First ever S&S ISA - getting nervous already
Discussion
OK, I'm completely new to investing and the Stock market. I just opened my first ever S&S ISA with my regular bank using a small lump sum (£500) and I set up a monthly £50 investment just to get a feel for how it all works. I have a larger lump in a cash ISA which I'm needing for a re-mortgage next year. The Cash ISA is making a few pence of interest against over £10k savings.
When setting up the S&S ISA, I actually chose the highest risk category and I wanted to have a punt with relatively low sums. I understand that values can go up or down and that the high risk option can go higher or lower than average. I also appreciate that investments are typically longer term.
Being new, I was interested to see how things develop in the first few days and weeks. After 1 day, I logged in to see that I have already lost about £6. Not a great start!
My question: Is this a really stupid time to be investing in a S&S ISA?
The whole thing is managed by the Bank so I don't know which companies it invests in, but don't they chose prosperous companies like Amazon, vaccine producing Pharma, PPE producers, growth next-gen tech companies, etc.
Should I be regularly checking the value and getting ready to bail out if the value drops below a set value?
As mentioned, I'm completely new to this, so please go easy on me!
When setting up the S&S ISA, I actually chose the highest risk category and I wanted to have a punt with relatively low sums. I understand that values can go up or down and that the high risk option can go higher or lower than average. I also appreciate that investments are typically longer term.
Being new, I was interested to see how things develop in the first few days and weeks. After 1 day, I logged in to see that I have already lost about £6. Not a great start!
My question: Is this a really stupid time to be investing in a S&S ISA?
The whole thing is managed by the Bank so I don't know which companies it invests in, but don't they chose prosperous companies like Amazon, vaccine producing Pharma, PPE producers, growth next-gen tech companies, etc.
Should I be regularly checking the value and getting ready to bail out if the value drops below a set value?
As mentioned, I'm completely new to this, so please go easy on me!
Who have you invested with out of interest? I would expect that most mass market S&S ISAs explain that investments should be long term (with a minimum of 5 years).
As above though, set up your monthly amount and forget. If you think you’ll need the money out of it in the short term, a S&S isa isn’t the right place for your money.
As above though, set up your monthly amount and forget. If you think you’ll need the money out of it in the short term, a S&S isa isn’t the right place for your money.
The worst thing you can do is check stuff like this too often. I try to make a habit of only checking values once a month, and even then, it's just for the sake of having an idea, not because I intend to change anything. If it makes you feel any better, my first annual statement after a year in an S&S ISA showed a drop of, IIRC, around 40%.
I started my first S&S isa just before COVID hit.
20% loss virtually overnight.
It’s recovered and as of yesterday I’m nearly 6% up on initial investment with a fixed monthly top up so can’t complain.
Don’t worry, it’s a long term thingy and there will be peaks and troughs but will even out over time.
20% loss virtually overnight.
It’s recovered and as of yesterday I’m nearly 6% up on initial investment with a fixed monthly top up so can’t complain.
Don’t worry, it’s a long term thingy and there will be peaks and troughs but will even out over time.
I also started my first S&S isa in February, Lumped in off the bat with a couple £thousand. a couple weeks later I was down just over £1000. Today I am up just over £1000. Now I wish I had got more in after the first big drop.
Give it a couple weeks/months, You will soon stop caring about the losing amounts. I have cash sitting doing nothing and the down days I just look forward to getting more in.
Give it a couple weeks/months, You will soon stop caring about the losing amounts. I have cash sitting doing nothing and the down days I just look forward to getting more in.
valiant said:
I started my first S&S isa just before COVID hit.
20% loss virtually overnight.
It’s recovered and as of yesterday I’m nearly 6% up on initial investment with a fixed monthly top up so can’t complain.
Don’t worry, it’s a long term thingy and there will be peaks and troughs but will even out over time.
I feel a bit guilty about complaining about my lost £6 now! 20% loss virtually overnight.
It’s recovered and as of yesterday I’m nearly 6% up on initial investment with a fixed monthly top up so can’t complain.
Don’t worry, it’s a long term thingy and there will be peaks and troughs but will even out over time.
I'll stick with it. I might even come back to update this thread every now and again to act as inspiration/a warning to other would-be investors.
FreeLitres said:
It's with Natwest Invest. It's a pretty basic platform I think, designed for beginners.
I'm going to watch it for a week or so, then I might shift it to a lower risk portfolio if I find it's losing a load of money.
If you’re doing that after a £6 drop it’s not for you. I'm going to watch it for a week or so, then I might shift it to a lower risk portfolio if I find it's losing a load of money.
I have a S&S ISA that I put £20k into. Opened it end of April. I’m actually picking the shares myself. Currently it is £1k down. At best it was £4K up at worst it was £9k down. Mainly because I messed up an investment but as it’s recovering well now I’m not bothered. My plan is to leave this until retirement, so 30 years.
FreeLitres said:
When setting up the S&S ISA, I actually chose the highest risk category and I wanted to have a punt with relatively low sums.
Or you could have a larger sum at lower risk and make the same gain?FreeLitres said:
My question: Is this a really stupid time to be investing in a S&S ISA?
It depends what you invest in! But generally, things seem to be staggering back up. And you certainly won't make any money with cash on deposit, indeed you'll get poorer thanks to inflation.FreeLitres said:
The whole thing is managed by the Bank so I don't know which companies it invests in, but don't they chose prosperous companies like Amazon, vaccine producing Pharma, PPE producers, growth next-gen tech companies, etc.
I suppose the contents of their fund is a 'trade secret' but also I think you should be able to know where your money is. You could of course simply buy shares in the companies you like and cut out the bank...FreeLitres said:
Should I be regularly checking the value and getting ready to bail out if the value drops below a set value?
If you want to make a small fortune from a large one, yes. Selling low crystallises the loss. Your fund is 'down' by £6 but it's only a loss if you sell it. I'd only sell low if I had some sure-fire better place to put it. When stuff drops below a certain value that can be the time to buy, not sell.Also, find out how much the bank charges for the honour of playing with your money. Charges eat into gains and over time can make a big difference to the bottom line.
Stocks and shares ISA's are generally suited to long term investing i.e 5 years or more, and unless you envision a need to make withdrawals in the short term leaving it in a higher risk fund is Imo a worthwhile strategy.
This isn't a rule and you can often see some very good returns in a very short period of time,
using Natwest as an example and assuming you went with the "Daring fund" if you had invested at the beginning of April this year, by the end of the month you would be up by over 10%
you could then have withdrawn your money and pocketed the profit,
but it could just as easily have dropped 10% or more so you need to be in a position where any money invested is not required for the foreseeable future so that you can ride out any losses and give it time to grow.
I don't agree with not checking your fund,
I was like that with my last fund and let it run for years drip feeding money every month without really taking an interest, then when I finally did decide to take an interest I realised it had been performing quite badly when compared to other funds of a similar risk so decided to transfer it to another provider.
I now check my fund quite often, not because I'm worried it might be losing money but out of curiosity and to keep an eye on performance,
I often log on to find its dropped a few % since the last time I checked, this only becomes an issue if you decide to make a withdrawal so shouldn't normally be a cause for concern.
I don't know much about NatWest funds but I'd say it's worth checking performance from time to time while also comparing it to similar funds, including the platform/management fees just to satisfy yourself it's still competitive,
if not it's easy enough to switch to another provider which is what I did earlier this year,
I actually transferred in march so managed to lose a chunk of money straight away but I've regained that and I'm currently up over 12% from where I started, so bailing out would've been a terrible idea.
Also if you get jumpy over losing £6 then I don't know how you'd cope with a heavily invested pension fund,
my pot varies by £1000's and sometimes 10's of £1000's every day, I've even had this repeat over several days to the point where its dropped by approx £100k in a week, thankfully gaining it all back again soon after.
If you're looking for long term gains then Imo a S&S ISA is still a very good place to put your money
This isn't a rule and you can often see some very good returns in a very short period of time,
using Natwest as an example and assuming you went with the "Daring fund" if you had invested at the beginning of April this year, by the end of the month you would be up by over 10%
you could then have withdrawn your money and pocketed the profit,
but it could just as easily have dropped 10% or more so you need to be in a position where any money invested is not required for the foreseeable future so that you can ride out any losses and give it time to grow.
I don't agree with not checking your fund,
I was like that with my last fund and let it run for years drip feeding money every month without really taking an interest, then when I finally did decide to take an interest I realised it had been performing quite badly when compared to other funds of a similar risk so decided to transfer it to another provider.
I now check my fund quite often, not because I'm worried it might be losing money but out of curiosity and to keep an eye on performance,
I often log on to find its dropped a few % since the last time I checked, this only becomes an issue if you decide to make a withdrawal so shouldn't normally be a cause for concern.
I don't know much about NatWest funds but I'd say it's worth checking performance from time to time while also comparing it to similar funds, including the platform/management fees just to satisfy yourself it's still competitive,
if not it's easy enough to switch to another provider which is what I did earlier this year,
I actually transferred in march so managed to lose a chunk of money straight away but I've regained that and I'm currently up over 12% from where I started, so bailing out would've been a terrible idea.
Also if you get jumpy over losing £6 then I don't know how you'd cope with a heavily invested pension fund,
my pot varies by £1000's and sometimes 10's of £1000's every day, I've even had this repeat over several days to the point where its dropped by approx £100k in a week, thankfully gaining it all back again soon after.
If you're looking for long term gains then Imo a S&S ISA is still a very good place to put your money
I s
t my pants when I saw mine in March when Covid hit, but since then some of the gains have been decent. OP hopefully you were explained to pro's and cons clearly. You are "dripping" a small amount in that hopefully you will not notice. You don't say what age you are but over time you "probably" will have a nice pot.
Especially since mortgage rates should be low.
t my pants when I saw mine in March when Covid hit, but since then some of the gains have been decent. OP hopefully you were explained to pro's and cons clearly. You are "dripping" a small amount in that hopefully you will not notice. You don't say what age you are but over time you "probably" will have a nice pot.Especially since mortgage rates should be low.
Regarding sign-up for this ISA, I did it online and it was rather light touch! Your investments may go up as well as down etc but there wasn't any official advice. I'm only dealing with small amounts so it's a bit of fun really.
UPDATE - logged in this morning and its grown by about £7.50, so I'm up on my initial investment! I didn't realise there would be daily ups/downs. It's kind of interesting to watch.
UPDATE - logged in this morning and its grown by about £7.50, so I'm up on my initial investment! I didn't realise there would be daily ups/downs. It's kind of interesting to watch.
FreeLitres said:
logged in this morning and its grown by about £7.50, so I'm up on my initial investment! I didn't realise there would be daily ups/downs.
You're in for a horrendous time I fear. If you didn't think a S&S investment would fluctuate daily, what was it that you thought you were investing in? Badda said:
FreeLitres said:
logged in this morning and its grown by about £7.50, so I'm up on my initial investment! I didn't realise there would be daily ups/downs.
You're in for a horrendous time I fear. If you didn't think a S&S investment would fluctuate daily, what was it that you thought you were investing in? As these investment are classed as longer term, I kind of thought the value might be updated weekly or monthly. I'm new to it and just interested in how it works.
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