Your Money - Your Future
Investing in Stocks & SharesBack to News & Views
The entire Individual Savings Account (ISA) allowance of £20,000 for the tax year 2018/19 can be invested in cash, stocks and shares, or a combination of the two. Investors can choose from a vast array of investment options ranging across global equity and bond markets.
If you are an ISA investor who knows what they want, Self-Select ISAs offer a flexible approach, allowing you to choose your own shares or collective investment funds. Choosing your own shares, however, can be risky and, unless it forms part of a wider share portfolio, this approach might concentrate your investment upon the fortunes of just a few companies.
Many investors therefore choose to put their ISA allowance into something more diversified, such as a collective investment fund, which reduces risk by accessing a selection of shares within a single investment wrapper. There are many funds available – some prioritise income, while others focus on capital growth. Over the long term, funds with relatively high equity content have tended to offer better returns than equivalent investments in cash, bonds or commercial property. However, the value of equities can fall as well as rise and they can be volatile.
Ultimately, your ISA choices should not only reflect your goals, but also sit comfortably within your wider portfolio. If you want to ensure you have covered all the options available, you should seek professional advice. Please remember past performance is not a reliable indicator of future results.