Utilising your ISA allowance - currently at £20,000 - is an extremely tax efficient way to manage investments. As well as using your ISA allowance to top up existing or to buy new investment holdings, it’s crucial that investors continue to monitor their portfolio on a regular basis.
Experts recommend revisiting your choices once a year. But ideally you should be checking more frequently, as the stock market constantly changes. Plus, if your circumstances change then an extra review might be in order.
Firstly, you need to establish that your fund selection is still appropriate for your personal circumstances and goals and that your portfolio is in the best shape it can be.
Many existing investors will have accumulated a collection of fund holdings over the years that might no longer suit their needs or changing risk appetite.
Daniel Pereira, investment research analyst at Square Mile, said: “Many things can shift in the world of fund management, including a fund’s risk profile and changes within management.
It's important to periodically review your fund selection to ensure it still matches your appetite for risk
“It's important to periodically review your fund selection to ensure it still matches your appetite for risk.
“In addition, fund managers do move jobs and if a fund was chosen because of the credentials of a particular manager or team, you should ensure your money remains in safe hands. If your favourite fund managers leaves, it’s not necessarily a reason to panic, but it's certainly worth taking it into consideration.”
You can also use a review to check you’re happy with the levels of diversification of your investments.
Having an incorrectly balanced portfolio could result in losses in the case of a market shock in an area in which an investor might be overexposed.
It is not just the investor’s circumstances and the goings-on within asset management firms that must be considered. Things change in the economy and political world too which impacts on global stock markets.
With the Brexit deadline less than 60 days away, investors will be wondering what they should be doing - or already have done - to prepare for what may lie ahead.
Despite numerous swings in sentiment since the referendum, it’s clear to say that investors have been unsettled.
The latest figures from the Investment Association show that many investors have shied away from backing UK stocks.
However, it’s important to maintain a long-term view.
It’s also worth reminding those who deliberately pulled their money out of the UK, not to confuse the UK stock market with the domestic economy. The London Stock Exchange is very international and around 75% of the earnings of FTSE 100 companies is made outside of the UK, primarily in US. Dollars.
Since the Brexit vote was passed, there has been much debate about what kind of exit we’re going to make. But it’s not just Brexit that threatens to unsettle the markets. There are plenty of other concerns in the wider economy.
Whatever happens, investors should remember that the fundamental rules of investing apply - diversify and maintain a long-term view, so that whichever way Brexit goes, or anything else, your ISA portfolio can handle it.
Market downturns are an inevitability, and part of the market cycle. But good investment selections will help protect you over the long term. Any downturn in the stock market can also be viewed as a buying opportunity.
Patrick Connolly of Chase de Vere, said: “Nobody knows how Brexit will play out, although that is just about the same with everything else in life. Historically, times of uncertainty have often proven to be good times to invest, when prices are depressed and people are sitting on the sidelines.”
Individual Savings Accounts (ISAs) are one of the most tax efficient ways to save. But with interest rates on cash savings low, more people are looking for higher returns.
If you are ready to plan for the long-term, a Selftrade Stocks and Shares ISA is a great place to start.
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Selftrade does not provide investment advice. This article is the authors view and is not the view or opinion of Selftrade and Selftrade accepts no liability for any loss caused as a result of the use of this information. The opinions expressed are those of the author at the time of writing and should not be interpreted as investment advice.
The value of investments can fall as well as rise and any income from them is not guaranteed and you may get back less than you invested. Past performance is not a guide to future performance. We do not provide advice or make recommendations about investments. If you have any doubts about the suitability of an investment, you should seek advice from a suitably qualified professional adviser.