Over the past five years, we have been building a shares portfolio to generate £10,000 of annual income. It hasn’t been easy, but except during a blip in 2018, investors have been rewarded with a decent mix of capital growth and income.
With interest rates slowly back on the rise, we round-up the best savings accounts and Isa accounts on offer in 2019.
The word “uncomplicated” features on an Isa provider’s current online advert. As a beginner investor, this has plenty of appeal. Having attended two beginner events, I felt ready to pick my first “uncomplicated” stocks and shares Isa – but was I?
Why is it that I can’t find a broker or institution that will accept me as a client so that I can open a funds Isa? I have US residency and file my US taxes along with my UK taxes.
Daphne Fernandes, by email
In a new video series focused on investment funds, deputy editor Kyle Caldwell considers what investors should look for in a fund that they are pondering including in their Isa or Sipp.
He talks to multi-manager Rob Burdett of BMO Global Asset Management about desirable fund manager qualities, how much weight you should give to past performance, and succession planning after the departure of a star.
Watch their conversation here.
I’m in my 30s and started investing – by which I mean I opened a stocks and shares Isa – a few months ago. What took you so long, experienced investors might wonder. It’s simple – I lacked knowledge about the investment options out there, and I had little understanding of the concept of risk. Also, I will admit to fulfilling a stubborn stereotype: I thought investing was only for people who already had shedloads of money.
Most investors are familiar with the idea that diversification can help reduce the risk attached to their portfolio and smooth total returns over the longer term. It’s a simple principle: not having all your eggs in one basket means the risks of out-and-out failure – though also the chance of stratospheric success – are diluted. Moreover, even if holdings in a portfolio all do equally well over time, it’s likely that their fortunes will ebb and flow, so you should get a smoother ride.
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The individual savings account turned 20 years old this year. First introduced in 1999 by the then chancellor Gordon Brown to replace the share-focused Pep (personal equity plan) and cash Tessa (tax-exempt special savings account), the Isa has proved an invaluable tax wrapper for UK investors and savers.
Women are still woefully under-represented among the ranks of stockmarket investors. That might be because they lack funds to invest, or confidence, or both. Either way, they are much less likely to invest than men are.
The latest Isa sales figures have confirmed the gender gap once again: in the 2016/17 tax year 17% of women invested through a stocks and shares Isa. That figure was up from 14% in the previous year (which is encouraging) but well below the 24% figure for men. The vast majority of women chose to keep their money in cash Isas.
Savings rates on easy access accounts have finally been creeping up, with the top rate now 1.5%. But often this rate is only available to new customers.
Banks and building societies used to pass rate rises on to all savers in variable rate accounts, but now most of them only offer a higher rate to new customers. Loyal savers continue to earn the lower rate, which in the worst cases can be as low as 0.25%.