cashing in Tracking Isa?

  rickf 16:24 07 Oct 2008

JUst a thought. I have been paying into a Tracking Isa for a long time. Obviously, I am losing money at the moment, quite a bit actually. If you were me would you cash it in now? As it stands I'm only paying in each month to keep it going as the monthly contribution is just going out of the window.

  natdoor 16:44 07 Oct 2008

FE willtell you that the forum does not permit the offering of financial advice. Hopefully some very general comments will be permitted.

It is impossible to provide an answer without knowing your personal circumstances. However, if you have paid in over a long period you will have seen gains, while now experiencing significant retrenchment.

If you do not need access to the funds now, it might seem unwise to cash in at what might be a low point. The advantage of making regular contributions to a fund (pound cost averaging)is that when values fall you are purchasing units more cheaply. This pays off if and when the fund recovers. Markets will recover but maybe not in the near future and a tracking fund is less exposed to the failure of a few companies (eg banks) than some specialised funds. I do not think it would be foolish to continue to invest if you have adequate cash flow, prepared to take some risk and are able to take a long term view, say five to ten years.

  Fruit Bat /\0/\ 16:55 07 Oct 2008

Took out an ISA just before 9/11. It lost half its value, if I had cashed it in I would have lost money.

I left it alone and eventually it recovered.

My recent investments have all been in "safe" low risk guaranteed minimum payback plans. I thought this was prudent with the way the markets have behaved in the last five years.

Its your choice.

  rickf 16:55 07 Oct 2008

HI natdoor,
I take the general point about not giving financial advice here. Thanks. I also understand that Isa's are for the long term. My intention is to cash it in so that my savings and deposit it in a savings a/c that I at least know is going to earn me money as opposed to losing it everyday and not subject to so much intense fluctuations on a daily basis, and at the moment it seems to go one way, ie south.
I do think that it's a topic that affects lots of people on this site and it would be interesting to hear what others think, not necessarily advice.
Thanks I appreciate your input.

  rickf 16:57 07 Oct 2008

Hi Fruitbat,
It seems I am going your route. Rang up my ISA provider and had a shock to learn how much I have lost recently, just between July and now!!

  oresome 17:29 07 Oct 2008

"deposit it in a savings a/c that I at least know is going to earn me money"

Assuming you're a taxpayer and inflation is 5%, where are you going to deposit it and earn money?

  peter99co 18:37 07 Oct 2008

Inflation at 4%- Interest on ISA 5% -Gain 1%?

  Pamy 18:41 07 Oct 2008

do not cash in , transfer or you loose it

  Pamy 18:59 07 Oct 2008
  Grey Goo 20:16 07 Oct 2008

I think the general rule is don't sell at the bottom of the market, the clever bit is knowing how low the bottom is. However if you cash in now you will never benefit from any recovery.

  rickf 20:59 07 Oct 2008

Thanks for all the interesting thoughts. When I said I was going to cash in I was thinking of moving it to a cash Isa for the time being. Seems to me safer than sorry in the short term. I'll leave this for others who might be interested and those who might want to check up on ideas as to what options are available.

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