bit confused as to how share isas work

dingle_3

hi,

i invest a small amount #80 each month with m&g recovery fund. in general the fund has performed well... obviously it's struggling at the moment due to stock market and poor performance in general... my question is, bearing in mind i am chucking money in there reguarly - i don't need access to teh money, but the investment (i am expecting) is going to start going down - is it generally considered best to keep investing even though it seems like i'm throwing money away - or to stop investing until the stock market starts to rise again?

also, i've recently invested 500pounds in asos shares - last week, have i invested at the top of the market or do you think they will rise again.

very new to these types of investments, previoulsy have pretty much stuck my money in banks/building societys - so am learning as i go - but don't really want to learn and lose my money in the process!

thanks in advance

Fergie73

Putting money in regularly is the best way to hedge against falls in the stock market. Yes, you lose on what's in there already, but as you're buying in every month, you're also buying low when it falls. If you keep on investing regularly, the stock market will come back up again at some point, and what you've bought at the bottom should make very good gains, hopefully off-setting losses you might have made on things bought at the top.

Don't know anything about asos, I'm afraid.

dingle_3

thank you fergie, so really - if i understand correctly - unless you need to pull the money from teh account - it's almost immaterial as to what the actual value of the fund is?

i.e.. i should just be focussing on how many units i'm purchasing and not monitoring the monetry value too often or too much.

it's a different mentality from a savings account isn't it!

Fergie73

thank you fergie, so really - if i understand correctly - unless you need to pull the money from teh account - it's almost immaterial as to what the actual value of the fund is?

i.e.. i should just be focussing on how many units i'm purchasing and not monitoring the monetry value too often or too much.

it's a different mentality from a savings account isn't it!

I'm quite a bad person to advise on that, as I can't do it. I always look at these things and measure them up against what a savings account would be doing. But in theory, yes.

I think the idea is that if you know you'll need the money over the next year or two, or you can't afford to take any losses on it, it's best off in a savings account. But if it's intended for the longer term, stick it away and don't worry about it too much. The stock market will go up and down, sometimes in a very volatile way. But if you're buying in regularly, then by default you'll be buying in at the best times when the values are low, so gaining from that.

If you stop paying in when the stock market is low and wait for it to start going up, you'll miss the best buying time. On the other hand, if you think there's going to be a 1929 style massive crash and it won't recover for 20 years, you'd be best to take everything out and not buy any more. If only we knew the future it would be so much easier.

Generally speaking, going by history, it does come back up though, so keeping on buying in while it's low is the best thing you can do.

ariba10

Shares are forever up and down.

If you are putting a fixed amount in each month you get more shares for your money when the price is down.