Halifax stocks and shares ISA - worth doing?

[Ari]

I'm self employed, debt free, earn a reasonable but not huge amount these days and have a modest (five figure) amount in an ISA earning a paltry 1% which is my 'emergency fund'.

I'd really like to start putting some money into something that could be a little more rewarding. Maybe a regular £100/month and let it build, with any money earned going back in to it, and not touching it for twenty years in the hope that it will build into a decent nest egg.

I bank with the Halifax and notice that they offer Stocks & Shares ISAs.

http://www.halifax.co.uk/investments/our-investmen...

There seem to be three 'managed growth funds'.

I know nothing about investing but figure anything is better than nothing (but equally would welcome advice on the most efficient ways to go about it).

Any thoughts on these?

Have also been considering a simple FSTE100 tracker and dribbling money into that.

All thoughts and advice would be much appreciated.

[Ari]

Ozzie Osmond said:

IMO in these days of very low interest rates there's no point "wasting" the excellent tax benefits of an ISA by leaving it simply as a cash ISA savings account.

• Interest received is tiny so income tax relief obtained is even tinier
• The value of the original investment doesn't change so there's no benefit from Capital gains tax relief.
• Due to inflation you are likely to be losing money in a cash ISA these days.

Which leads me to believe it's worth doing a stocks & shares ISA instead, in the hope of accumulating both,

• Tax free income, AND
• Tax free capital gains
• Which hopefully will, over time, give a return well ahead of inflation.

Thank you. Pretty much my thoughts (although as well, not instead), hence the post.

Question is, how and where?

[Ari]

greygoose said:

Have a look at a few websites to see the performance of the funds and what the charges are. If you just want a tracker then the charges should be low. Putting money in every month is the best way to even out the costs and balance out the peaks and troughs of the market.

The Halifax ones all say they are too new to have any performance history.

Tempted to just get a FSTE100 tracker. Not the most exciting I know, but presumably pretty safe and should be reliable.

But again, which one?

Completely new to this.

[Ari]

nyt said:

It's not a great time to be investing at the moment IMHO, as the Greece situation is making things very volatile.

That thought had crossed my mind too.

Just so frustrating earning the square root of feck all and knowing that you're going backwards in real terms.

Hence the thought to draw a line under what I have, keep that safe (if unproductive) in a savings ISA and try and find another route to growth.

[Ari]

gregf40 said:

Be greedy when others are fearful.

Don't disagree with that, but the fear (if there is any) doesn't seem to have translated into downward pressure on share prices yet.

It feels to me that there is a lot of sheeplike behaviour about these things. Whilst everyone else is holding on, no one wants to stick their neck out and bail. Once a few do though, the rest follow for fear of being the one left standing when the music stops.

Not that I profess to know much about it really, hence asking for advice.

[Ari]

Is 10% the sort of rate you can reasonably expect from one of these!?

[Ari]

Ozzie Osmond said:

For instance, have a look at Artemis Income Fund.

http://www.artemis.co.uk/investor/products/artemis...

By the way, 10% is IMO just sexy talk based on short term performance. But with a bit of luck you should see 7% or so p.a. over the longer term. As they say, past performance is no guarantee of future returns. But unless you are very unlucky it should easily whip the building society.

I'd be overjoyed with 7% right now.