Unless you are investing > a million in a wide portfolio then ETFs are pretty much the only way to go if you weigh everything up. The markets are too efficient for any relative layman to have an edge and that probably includes financial advisors as a general rule, and ISAs are just a bit worse than everything else, particularly cash ISA.
I dont think that you can say that. Cash ISAs can surely only be the worst option at a very low rate.
I have dealt with what I consider to be a professional, reputable company. The article below seems to make them negligent in their failure to make any profit on either of my accounts during the last 5 years.
This Cash ISA pays 5.9%! So why did I just buy a FTSE All-Share tracker instead?
Maybe I am thick, but could anyone explain this logic. First he says this.
The last 18 months have been brilliant for cash as interest rates soar, but not so good for the FTSE All-Share. So naturally, I’ve just bought a FTSE All-Share tracker.
NatWest and RBS currently offer a best buy two-year, fixed-rate Cash ISA paying 5.9% a year. If I had a lump sum that I needed for a set purchase in a couple of years, say, to upgrade my car or buy a property, this is probably where I’d put it. However, I’m saving with a much longer term view, and here cash doesn’t cut it.
Then this.
Having recently transferred three legacy pension schemes into a self-invested personal pension (SIPP), I had more money at my disposal than usual. I wanted to give myself ultimate diversification, across the entire FTSE All-Share. My Vanguard fund currently yields 3.33% a year with a rock bottom ongoing charges figure of just 0.06%.
The interest from the NatWest Cash ISA beats that, plus it has no annual charge at all. However, in contrast to the stock market, it offers no capital growth at all.
Over the last 12 months, my Vanguard tracker has grown a modest 3.6%. Throw in the yield and the total return is 6.93%. So in a poor year for shares, it still returned more than NatWest’s 5.9%.
I could have chosen a 7 fixed rate, but chose the 5 year fixed because of my age. Had I chosen to do the 7 year fixed, I would have generated a profit of £89,450.
The change in value of my SIPP and ISA accounts since March 2010 is £97,811.
Therefore a little less, over just over half the term, and no charges. I will need more convincing over how bad cash ISAs are.
I think the stagnation of my SIPP and ISA accounts over the last 5 years, illustrates how good the performance was in the first 8 years. However that is one of the downsides of stocks and shares.
Not sure your Financial Advisor fired you, probably more like he felt he couldn't add value to your situation if you didn't take on board any of his advice. There is also the question of whether you were financially viable as a client, Financial Advisor's like any other business are there to make a profit after all.
And he is 100% correct about the differential between Cash ISA deposit rates, and the real rate of inflation which has been running in double figures for much of the last few years. All very well making 40% over 7 years, when in real terms inflation has actually eroded the purchasing power of your money even with interest added.
Saving/Investing money is about having a diversified approach that falls in line with your investment horizon and attitude to risk. No one invests in the FTSE100 any more, they usually look at overseas investments as well as UK. US tech has done very well this year, but so has energy stocks over the last few years that have given dividends comparable with cash ISA's and capital growth as well. The key with wealth creation is let compounding be your friend. And you need a medium term time horizon to start to feel the benefit of that.
I could have chosen a 7 year fixed rate, but chose the 5 year fixed because of my age. Had I chosen to do the 7 year fixed, I would have generated a profit of £89,450.
The change in value of my SIPP and ISA accounts since March 2010 is £97,811.
Therefore a little less, over just over half the term, and no charges. I will need more convincing over how bad cash ISAs are.
I think the stagnation of my SIPP and ISA accounts over the last 5 years, illustrates how good the performance was in the first 8 years. However that is one of the downsides of stocks and shares.
I checked tonight and the change in value in my SIPP, and ISA accounts is down to £93,887. That means a loss of almost 4k this week.
I also have another account that I and my employers contribute to. This has been running since 2010. The value of this is just over 3k less than my contributions,
I think that there is a real problem. Financial advisers are always quoting using hindsight. So when justifying investments in stocks and shares they are always able to quote from the bits that have done the best. So just taking a simple example, if the Footsie 100 has done brilliantly, they will quote from that, and if the Footsie 250 has had a disaster, they wont mention it. This will be despite the fact that the firm they represent may have had you invested in the Footsie 250. They will always quote the best bits, and ignore the worst.
Comments
Cash ISAs can surely only be the worst option at a very low rate.
First he says this.
The last 18 months have been brilliant for cash as interest rates soar, but not so good for the FTSE All-Share. So naturally, I’ve just bought a FTSE All-Share tracker.
NatWest and RBS currently offer a best buy two-year, fixed-rate Cash ISA paying 5.9% a year. If I had a lump sum that I needed for a set purchase in a couple of years, say, to upgrade my car or buy a property, this is probably where I’d put it. However, I’m saving with a much longer term view, and here cash doesn’t cut it.
Then this.
Having recently transferred three legacy pension schemes into a self-invested personal pension (SIPP), I had more money at my disposal than usual. I wanted to give myself ultimate diversification, across the entire FTSE All-Share. My Vanguard fund currently yields 3.33% a year with a rock bottom ongoing charges figure of just 0.06%.
The interest from the NatWest Cash ISA beats that, plus it has no annual charge at all. However, in contrast to the stock market, it offers no capital growth at all.
Over the last 12 months, my Vanguard tracker has grown a modest 3.6%. Throw in the yield and the total return is 6.93%. So in a poor year for shares, it still returned more than NatWest’s 5.9%.
Had I chosen to do the 7 year fixed, I would have generated a profit of £89,450.
The change in value of my SIPP and ISA accounts since March 2010 is £97,811.
Therefore a little less, over just over half the term, and no charges.
I will need more convincing over how bad cash ISAs are.
I think the stagnation of my SIPP and ISA accounts over the last 5 years, illustrates how good the performance was in the first 8 years.
However that is one of the downsides of stocks and shares.
https://www.msn.com/en-gb/money/other/santander-uk-increases-interest-rate-on-easy-access-account-to-seven-per-cent/ar-AA1fisOC?ocid=msedgntp&cvid=0553dc431ecf446f80200d7b5b2cea92&ei=16
Had I chosen to do the 7 year fixed, I would have generated a profit of £89,450.
The change in value of my SIPP and ISA accounts since March 2010 is £97,811.
Therefore a little less, over just over half the term, and no charges.
I will need more convincing over how bad cash ISAs are.
I think the stagnation of my SIPP and ISA accounts over the last 5 years, illustrates how good the performance was in the first 8 years.
However that is one of the downsides of stocks and shares.
I checked tonight and the change in value in my SIPP, and ISA accounts is down to £93,887.
That means a loss of almost 4k this week.
I also have another account that I and my employers contribute to.
This has been running since 2010.
The value of this is just over 3k less than my contributions,
I think that there is a real problem.
Financial advisers are always quoting using hindsight.
So when justifying investments in stocks and shares they are always able to quote from the bits that have done the best.
So just taking a simple example, if the Footsie 100 has done brilliantly, they will quote from that, and if the Footsie 250 has had a disaster, they wont mention it.
This will be despite the fact that the firm they represent may have had you invested in the Footsie 250.
They will always quote the best bits, and ignore the worst.
@ACEGOONER @HAYSIE
"let compounding be your friend."
Warren Buffet's favourite saying & the key to his astonishing success.
https://www.msn.com/en-gb/money/other/have-fixed-rate-savings-accounts-now-peaked-and-should-you-act-fast-to-get-a-top-deal/ar-AA1fzp7g?ocid=msedgntp&cvid=429b37baa58e41cda2800f88a9dd1f94&ei=9
https://www.msn.com/en-gb/money/other/we-re-financial-experts-and-here-is-where-we-d-invest-now-shares-vs-cash-gold-and-property/ar-AA1fCHHT?ocid=msedgntp&cvid=a51926a2088147cb94390604bfe3ca14&ei=27
https://www.msn.com/en-gb/money/other/bank-boosts-interest-to-highest-paying-5-78-on-fixed-rate-cash-isa/ar-AA1fV6oO?ocid=msedgntp&cvid=9a80f7e286714cd59c72725a2ca8d73c&ei=62
https://www.msn.com/en-gb/money/other/today-s-best-isas-easy-access-and-fixed-savings-accounts-paying-interest-up-to-6-2/ar-AA1g1MtX?ocid=msedgntp&cvid=4ab797e542b34d97b3a8b083d8c47160&ei=39
https://www.msn.com/en-gb/money/other/absolute-disaster-how-uk-s-most-popular-isa-fund-went-from-27bn-hero-to-zero/ar-AA1gaq3w?ocid=msedgntp&cvid=f8b181df4e1444e0b79a1797caf24022&ei=25
https://www.msn.com/en-gb/money/other/why-the-abrdn-share-price-plummeted-29-in-august/ar-AA1gceiT?ocid=msedgntp&cvid=732a25c168d24d34817af84a48520753&ei=93
https://www.msn.com/en-gb/money/other/martin-lewis-highlights-outstanding-best-buy-fixed-savings-account-paying-6-2-it-s-totally-safe/ar-AA1go3Eu?ocid=msedgntp&cvid=a68825f33dc148ffaeb458e2ed77470a&ei=8
https://www.msn.com/en-gb/money/other/pensioners-who-live-to-100-will-need-692-000-in-pension-wealth-have-you-checked-how-much-you-ll-need/ar-AA1gdQFN?ocid=msedgntp&cvid=e3839b318f4948c1812c6e4373464aeb&ei=83
https://uk.yahoo.com/finance/news/savers-lose-26m-scammers-amid-111453415.html
https://www.msn.com/en-gb/money/other/martin-lewis-explains-how-to-get-free-175-before-christmas-but-you-need-to-act-quick/ar-AA1gEbSB?ocid=msedgntp&cvid=b424df4362f14f9d99f12429b883672b&ei=51
https://www.msn.com/en-gb/money/other/best-time-to-lock-in-a-savings-rate-in-15-years-here-are-the-best-deals/ar-AA1h2T6r?ocid=msedgntp&cvid=d4927b83829c457faff38589d65b63c3&ei=19
https://www.msn.com/en-gb/money/other/what-are-the-best-savings-account-offers-as-nationwide-launches-8-with-200-bonus/ar-AA1h3nhs?ocid=msedgntp&cvid=21c7ecf437c54ee5ac8150db7a474418&ei=12