Investment ISA

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Inchy
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Investment ISA

Post by Inchy » Thu Jan 02, 2020 10:02 am

Was wondering if anyone could give me advise regarding an investment ISA. There is lots of advise online but always unsure if there is any conflict of interest/ just people taking nonsense, so I thought it best to ask on here.

I’ve got some savings currently in a Santander 123 account and I feel the valve of that money is just going down as interest rates a poor and cost of living is increasing, therefore I am thinking of putting a chunk of the savings in an investment ISA to see if I can get better returns.

I am a total novice at this but have done a little reading on Money saving expert and I have looked at a few platforms (vanguard, Hargreaves Lansdown etc).

I am aware that my potential investments my go down as well as up and am willing to take some risk to see a better return. I am willing to leave the cash in for the next couple of decades at least. To be honest it’s more likely to be for the next 30 years until I retire.

Has anyone get any advise regarding this process?
If you have an investment ISA what % returns are you seeing?
Is now a good time to invest with the instability brexit may bring?

Cheers

Barry_Chuckle
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Re: Investment ISA

Post by Barry_Chuckle » Thu Jan 02, 2020 10:09 am

NFU Mutual, with profit ISA returned 8.4% last calendar year. Not too shabby during brexit uncertainty and lower end of risk scale.

kaptin1
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Re: Investment ISA

Post by kaptin1 » Thu Jan 02, 2020 10:13 am

For an ISA-able size investment you probably won’t be able to get advice, but there are digital investment sites such as www.nutmeg.com which can help you tailor your investment to your risk appetite and return requirements.

aggi
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Re: Investment ISA

Post by aggi » Thu Jan 02, 2020 10:39 am

I use Nutmeg, mainly for simplicity and speed rather than absolutely maximising returns. Returns are decent, something like 6% p.a. at the moment but obviously there is risk. They did pretty well during some of the Brexit upheaval, particularly in 2016.

If you did more reading up and were willing to do more yourself then you can probably find something with lower fees but it may require a more active role (I just have a direct debit to Nutmeg each month and that's it).

However, if you're considering this as a retirement investment it may be worth putting at least some into a pension rather than an ISA which will likely be the more tax efficient approach.

Bfcboyo
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Re: Investment ISA

Post by Bfcboyo » Thu Jan 02, 2020 10:49 am

Long term go for a Government LISA or first time buyers ISA the rates are great.

https://www.gov.uk/lifetime-isa

Your first chunk of savings should go into one of these then see the above posts for further savings.

jollyjack
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Re: Investment ISA

Post by jollyjack » Thu Jan 02, 2020 10:51 am

Read The Motley Fool pages, good sound stuff in there about all financial matters.

You can do it yourself to set up a tracker investment fund or take financial advice and pay a small fee for the advice (appetite to risk analysis etc).

Investments are different from savings, you put them away and wait, time in the market, not timing the market.

taio
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Re: Investment ISA

Post by taio » Thu Jan 02, 2020 10:59 am

Bfcboyo wrote:
Thu Jan 02, 2020 10:49 am
Long term go for a Government LISA or first time buyers ISA the rates are great.

https://www.gov.uk/lifetime-isa

Your first chunk of savings should go into one of these then see the above posts for further savings.
LISA is a great product but only in specific circumstances. So unless the OP wants to save a deposit for a first home which I dont think is the case it wouldn't.be the right product for him. And better options for retirement planning. Stocks and shares ISA is the best investment opportunity medium term with easy access to the funds. Not without risk obviously.

TVC15
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Re: Investment ISA

Post by TVC15 » Thu Jan 02, 2020 11:10 am

Taio is correct the LISA does not sound right for you.
Stocks and shares ISA sounds best if you are happy with the risk.
The issue is that there are thousands of different funds to choose from and they carry a spectrum of risk from low to high...but fundamentally a large chunk of them will go up or down based on the performance of the Dow Jones because the other world stock markets fluctuate in the same direction as the Dow.
There are of course specialist funds which avoid some of the major compromises and sectors the majority are investing in but these tend to be riskier.
The funds are ranked on performance but this is also a bit of a minefield as fund managers can change and if you are investing in a fund that is already ranked number one or near the top then the fund price is likely to be already high.
Personally I would talk to a financial advisor initially if it’s a pretty significant amount you are talking.
If it’s just a few hundred you can use one of the sites mentioned above and do your own research but it’s not that easy given the vast array of choice.

Bfcboyo
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Re: Investment ISA

Post by Bfcboyo » Thu Jan 02, 2020 11:11 am

taio wrote:
Thu Jan 02, 2020 10:59 am
LISA is a great product but only in specific circumstances. So unless the OP wants to save a deposit for a first home which I dont think is the case it wouldn't.be the right product for him. And better options for retirement planning. Stocks and shares ISA is the best investment opportunity medium term with easy access to the funds. Not without risk obviously.
Agreed but depending on investment level I'd be putting that first 4k risk free into the LISA with further investment in different areas.

My personal preference of course.

taio
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Re: Investment ISA

Post by taio » Thu Jan 02, 2020 11:20 am

Bfcboyo wrote:
Thu Jan 02, 2020 11:11 am
Agreed but depending on investment level I'd be putting that first 4k risk free into the LISA with further investment in different areas.

My personal preference of course.
I wouldn't unless it was for a first home or wanted to lock in £4k until the age of 60 which seems pretty pointless considering inflationary factors.

Lowbankclaret
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Re: Investment ISA

Post by Lowbankclaret » Thu Jan 02, 2020 11:20 am

The Vanguard platform is the cheapest on the market.

They are also launching a SIPP in the coming months.

If your serious about leaving it for your retirement, consider a SIPP.

The reason I say this is because it likely you have paid tax on the money you have saved. If you put that money in a SIPP the government will give you the tax back. That means you instantly gain 20%. There limits on the amount you can put in a year.

However the down side is you cannot get at the money if you need it until your 55 and the gov can move that age by changing the pension laws.

Perhaps consider a SIPP and an ISA.

If your considering investing yourself. Index link trackers are the cheapest option regarding charges. They also over the long term perform just as well as managed funds.
S and P 500 trackers have historically done well.
Ftse250 trackers as well.

cricketfieldclarets
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Re: Investment ISA

Post by cricketfieldclarets » Thu Jan 02, 2020 11:23 am

I use paul Schofield in burnley. Part of st james place. Came highly recommended they're expensive vs doing it yourself but I have not enough time or nous to do it myself.

To add I've actually not made anything in six months which is slightly concerning. However it was / is with a long term view.

That said if after twelve months it's still the same will be reviewing it.

taio
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Re: Investment ISA

Post by taio » Thu Jan 02, 2020 11:32 am

I think the choices are fairly clear for Inchy:

Short/medium/long term and flexible savings:

- Cash ISA - risk free but you'll only get about 1.5%
- Overpay your mortgage - depending on your interest rate
- Stocks and shares ISA - risk/reward.

Long term retirement planning:

- Assuming you have a NHS pension which are still very attractive you could consider an AVC and the tax benefits they attract.
Last edited by taio on Thu Jan 02, 2020 11:40 am, edited 1 time in total.

Bfcboyo
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Re: Investment ISA

Post by Bfcboyo » Thu Jan 02, 2020 11:33 am

cricketfieldclarets wrote:
Thu Jan 02, 2020 11:23 am
I use paul Schofield in burnley. Part of st james place. Came highly recommended they're expensive vs doing it yourself but I have not enough time or nous to do it myself.

To add I've actually not made anything in six months which is slightly concerning. However it was / is with a long term view.

That said if after twelve months it's still the same will be reviewing it.
You should have gone with Stratton Oakmount.

cricketfieldclarets
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Re: Investment ISA

Post by cricketfieldclarets » Thu Jan 02, 2020 11:36 am

Bfcboyo wrote:
Thu Jan 02, 2020 11:33 am
You should have gone with Stratton Oakmount.
:lol: :lol: probably right.

mealdeal
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Re: Investment ISA

Post by mealdeal » Thu Jan 02, 2020 11:46 am

Do it yourself, its really not that hard and as the Motley Fool says, 'be your own financial advisor'.

Just get a FTSE all share index tracker and slowly feed your chunk of money into it over a 6 month period.

Bfcboyo
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Re: Investment ISA

Post by Bfcboyo » Thu Jan 02, 2020 11:51 am

cricketfieldclarets wrote:
Thu Jan 02, 2020 11:36 am
:lol: :lol: probably right.
Paul Jordan Belfort Schofield

His sales folders and graphs are nice.

Please read all the small print though.

cricketfieldclarets
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Re: Investment ISA

Post by cricketfieldclarets » Thu Jan 02, 2020 11:53 am

Bfcboyo wrote:
Thu Jan 02, 2020 11:51 am
Paul Jordan Belfort Schofield

His sales folders and graphs are nice.

Please read all the small print though.
Are you speaking from experience?

Inchy
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Re: Investment ISA

Post by Inchy » Thu Jan 02, 2020 12:33 pm

taio wrote:
Thu Jan 02, 2020 11:32 am
I think the choices are fairly clear for Inchy:

Short/medium/long term and flexible savings:

- Cash ISA - risk free but you'll only get about 1.5%
- Overpay your mortgage - depending on your interest rate
- Stocks and shares ISA - risk/reward.

Long term retirement planning:

- Assuming you have a NHS pension which are still very attractive you could consider an AVC and the tax benefits they attract.
Sorry for sounding stupid but I have no idea what a AVC is.

I initially want to invest about 10k and then can keep adding to it every month.

I also wondered wether it would be better to just putting it on my mortgage

levraiclaret
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Re: Investment ISA

Post by levraiclaret » Thu Jan 02, 2020 12:54 pm

AVC is Additional Voluntary Contributions into your existing scheme if allowed, if not into a personal pension plan.

I would look first at paying down your mortgage unless you are on a very low interest rate deal, only drawback is you can no longer quickly access the cash.

ClaretLoup
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Re: Investment ISA

Post by ClaretLoup » Thu Jan 02, 2020 1:59 pm

As with any investment, it's best not to put all your eggs in one basket. Personally I have a stocks and shares ISA with Fidelity and invest on-line in funds which can go up and down so if you are going to do it yourself, you need to keep an eye on things. Also there is a monthly charge to pay (0.2%) when they will take any spare cash you have in your account or chip a bit off your investments. The financial world is a chisellers paradise.

Most funds relate to the stock exchange so they go up and down but in the long term since the bank crash they have gone up at a very decent rate, however as we are at the top of the market at the moment it is a bit risky to pile in. There are also funds which relate to the bond market ( Corporate, Strategic and High yield) which are steadier but can also go up and down. Many funds also have a yield like shares do which, if you own them in a ISA wrapper, would be paid out tax-free.

It is difficult to find funds that do not vacillate with the markets but I have picked up quite a little cracker back in August, - VT Gravis Clean Energy
In the last year it has increased 33% with very few dips along the way. So up to present it has been safe to invest, however equally it could go into reverse, one never knows DYOR as they say. It also has a nice little yield which is paid quarterly but the price dips every 3 months ( goes ex-Dividend) usually by the same amount on the pay out date which was today so now is a good time to buy in. You can also have a nice warm glow as you can make money by saving the planet.

Via this link to TrustNet you can track this funds performance as well as any other fund on the market via Units Trusts and OEIC under Investment type.
Plus assess lots of other data.

https://www.trustnet.com/factsheets/o/o ... -c-inc-gbp

Another relatively low risk performer has been Kames Diversified Monthly Income It does fluctuate with the markets but is not as volatile as the stock exchanges as it is a mix of shares and bonds. It has delivered quite a handy 18% growth in the year with a divi/yield of nearly 5%. Bear in mind the FTSE rose about 15% from this time last year but was way more volatile.

https://www.trustnet.com/factsheets/o/k ... come-b-inc

Lowbankclaret
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Re: Investment ISA

Post by Lowbankclaret » Thu Jan 02, 2020 3:58 pm

Inchy wrote:
Thu Jan 02, 2020 12:33 pm
Sorry for sounding stupid but I have no idea what a AVC is.

I initially want to invest about 10k and then can keep adding to it every month.

I also wondered wether it would be better to just putting it on my mortgage
I have spoken to several people who put money in AVC’s and none were happy with the returns or the pension they received from it.

Lowbankclaret
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Re: Investment ISA

Post by Lowbankclaret » Thu Jan 02, 2020 4:03 pm

Currently this is where my money is going. It’s a low cost tracker, but the S and P 500 has done around 10% per year on average for many years.
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clarethomer
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Re: Investment ISA

Post by clarethomer » Thu Jan 02, 2020 8:46 pm

Here is my opinion if you want some food for thought

1 - Long term investments - the longer you can leave the less riskier they become. Therefore don't feel like you need to take a cautious approach if you are investing for the long term. (See graph below)

2 - Make sure that you leave sufficient emergency fund/access to cash to ensure you don't need to cash in your investment at the worst possible time.

3 - It is rarely possible for a fund manager to outperform the market consistently so you need to consider the value they add to your investment

4 - If you pay for active management, your fund costs will be higher.

5 - The more cost you carry, the more returns you need to make a profit

6 - There is no such thing as 'you pay for what you get' when it comes to investing. There are expensive and cheap flops and there are expensive and cheap successes.

7 - You should consider passive investments to reduce cost, especially if you have the intention to invest for the longer term.

8 - Diversification is important so you can try and have aspects of your investments performing in different market conditions

9 - Don't follow the flavour of the month - property funds and star fund managers have been bad news stories for investors of late.

10 - There is always something going on in the world which will impact money - therefore just being in the market for a long period of time is better than trying to time the market in terms of when to get in and get out.

You will see from the graph below what the FTSE has done over 30 years. Investing an a passive fund that tracked the FTSE would have given you excellent returns because whilst there have been ups and downs you can see the longer term trends.
FTSE_100_index_chart_since_1984.png
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You need to understand what an Adviser does to add value to your investment.

Typically they will ensure that you are in the right tax wrappers, they will ensure your investment matches your risk and they will ensure that you have enough money to protect you in the downtimes to ensure you can remain invested. They can give you peace of mind if you have questions too. However all of this comes at an initial and ongoing cost usually.

If you are just starting out and are happy to leave for the long term. I wouldn't be using a firm like St James Place - not because their advice is bad but because they are typically at the more expensive end of the market.

You won't go too far wrong looking at a platform and choosing some funds for yourself if you can understand the risk level they are taking and get a spread of funds or find a fund that has lots of diversity within it.

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