Why There's No Rush To Buy

NOW THAT we are in the era of individual savings accounts (ISAs), we have much more freedom of choice when it comes to equity- linked investments. No longer do the rules restrict us to just the UK and European stock markets if we want to use our full allowance and take maximum advantage of the tax benefits as they did with personal equity plans.

Instead, we can put our money anywhere we want and in virtually any sort of fund, apart from venture capital trusts, and shelter the investment from capital gains and income tax.

If we choose to invest with a fund management group, then for the next five years it can also reclaim half the advanced corporation tax that companies pay on the dividends they distribute.

"But don't feel that you have to rush out and buy an ISA," says Stephen Lansdown, of Hargreaves Lansdown. "Many groups have yet to announce their plans, so it may be worthwhile waiting until you see what they have to offer."

Use the time to sort out your investment priorities. "Attitude to risk is the most important factor when it comes to making investment decisions, and this applies just as much with ISAs," advises Jo North of Pretty Financial. "A good independent financial adviser (IFA) can help you with this."

If you decide to use an IFA, he or she will look at your overall portfolio. If you don't want to use one, then there are several points to bear in mind.

"If you have been investing in PEPs in the past, then make sure that your ISA choice is complementary," says Roddy Kohn of Kohn Cougar. "What you want is a balanced portfolio, not overexposure to any particular markets. Always bear in mind that ISAs, just like PEPs, are intended for long-term investment."

"Also try to take out your ISA with a group that has a wide range of funds," says Jo North. "Over time, you may want to switch your investments as your priorities change and this will give you a greater degree of choice."

So where should you start. If you are new to equity investments, then Roddy Kohn suggests you could take a look at Norwich Union's CATmarked UK Growth fund or HSBC's FTSE All Share tracker fund as "the UK is likely to be one of the best growth areas this year. Some commentators are already forecasting that the stock market could rise to 7,200 in a year."

Stephen Lansdown also advises first-time investors to stick with UK or European funds for the time being. He points out "just because there is a wider choice with ISAs, you should not forget first principles. These are that your first investments should be at home where the risks are lower. Four years down the road, when your portfolio has grown, then you should consider investing elsewhere in the world".

If you are a very cautious investor or in need of income, then all the experts agree on the merits of the M&G corporate bond funds. Managed by Theodora Zemek, both the conventional and the high-yield funds have produced good performance records. Other than M&G, "Aberdeen Fixed Interest, Jupiter Income and Perpetual High Income should always be considered", says Stephen Lansdown.

"More adventurous investors should consider growth funds from groups such as Jupiter, Invesco, M&G, Fidelity, Schroder, Henderson, Gartmore and Save & Prosper" says Jo North. "I the best PEP managers are likely to be the best ISA managers."

News
Alan Bennett criticised the lack of fairness in British society encapsulated by the private school system
peopleBut he does like Stewart Lee
Sport
David Moyes and Louis van Gaal
football
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
News
i100
PROMOTED VIDEO
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
Arts and Entertainment
Worldwide ticket sales for The Lion King musical surpassed $6.2bn ($3.8bn) this summer
tvMusical is biggest grossing show or film in history
Voices
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
food + drink
News
Rob Merrick's Lobby Journalists were playing Ed Balls' Labour Party MPs. The match is an annual event which takes place ahead of the opening of the party conference
newsRob Merrick insistes 'Ed will be hurting much more than me'
News
A cabin crew member photographed the devastation after one flight
news
Life and Style
Carol O'Brien, whose son Rob suffered many years of depression
healthOne mother's story of how London charity Maytree helped her son with his depression
Life and Style
The Google Doodle celebrating the start of the first day of autumn, 2014.
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits