Starting a Junior ISA whist share prices are low?
Discussion
With the current drop in stock market prices coinciding with the start of a new ISA year, would you see this as a better time to start a Junior Stocks & Shares ISA for a child now, compared to if Covid19 hadn't happened and markets had remained the same? Whilst any dip in prices my affect existing investors, is there an advantage to becoming a new investor now?
My son is 13yrs old, and he has around £5,000 in savings, thanks to me putting money away for him since he was very young into a Halifax kids account, and also a Child Trust Fund (which I have topped up £120/year). I'm thinking of putting that £5k nd his CTF into a Junior ISA for him. I understand this is locked until he is 18 yrs old?
So, with the stockmarket being at a record low (but could go lower), surely his £5k+ lump sum used to start a JISA is in a better place to benefit from any return to share price normality?
My son is 13yrs old, and he has around £5,000 in savings, thanks to me putting money away for him since he was very young into a Halifax kids account, and also a Child Trust Fund (which I have topped up £120/year). I'm thinking of putting that £5k nd his CTF into a Junior ISA for him. I understand this is locked until he is 18 yrs old?
So, with the stockmarket being at a record low (but could go lower), surely his £5k+ lump sum used to start a JISA is in a better place to benefit from any return to share price normality?
Edited by LeadFarmer on Thursday 30th April 23:41
How much growth do you anticipate there to be in 5yrs keeping it where it is?
£500?
Some shares have moved that amount in a single day!
If you are risk adverse, stay away.
If you believe there is a recovery over 5yrs, then it would appear to be a great time to invest.
I’ve topped up my kids ISAs and am in the market.
Last years ,only is not looking too great, but I’m looking out 8 and 12yrs, and believe it will be better than the paltry interest earned in a bank.
£500?
Some shares have moved that amount in a single day!
If you are risk adverse, stay away.
If you believe there is a recovery over 5yrs, then it would appear to be a great time to invest.
I’ve topped up my kids ISAs and am in the market.
Last years ,only is not looking too great, but I’m looking out 8 and 12yrs, and believe it will be better than the paltry interest earned in a bank.
Westy65 said:
Yes investing whilst prices are low is clearly a good thing but with your sons investment time horizon probably being around 50 years or so, time in the market is more important than timing. Ie it is not when you invest but how long you are invested.
Although starting at (pluck number from sky) 5500 instead of 7700 has to make a difference over 50 years, no?LeadFarmer said:
thekingisdead said:
Which stock market are you referring to that’s at a record low?
I'm referring to the recent plummet in share prices in general. But isn't the FTSE 100 at a record low (or was)?I have attached these charts to give some perspective:
As you can see, markets are nowhere near being at record lows, though they are certainly down from their peak (particularly the FTSE).
So yes, now can be seen as being a very good time to start investing as you are effectively buying at a discount.
Whether markets fall further before recovering or are already recovering does not change the fact you are buying at this discount.
You have to be prepared for market volatility but if you ignore it for 5 years the likelihood is that it will provide higher returns than cash, though this is not guaranteed and cash is.
Another option could be to drip the money into markets over the next few months. That way if there are further falls then each instalment will be buying at a greater discount and so you will hold more stock when markets recover (this is known as pound cost averaging).
Of course if markets go up this works against you.
For what it's worth I have been too busy the last few weeks to add this year's allowance to my daughter's Junior ISA, but I am doing this today.
As you can see, markets are nowhere near being at record lows, though they are certainly down from their peak (particularly the FTSE).
So yes, now can be seen as being a very good time to start investing as you are effectively buying at a discount.
Whether markets fall further before recovering or are already recovering does not change the fact you are buying at this discount.
You have to be prepared for market volatility but if you ignore it for 5 years the likelihood is that it will provide higher returns than cash, though this is not guaranteed and cash is.
Another option could be to drip the money into markets over the next few months. That way if there are further falls then each instalment will be buying at a greater discount and so you will hold more stock when markets recover (this is known as pound cost averaging).
Of course if markets go up this works against you.
For what it's worth I have been too busy the last few weeks to add this year's allowance to my daughter's Junior ISA, but I am doing this today.
JulianPH said:
I started Googling S&P Index and arrived at a fish & chip shop in Ilfracombe. I think that is where I shall invest the £5k 
https://www.sandpfish.co.uk/
I expect their shares are cheap right now. Chip in.Gassing Station | Finance | Top of Page | What's New | My Stuff