Stocks and shares isa

[LouiseEllaSue]

Hello could anyone with experience using a stocks and shares isa let me know what they think of it all?

Bit scared that we could lose it all if we went down that route.

It goes up and down in value but I certainly have not lost it all.

It is a long term investment, so plan for the money being in there 10+ years.

Do not buy individual company stocks.
Do buy a global fund which spreads your money over many thousands of stocks, so if a company fails, another replaces it.

Some podcast episodes for beginner investors:
meaningfulmoney.tv/UG4
meaningfulmoney.tv/UG5

Books:
The Simple Path To Wealth, JL Collins
The Meaningful Money Handbook, Pete Matthew
Pathfinders, JL Collins

I have stocks and shares isas with Virgin Money and Monzo. It's a longer game as they do fluctuate so I try not to check them too often but overall they've done well.

I do also have a cash isa with Zopa to try and balance the risk a bit.

We both had stocks and shares isas for many years until 2019. Up to that point we had taken an occasional healthy chunk of interest out and were very pleased with them.

However, our terrific IFA retired and sold his business to another IFA who we really didn’t like and seemed very disinterested in our account. Our isas started to lose a lot of money too. (He never even noticed whereas our previous IFA would have phoned us immediately suggesting he move the investments.)

He then told us he was semi retiring mid 2019 and wanted to pass us to a larger company which we flatly refused to agree to. We then moved the monies ourselves into two cash Isas which perform really well and we make a substantial amount every month so are very happy with our decision.

Definitely a long term venture where you really need the help of a good IFA IMO.

Investing in stocks and shares should be just one element of an overall financial strategy to build your wealth over time. This mitigates the risk of 'losing it all' - it will be one of many nest eggs in your basket.

If you have a financial plan - which might include savings in cash ISAs, buying your home, income protection, life insurance for dependants, investing in a pension, then assessing appetite for risk and starting small is a good way to begin.

It's important to understand that such investments are for the long haul as they will fluctuate in value in the short term. The idea is that over the longer term - 10 to 20 years, the returns on the investments will beat the interest on cash savings.

If you wanted to start in a small way, look out for offers for new customers in April - Wealthify did one last year through an MSE link - invest £75 and leave it invested for a year to get a £75 bonus top up. They offer a simple risk profile quiz to help you decide which of their 5 funds to choose - from cautious to adventurous.
Starting small and garnering such sweetener offers means you will at least receive your initial investment back after one year if you change your mind. It will give you some experience of opening and monitoring an investment online, as well as learning about your risk profile.

You are highly unlikely to lose it all, as stocks and shares funds invest in multiple underlying companies. Even in a high profile collapse fund like Woodford, people got some money back. If you only have a very small amount to invest and/or need it to not go down at all, do cash instead. You should diversify, so invest in funds across sectors eg one American, one emerging markets, one European etc. Historically, stocks and shares outperform cash over time. That is not a guarantee.

@JadeSeahorse

However does your cash isa make money?

@WillbeatJanuaryblues. Our cash ISAs are doing really well.👍

We make several hundreds per month interest with no risk.

We are in our 60's/early 70's now so too old to take a long term risk any longer hence we are delighted with our decision.

I would still be in favour of a stocks and shares ISA but if you have enough years to take the gamble and if you have a good IFA.

If your time horizon is long enough (>5 years but ideally >10 years) then it's a no brainer. Find one with the lowest fees as they compound too. I would recommend Vanguard as a platform, global equity index funds. Chuck it in and just forget about it, maybe check it once a quarter.