Shares ISA, should I sell?

Jfuller

I currently have a shares tracker ISA with RBS (was Direct Line). I've had it a few years and gradually built it up to around £4500. With the current stock market volatility I'm tempted to take £3600 out and put it in my cash ISA. The shares ISA has always been a long term investment and I intend to keep it going for at least another 10 years. I realise that the value of my ISA has probably dropped 10% or so over recent months but I don't want to see it's value plummet. What would people advise, should I sit tight or sell?

Thanks

John

Liz_the_Whizz

You could pack it all in and go back to the world of cash. Depends partly how much cash you have got. If you have invested too soon, then it's probably the best thing.

But the whole point of investing is that bad years do come along. This last 6 months has been pretty awful. But there are some stats I read recently (might have been Hargreaves Lansdown sales blurb, so vested interest I know) but I thought it was interesting.

Historically, shares have outperformed cash in 71 out of last 100 years, so there is a 67% chance that shares will perform better than cash in any one year. If you invest in shares for 10 consecutive years, the probability of shares doing better is 93% and over 18 years, 99%.

The real issue for you is that your money is probably not in the best investment, these bank things never are. If you decide to stick with it, do yourself a big favour - transfer it to Hargreaves Lansdown and get yourself access to some proper funds. That way at least you'll be in a better position to decide if investing is for you.

Good luck.

Jfuller

Thanks for the advice.

John

dunstonh

Currently you are in a medium/high risk investment with the potential to lose 50% in a stockmarket crash (it lost 45% 6 years ago). Currently, you are concerned over a minor 10% drop which is nothing. So, it appears you are investing significantly above your risk profile.

You are also 100% investing into one area. There is little or no diversification. With your risk profile you should have some fixed interest, maybe some property now and perhaps a lower risk equity fund and a little in something a bit more specialist. All of which can be done within the ISA without the need to withdraw from it.

boy_3

Shares ISA for people who understand shares or at least funds. Also, as dunstonh mentioned, your income profile should be higher (and hence risk profile). If you have only built up 4500 in few years, that means you are a low saver and probably can't take the risk here. You need to keep in mind that once you take the money out of shares, you can't put it back again. Shares ISA are best for people who can maximise the investments every year and forget about the money while investing it in long term shares, fund, etc. So, you need to make a choice whether you can fortget about this money for few years? By the way, you can always convert the shares into cash and still keep it in the shares ISA for a while before you want to start investing in shares again. This will take care of your current volatile market concerns. In fact, most people do that when they don't have confidence in market.