Is it time to cash in my ISA shares?

[Thatch]

Watching Newsnight on Thursday really scarred me.

I have some money in ISA shares, and i can see them halving in value if it all goes double dipping!

If i cash them in and just put them in the bank (offset against my mortgage) is the only downside that i have lost 3 years of allowances, and would only be able to invest back in 3 yearly instalments in the future when hopefully the markets settle down a bit?

[otherman]

Thatch said:

Watching Newsnight on Thursday really scarred me.

I have some money in ISA shares, and i can see them halving in value if it all goes double dipping!

If i cash them in and just put them in the bank (offset against my mortgage) is the only downside that i have lost 3 years of allowances, and would only be able to invest back in 3 yearly instalments in the future when hopefully the markets settle down a bit?

I think its a bad time to be in equity because of so much uncertainty and so much bad news potential. Plus the market level today is not bad by recent history so I say it would be a sensible time to switch to cash. I wouldn't use it to pay your mortgage though, switch to a cash isa so you can go back into equity later and keep your tax shelter. There'll be another mini crash soon and an opportuntity should show itself. Or else wait a couple of years to see if we get some stability, although you may miss out on the big gains if you do this. Depends what your aims are really.

[northandy]

Thatch said:

Watching Newsnight on Thursday really scarred me.

I have some money in ISA shares, and i can see them halving in value if it all goes double dipping!

If i cash them in and just put them in the bank (offset against my mortgage) is the only downside that i have lost 3 years of allowances, and would only be able to invest back in 3 yearly instalments in the future when hopefully the markets settle down a bit?

Can you not switch it to a cash isa?. Rates of around 3% although not brilliant would mean you could swap back later.

[onedsla]

You cannot swap a stocks & shares ISA directly into a cash one. Only the other way around.

http://www.hmrc.gov.uk/isa/transfer-isa.htm
"Subscriptions to a stocks and shares ISA can only be transferred to another stocks and shares ISA. However, subscriptions to a cash ISA can be transferred to another cash ISA, or to a stocks and shares ISA."

Most ISAs I've looked at tend to have a clause about (not) holding cash in them long term - which in any case would be sat there earning little if any interest.

If you believe the market is likely to fall, you could replace equities in your ISA with stocks likely to rally in a falling market (gilts, short ETFs etc), or at least add weighting to them if your portfolio is already balanced.

[jeff m2]

Two choices, switch to bond type investment, ot sit it out.
Here is a graph showing what happened through 09.
This is an Asian fund


the red line shows the money put in, the other is the value. As you can see if the poor sod had sold at the low point when his wife was all in a tither he would have turned 20k into 10K.
But he stuck it out and now he has turned 8K into 16.3K.

This is not some graph generated for maketting purposes, it is real

[mark387mw]

I've got ISA's but as I'm now in New Zealand, non UK resident - I'm not eligible to invest anymore into it when the unit cost is low.
The statement in April 11 (28,000GBP) showed a recovery from previous years however all that seems to be lost (21,000GBP) in my current Oct 11 statement.
Having had this hit in value, I guess its a bad time to cash it in. Crystal ball time, will it recover and be worth something in say 5 years?
I have another 10,000GBP in a regular bank account not earning and thinking of topping up my premium bonds but that seems to get bad press. I'm looking for around 5+ year investment, likely to be my return to UK from NZ (if thats wise but another topic??!). Being in NZ, I'm a bit out of touch with the UK finance/savings market, only to believe its not good!

Apologies to the OP for joining this thread with my questions, but any advice welcome. (Withdraw all funds and use as a deposit for buy to let property? but managing long distance etc etc.)

[RESSE]

Thatch said:

Watching Newsnight on Thursday really scarred me.

I have some money in ISA shares, and i can see them halving in value if it all goes double dipping!

If i cash them in and just put them in the bank (offset against my mortgage) is the only downside that i have lost 3 years of allowances, and would only be able to invest back in 3 yearly instalments in the future when hopefully the markets settle down a bit?

Does your ISA have a fund switching facility?

If so, a switch into a Cash Deposit based fund would give you some peace of mind.

Be aware that it was never intended that ISAs should contain large sums of cash and money in Cash Fund accounts should be regarded as a temporary home while you are considering in which equity or property linked funds you wish to invest.

In extremis HMRC could direct your ISA provider to return your money to you, thereby losing the tax advantages of the ISA wrapper.

Edited by RESSE on Monday 14th November 10:02

[chris7676]

I would not really watch that much newsnights.
To answer the question - not necessarily, depends on what shares you have (if you know it at all). Btw, you can't switch into the cash ISA, although you can do the other way around (from cash ISA to shars ISA). Go figure.

[RESSE]

You may find this information helpful (or not!):

Period covered 19th March 2007 to 23rd September 2011

Hang Seng Index
19/03/07 19,266
23/09/11 17,669
Percentage change DOWN 8.29%
1 year ended 23/09/11 down 19.86%

US Dow Jones Index
19/03/07 12,226
23/09/11 10,771
Percentage change DOWN 11.90%
1 year ended 23/09/11 up 3.42%

UK FTSE 100 Index
19/03/07 6,189
23/09/11 5,067
Percentage change DOWN 18.13%
1 year ended 23/09/11 down 8.65%

UK FTSE All Share Index
19/03/07 3,221
23/09/11 2,627
Percentage change DOWN 18.43%
1 year ended 23/09/11 down 8.23%

German DAX Index
19/03/07 6,623
23/09/11 5,197
Percentage change DOWN 21.53%
1 year ended 23/09/11 down 15.97%

Australia All Ords Index
19/03/07 5,839
23/09/11 3,978
Percentage change DOWN 31.88%
1 year ended 23/09/11 down 15.00%

French CAC Index
19/03/07 5,459
23/09/11 2,810
Percentage change DOWN 48.52%
1 year ended 23/09/11 down 24.7%

Japan Nikkei Dow 225 Index
19/03/07 17,010
23/09/11 8,560
Percentage change DOWN 49.68%
1 year ended 23/09/11 down 10.52%

[jeff m2]

mark387mw said:

I've got ISA's but as I'm now in New Zealand, non UK resident - I'm not eligible to invest anymore into it when the unit cost is low.
The statement in April 11 (28,000GBP) showed a recovery from previous years however all that seems to be lost (21,000GBP) in my current Oct 11 statement.
Having had this hit in value, I guess its a bad time to cash it in. Crystal ball time, will it recover and be worth something in say 5 years?
I have another 10,000GBP in a regular bank account not earning and thinking of topping up my premium bonds but that seems to get bad press. I'm looking for around 5+ year investment, likely to be my return to UK from NZ (if thats wise but another topic??!). Being in NZ, I'm a bit out of touch with the UK finance/savings market, only to believe its not good!

Apologies to the OP for joining this thread with my questions, but any advice welcome. (Withdraw all funds and use as a deposit for buy to let property? but managing long distance etc etc.)

Mark you are looking at your 1st and 3rd quarter statements, the former and later being being more or less the 2011 high and low resp. It should be a bit higher at present. (not a lot though)
Selling by "panic" or "worry" usually doesn't end well.
If you look at the graph of the TRP Asian fund above your post you will see I missed the boat on selling at high, my 20K investment went from 25K to just over 10K I did not sell.
Most people don't have an objective when they invest.
So once you decide what that is you can decide where you should be.
So if you fall into the "not even close" catagory like most of us, you need some equity and you need to stick with it.
As you get closer you can start to move some equity into either safer equity, maybe real estate funds or move into bond type investments, corp debt and developing country bonds look more attractive than developed country stuff paying nada. (Look at the average maturity of the fund when choosing)
With regard to cash on hand that is really a personal thing, I live in the States so I need a much larger cash cusion than most. As they say "everyone is only three months from living in a cardboard box"

With respect being in NZ is not an excuse (meant in a good way)

[mark387mw]

jeff m2 said:

With respect being in NZ is not an excuse (meant in a good way)

I know - it's really 'out of sight - out of mind'.

Best bet I take it, is to leave it where it is if I don't need it.

now over to the premium bond thread

[LeoSayer]

Ask yourself this question....if you had the cash in the bank, would you invest in shares now? If not, then sell.

Just remember you can't make any money with cash in the bank. If you're out of a volatile market then you'll miss the bad days and the good. How will you decide when to re-enter the market? When indexes are up 10%...20% from now?

It's a tough decision, but you've got to take some risk to have a chance of good returns.