Finally, I have done it. (S&S ISA)

[vickster]

I’m not looking at mine! It’s been plummeting for a while now
I do have some money to invest but I’ll play it safe for now, and stick to savings accounts

 

[SkipdiverJohn]

I will be buying today, but will hold some cash back to buy more in case he who must not be named keeps heading west and takes out the whole country, in which case I can buy again at a lower price, or use the money to stock up on boiled water and an Anderson shelter.

Putin isn't aiming for a full takeover of Ukraine. What he wants control over are the parts of the country with a large pro-Russian population that can be considered friendly. He won't want the rest, and won't expend any military effort on grabbing it.
All the noise about sanctions is empty Western bluster and virtue signalling. Putin knows it and the West knows it. They havent got the balls to really take him on.
The stock market will soon settle back down to normal, like the Russian offensive never happened.

 

[iluvmybike]

I’m not looking at mine! It’s been plummeting for a while now
I do have some money to invest but I’ll play it safe for now, and stick to savings accounts

Inflation at the rate it currently is at will eat away at your cash savings in chunks. There are plenty of cheap stocks kicking around now for a savvy fund investor to work on - and build a decent portfolio with. You really do have to ride the bumps - and there have been plenty of them over the years but in long term S&S ISAs are way ahead

 

[vickster]

Inflation at the rate it currently is at will eat away at your cash savings in chunks. There are plenty of cheap stocks kicking around now for a savvy fund investor to work on - and build a decent portfolio with. You really do have to ride the bumps - and there have been plenty of them over the years but in long term S&S ISAs are way ahead

i have zero knowledge about such things.
I still work full time so my savings will grow not shrink even with higher bills

 

[SkipdiverJohn]

i have zero knowledge about such things.
I still work full time so my savings will grow not shrink even with higher bills

In real terms, the total buying power of your savings will shrink if you are depositing cash at a sub-RPI interest rate. Your account balance might be growing, but what you can get with each pound is declining.

 

[vickster]

In real terms, the total buying power of your savings will shrink if you are depositing cash at a sub-RPI interest rate. Your account balance might be growing, but what you can get with each pound is declining.

Ah well. I’m in a much better situation than many

 

[SpokeyDokey]

Crash, bang, wallop!

Well, last week, and especially yesterday, took the fun out of Stocks & Shares ISA's.

Beans on toast or Pot Noodles for tea tonight; whichever is the cheapest.

 

[DCLane]

@SpokeyDokey - I agree. It seems I chose a 'bad' time to invest

 

[SpokeyDokey]

@SpokeyDokey - I agree. It seems I chose a 'bad' time to invest

They'll be fine long term.

 

[vickster]

They'll be fine long term.

Or it won’t actually matter very much if what is happening in Ukraine escalates

 

[cosmicbike]

I went from +% to minus almost overnight, but view it as a long term 5 - 10 year investment, so put a bit extra in while they are low. Only time will tell if that was a good idea....

 

[SkipdiverJohn]

Crash, bang, wallop!

Well, last week, and especially yesterday, took the fun out of Stocks & Shares ISA's.

On the contrary, volatility is where you can really make gains. In a flat market wth little price volatility, your existing ISA pot will more or less only grow at the rate of the dividend yield, assuming you reinvest the income of course.
In a volatile market driven by geopolitical events, you might get price swings of 5% over very short timeframes. The price of some individual shares within the market can easily move by 10% or more in response to events. Markets tend to overreact to events and then drift back to pre-event levels relatively quickly. Any new money added or income cash reinvested, whilst the market is getting hammered, is going to quickly turn a profit once things rebound, without even considering the dividend element.
Let's say you put £5k into a share that's been hammered down 10% that normally carries a 5% annual dividend yield. The shares were previously priced £10 each and paid a 50p dividend, now they're £9 . Your dealing cost is say £7 plus the 0.5% stamp duty. £5k gets you 552 shares, and an expected annual dividend income of £276.
If the share merely recovers it's original £10 price within a year and pays the expected dividend, your £5k is now worth £5796 - an annual return of 16% on your investment!

 

[SpokeyDokey]

On the contrary, volatility is where you can really make gains. In a flat market wth little price volatility, your existing ISA pot will more or less only grow at the rate of the dividend yield, assuming you reinvest the income of course.
In a volatile market driven by geopolitical events, you might get price swings of 5% over very short timeframes. The price of some individual shares within the market can easily move by 10% or more in response to events. Markets tend to overreact to events and then drift back to pre-event levels relatively quickly. Any new money added or income cash reinvested, whilst the market is getting hammered, is going to quickly turn a profit once things rebound, without even considering the dividend element.
Let's say you put £5k into a share that's been hammered down 10% that normally carries a 5% annual dividend yield. The shares were previously priced £10 each and paid a 50p dividend, now they're £9 . Your dealing cost is say £7 plus the 0.5% stamp duty. £5k gets you 552 shares, and an expected annual dividend income of £276.
If the share merely recovers it's original £10 price within a year and pays the expected dividend, your £5k is now worth £5796 - an annual return of 16% on your investment!e

I understand what you are saying and it is a good explanation.

Whilst our 'on paper loss' is of little consequence in the context of our overall personal financial situation, it was more fun watching that part of our assets subject to stock market exposure rising in value as opposed to diminishing!

Fairly new to this sort of thing (S&S Isa's) and at our stage of life it is not really going to impact us greatly.

However, I get where you are coming from and there may well be some fun to be had.

One of the problems as a non-professional investor is reaction times to current market shifts ie our money may well be in the wrong place to take advantage of any fluctuations.

If you have any suggestions they would be welcome.

Our initial thought would be to load up the univested portion (which is currently a whole £10!!!) of our A J Bell Isa a/c so that we can at least strike when ready.

Our donor fund could be our poorly performing PB's which we are coming to regard as a slow reacting Government *iss take.

As an aside, our domestic finance director (Mrs SD) informed me a few days back that her quarterly check on our Aviva UK property pension fund indicates that the quarterly rise has negated around 90% of the 'loss' we have recently sustained.

So, not all bad news. 🙂

 

[SkipdiverJohn]

The thing to bear in mind with ISA's is you have an annual limit, so the total available is nominally the £20k allowance plus whatever dividend income the ISA pot generates.
There is also a third possible source of cash; that being to liquidate part of your existing shareholding in the case of stocks that have recently made big gains, then hold the proceeeds as cash ready for the next market dip. I did this with the bulk of my Royal Mail shares, which I had bought relatively low and sold after they had gone up a lot as a result of increased online shopping during lockdown. At the time I sold, the dividend yield was under 3% so I figured I was better off cashing out then using the money to buy something else with either a higher div yield or more potential for share price appreciation - or ideally both!

 

[iluvmybike]

You need to actively monitor your funds and be prepared to switch them around if one is underperforming - and best to get a good spread of investments. A lot depends on the fund manager your provider has. You need a prvider who is prepared to change fund managers when they don't perform. It can also take a few years before you see a pattern of growth. Don't put everything in just UK stocks - you need european and US stock as well as some in emerging markets. It gets a bit nervy when world events come along which clatter the market - I've been through various recessions, banking scandals, dotcom bubbles bursting, black Fridays, and now the Covid pandemic and what's happening in Ukraine. You just have to sit tight and ride these things out.
Currently all profits are re-invested in my plan - that way the amount of stock you have increases so when markets pick up you are holding a bigger share. I may well get to a point where I need to take profit as income but not yet...