MSE News: Junior Isas: should parents choose cash or shares?

Any chance of MSE not condemning investing up front by using a highly negatively emotionally loaded word like gambling in "to gamble on the markets"? If MSE does want to use a word with negative emotional loading "speculating" would be a somewhat better choice because:

investing: the long term trend is profits with variation in capital values along the way for investors.
gambling: the long and short term trend is losing for gamblers.
speculating: results are mixed but it implies higher risk than necessarily involved in investing.

If MSE doesn't want to use a word with negative emotional loading "investing" is an alternative.

Anyone comparing investments with savings should note that investment returns are quoted after the costs have been deducted, just as savings account interest rates are. The difference is that the savings costs aren't disclosed and that you can manage the costs to some extent by choosing where you put the investment money.

Be sure to use an appropriate view of risk for the child, not for yourself. You may be cautious but that's not an appropriate approach for a newborn with at least 18 years to go before they can get the money.

One of the sad facts of finance is that poorer parents are more inclined to use cautious approaches that make them and their children worse off long term. Do try to avoid this if you can when making long term choices for what to do with the money of the children. With your day to day finances you may have no choice but to be cautious.

Pinner Ram, it often will be best to use the allowances of the parents but the JISA has the possible advantage that it is owned by the child. This means that it is protected from bankruptcy of one or more parents. I haven't investigated its effect on means-tested benefits but assume that the child's name offers an advantage there as well. This isn't free because from the age of 16 he child can take control of the account if they wish, though not take money out until 18. Those ages may be contrary to the wishes of the parents for the money.

jamesd wrote: »

Pinner Ram, it often will be best to use the allowances of the parents but the JISA has the possible advantage that it is owned by the child. This means that it is protected from bankruptcy of one or more parents. I haven't investigated its effect on means-tested benefits but assume that the child's name offers an advantage there as well. This isn't free because from the age of 16 he child can take control of the account if they wish, though not take money out until 18. Those ages may be contrary to the wishes of the parents for the money.

James - you are (I believe) factually correct but you make a lot of assumptions about my knowledge of the subject (your comments could have been phrased differently!).

And, IMO, I feel it highly unlikely that bankruptcy and means testing will be relevant.

PR

ny chance of MSE not condemning investing up front by using a highly negatively emotionally loaded word like gambling in "to gamble on the markets"?

Many would consider that the gamble is actually going with the cash option as inflation risk is likely to be more damaging than investment risk.

Do you also notice how the options MSE gives are just two ends of the scale and nothing in between?

jamesd wrote: »

Dunstonh, I think that John did a quite good job given his space constraints.

Its just a shame that the text linking to it is rather biased as you pointed out!