UKC

I currently have savings in stocks and shares ISAs as long term investments. However for some time now they have been at best "flat lining". Without wishing to sound pessimistic or morbid I do wonder whether, as one gets older, long term investments cease to be of any benefit and that a short term option might be more realistic.
Over to the UKC IFAs!

In reply to mypyrex: I have a considerable amount of my savings in blue chip shares which Istarted buying about 15 years ago. I don't reinvest the dividends, I take them as income. Some shares have done well, some not so well. But I get a dividend of at least 3.5% from most of them which comes in very handy now that we are retired. So yes, for me shares are for the long term.

In reply to mypyrex:

My shares are up 20% or so over the past year. There are good and bad unit trusts available for saving within an ISA - as a general guide, any product sold by a High Street bank is worthless.

Take a look at the performance of the Woodford fund https://woodfordfunds.com/our-funds/weif/fund-facts/ and also the Fundsmith https://www.fundsmith.co.uk/fund-factsheet .

In reply to icnoble:

Have you re-invested any of your dividends to maintain your relative capital (i.e. if you took all the dividend over time, due to inflation, your capital investment is worth less)?

In reply to galpinos:

Rather depends on whether or not the underlying shares have gone up in value, does it not? Also, many companies attempt to pay a dividend which rises continuously over the years.

In reply to mypyrex:

Are long term investments really for you? You seem to get very concerned at every short term effect with your index linked ISA. 6 months of flatlining is very short term.

If the idea of loosing a significant fraction of your money concerns you then you shouldn't put a significant fraction into anywhere you can loose it under anything less than national financial meltdown.

If you make the mental step that you reserve a fraction of your money for risky investment (linked ISAs are much riskier if you may need the money at short notice as then you can't ride out a low), then plan your future finances with the assumption that the money is lost - or devalued in a worst case estimate, you'll stress a lot less.

In reply to mypyrex:

I watch the market. At present I feel that Cash ISAs are a waste fo time given the poor return, so I have switched them all into Stocks and Shares ISAs.

My understanding is that if/when interest rates improve you can switch them back again into Cash ISAs without infringing your annual ISA allowance.

In reply to mypyrex:

One useful way of thinking about investments is to think about your house. If your house value falls below purchase price, you sit on (in) the investment until it comes back up. Why treat investments any differently? When investing, the worst thing you can do is sell when the investment goes down, as you are locking in your loss.

In reply to mypyrex:

All my stocks are in energy and mining at the moment, some are earmarked for long term investment, quite a few, small operators and especially emerging African mining investments are a lot more volitile but short term returns can be spectacular.

In reply to mypyrex:

Do you have any premium bonds?

In reply to All: Thanks for all responses. Just that some times you think "How long is long term?"

Phoning my IFA later.

In reply to mypyrex:

I think you need to shop around. My wife took out a stocks and shares ISA and invested £2000 through the boom years. She took the money out just before the crash after about 8 years and pocketed £2000.

My pension portfolio, managed by a local IFA has, like someone else suggested, seen growth of about 20% this year which is pretty good. Like all things though - shares go down as well as up.

In reply to galpinos:

You are correct in what you are saying but the growth in share value + dividends has beaten inflation. We have no children to leave money to, sometimes I think we might as well spent on more holidays, but we have been in apposition to save all our lives and there will be enough cash to fund at least nursing home fees for at least one of us if necessary.

In reply to ByEek:

Doubling in 8 years is only equivalent to 7% compound interest - not stellar performance for that period in time. 20% growth this year sounds good, but that's starting from a low base point. Still, it's better than a kick in the knackers.

In reply to Toerag:

I think you misread my post. She put in £2000. 8 years later, she withdrew £2000. That is 0% gain.

In reply to ByEek:

I misread it as well then. Sounded like £2000 profit.

In reply to ByEek:

Actually, over 8 years, that seems quite a big loss.

In reply to mypyrex:

Managed funds can be con, some are barely managed at all. With practically no trading done by the staff, they simply sit on it. Ask for a break down of exactly what it is composed of and what they bought / sold this year. If they are carrying out practically no action and can't justify it, move elsewhere.
So will of course state how actively managed they are and the fees might reflect this.

In reply to Rob Exile Ward:


Indeed. But the point is that it was one of these crappy over the counter hight street bank ISAs that is no doubt invested in the back pocket of someone like Fred Goodwin.