a day ( or even a year) .
They tend to only offer mainstream regulated investments where there is no chance of 100% loss. ( unless maybe there was a nuclear holocaust and then it would not matter anyway )
Some offer individual company shares, which are pretty risky, but you would have to be pretty reckless to just buy one company's shares.