Published by Kauders Portfolio Management, Authorised and regulated by the Financial Services Authority
Opinions and statistics are valid at time of publication but may differ later. We leave them on the site so that you can see how useful our point of view has been.
Going to the races and choosing an ISA have much in common: you gamble for the thrill! But as the season of advice to use your ISA allowance comes round, pause to ask yourself some fundamental points.
1. Stock markets are going nowhere slowly. There is no point incurring the risks and costs of an equity ISA so as to lose money.
2. Cash ISA's require you to lock cash up for a fairly trivial tax saving. Interest rates will be going down again as the recession unfolds, so any benefit will diminish further. You may opt for a fixed rate cash ISA, but the fix will only last for a year or two. If you are a higher rate taxpayer you will be better off in an ISA invested in a Gilt; for others, you may do better forgetting an ISA altogether. Just buy a Gilt and pay the income tax. As rates go down your net income will probably exceed the gross income of a cash ISA.
3. The same point applies to a maturing TESSA.
4. If you feel tempted by an ISA invested in a corporate bond fund, read Contrary View No. 3, There are bonds and bonds, and lose the temptation.
Note: you can buy a Gilt economically through any Post Office. For published advice on stock selection, visit www.gilt.co.uk/recommendations.htm
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This advertisement has been approved by Kauders Portfolio Management, who are authorised and regulated by the Financial Services Authority in the conduct of investment business in the UK. Opinions and statistics are valid at time of publication but may differ later. We leave them on the site so that you can see how useful our point of view has been.
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