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S&S ISA Question
barmeysmb1
Posts: 37 Forumite
I have £15k to invest and have followed over the years one or two companies that consistently rise and fall and are good investable companies.
My question is, is it possible to simply invest in a S&S ISA - purchasing shares from only the two companies i've followed, but choosing the moment to buy when there share price has fallen - and then obviously selling later when the price has risen ?
Additionally - the two companies in question rise and fall by a couple of euro each month - sometimes more - so can i buy then sell within a short period ?
ie Lets say theoretically both companies were 4 eur down on normal share price now and i bought now- then wait will next month or two (when usually they climb back up) and sell then ?
And hopefully just net a small profit, hopefully CGT free due to the SS ISA wrapper.
What are the barriers ? - obviously the risk is that it doesn't go up - but i'd like to understand the technical and practical barriers.
Yes - i am a newbie to this :-)
My question is, is it possible to simply invest in a S&S ISA - purchasing shares from only the two companies i've followed, but choosing the moment to buy when there share price has fallen - and then obviously selling later when the price has risen ?
Additionally - the two companies in question rise and fall by a couple of euro each month - sometimes more - so can i buy then sell within a short period ?
ie Lets say theoretically both companies were 4 eur down on normal share price now and i bought now- then wait will next month or two (when usually they climb back up) and sell then ?
And hopefully just net a small profit, hopefully CGT free due to the SS ISA wrapper.
What are the barriers ? - obviously the risk is that it doesn't go up - but i'd like to understand the technical and practical barriers.
Yes - i am a newbie to this :-)
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Comments
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Yes, you can buy and sell to your heart's content once the funding is within the S&S ISA wrapper (and is kept there), which does indeed protect it from CGT.
Most on here would advise strongly against the risks inherent in dabbling in individual shares, and trading rather than genuinely investing (despite your belief that you know how they'll perform), and your profit will be diluted by dealing costs when buying and selling, but if you're prepared to learn these lessons the hard way and already have enough of a readily-accessible cash buffer elsewhere, fill your boots!
If the shares are priced in euros, make sure that the platform you choose supports share purchases from the relevant exchange....0 -
Thanks @Eskbanker,
I hadn't considered currency limitations with regard to platform choice.
Once the cash is inside the ISA wrapper - does it all have to be committed to shares at some point or is it akin to 'loading' an account and then deciding when/what portion/all to buy shares with. ie if i deposit £15k but decide to purchase only £5k worth of shares - is that fine ? (with a view to purchasing more once i've selected /made other choices) ?0 -
I think your lack of even rudimentary detail on the process of buying and selling shares makes it unlikely that this is a good idea.0
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It wasn't currency limitations as such that I was referring to, but the fact that UK S&S platforms are naturally oriented to funds and shares widely available in the UK. Many will deal with shares on other exchanges but not all, so if you're set on buying euro-denominated shares then these will presumably be listed on another exchange, so make sure you pick a platform that handles the exchange(s) you have in mind.barmeysmb1 wrote: »I hadn't considered currency limitations with regard to platform choice.
The process of depositing money into a S&S ISA is separate from actually investing in once there so yes, you can put the £15K in and defer your decision(s) on what to spend it on until later.barmeysmb1 wrote: »Once the cash is inside the ISA wrapper - does it all have to be committed to shares at some point or is it akin to 'loading' an account and then deciding when/what portion/all to buy shares with. ie if i deposit £15k but decide to purchase only £5k worth of shares - is that fine ? (with a view to purchasing more once i've selected /made other choices) ?
Also make sure you understand all costs involved in buying, holding and selling shares or other investments, as this will hopefully make it clear just how much your chosen investments need to increase by to leave you ahead.
And at the risk of labouring the point, investing should be seen as a long-term exercise. If you think you're going to be able to predict when your pet shares will rise and fall, pause to reflect on what makes you think you know better than the professionals (and the other amateurs). Put together, it's all about 'time in the market' not 'timing the market'.
And don't forget rule #1, diversify - putting your eggs in a couple of baskets is foolhardy when there are collective investments available that hedge your risk across hundreds or thousands....0 -
[FONT=Verdana, sans-serif]You need to work out the total cost of a buy + sell to see how much the share would have to increase just to break even.
[/FONT] [FONT=Verdana, sans-serif]This will include 2x dealing fee, stamp duty, buy/sell price spread and lastly a currency exchange fee.
[/FONT] [FONT=Verdana, sans-serif]Depending on the share you are following you could easily need a 2%/3% or more movement in share price to break even.
[/FONT] [FONT=Verdana, sans-serif]If you can get a historic daily list of the share price over several years plot your plan on a spreadsheet and work out how you would have done.[/FONT]0
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