Investing your money: isa risks and rewards

March 16th, 2007

With correct portfolio management you can see massive returns, but are you prepared to take the risks?

"Where should I put my money?" - the first question asked by potential investors is the hardest to answer says online IFA, Moneyextra.

"By the time someone tells you where you should be putting your money, you're already too late," says Moneyextra's Senior Editor; Robin Amlôt. "You should never base your fund choices on what is performing well at present because you are, in essence, backing the horse that won the last race. Choosing where to invest your money is a complex process and relies on a number of personal factors including your needs, circumstances and objectives, as well as external factors that you have no control over such as politics and the economy."

Take charge of your investment destiny - take the following points into consideration to pin-point the market sectors most suitable to you:

• Your needs - do you require income or capital growth?
• Your objectives - what do you want and what is most likely to meet these desires?
• Your circumstances - your attitude to risk, the length of time over which you can invest, where your existing portfolio is invested, how much you can afford to lose and your current tax situation.

With just a few weeks to go before the end of the financial year, consumers who have yet to use their ISA allowance and benefit from their tax-efficient status should consider these points when choosing where to put their £7,000. Moneyextra's easy to use stocks & shares ISA tool helps narrow the choice by allowing you to choose one of five different levels of risk:

• Conservative
• Conservative/Balanced
• Balanced
• Speculative
• Very Speculative

You may also opt to review investment performance over one, three or five years. Stock market investing should have a medium-term time horizon so you may wish to start by reviewing performance over five years. Then simply pick the level of risk you're comfortable with, and potential investment options reviewed by our sister company AWD Chase de Vere, are displayed to you.¹

Conservative

There are no stocks and shares ISAs that satisfy a conservative attitude to risk over a five year time horizon - consider a cash ISA instead.

Conservative/Balanced

Topping the list in this category M&G UK - Recovery A Inc - shows a 74.67% return over five years and a discounted initial charge of 2.25% for online applications (4% normally). The fund invests in a range of companies that are going through a difficult period or whose future prospects are not fully recognised by the market.

Balanced

BlackRock ML Managers - Gold & General Inc - returned 191.34% over the past five years and has a discounted initial charge for online applications of 1.25% (5%). The fund aims for long-term capital growth by investing in gold mining and precious metal-related shares.

Speculative

Old Mutual Fund Managers (UT) - UK Select Small Cos Acc - investing in a portfolio of UK smaller companies, put on 205.95% in five years and has a discounted initial charge of 1.5% for online applications (4%).

Very Speculative

Gartmore Fund Managers China Opportunities R Acc - which invests in companies quoted in Hong Kong and Shanghai returned 147.84% over the past five years. The discounted initial charge for online applications is 1.5% (5%).

For further information, please contact:

Robin Amlôt
Senior Editor, Moneyextra
Tel: 0870 191 5626
public.relations@moneyextra.com

 

NOTES TO EDITORS

1 Source: Moneyextra.com 16/03/2007

Moneyextra.com is one of the UK’s longest-established personal finance websites. It has 536,000 unique users and delivers 5.5 million page views every month and has 513,000 registered users.

As at 19th January 2007, Moneyextra.com featured:

• More than 10,000 Mortgages from 126 providers
• 127 Personal Loans from 49 providers
• 208 Credit Cards from 62 providers
• 1,492 Stocks & Shares ISAs from 58 providers
• 170 Cash ISAs from 90 providers
• 121 Current accounts from 36 providers
• 849 Deposit accounts from 145 providers