Index tracker ISAs - opinions please

Permabanned
Joined
18 Oct 2002
Posts
47,396
Location
Essex
I am considering investing in an index tracker ISA. I'm aware of the conventional wisdom that they are almost guaranteed to out-perform a savings account. For example, from a recent thread;

Pug said:
Tax Free ISA.

Cash ISA is the easiest, most guaranteed return, but will make the least.

Bonds are "safe as houses" but dont offer a great earning.

All share trackers (through an ISA) (track the market, not companies) are ALMOST guaranteed to turn a decent profit - but the investement needs to be 3-5 years.

This is how the FTSE all-share index has performed since 2000:-

chartor1.png


So in seven years it has basically gone nowhere. Unless you'd invested at the right time, eg. early 2003, you have probably got a worse return than in a savings account. If you'd invested in early 2000, three years later you'd have lost 50% of your money (on paper).

What do people here think of index trackers - to me they seem quite high risk.
 
Well, I've got a little bit of money to invest and to be honest with you I've put it into all three avenues you've mentioned.

Bonds are just security so I can't spend it, plus I might win millions.
The Cash ISAs growing now... but not that great a return.

I'm about to start a tracker ISA.....
 
Which company are you getting a tracker with? I was looking at the M&G one.

I guess the million dollar question is what is going to happen to the economy in the coming years, which will be reflected in stock prices. To me the outlook seems uncertain. We have had a long sustained period of economic growth in recent years (although even during that period, the FTSE all-share still experienced sharp falls) and it isn't going to continue forever.

Decisions decisions...
 
Back
Top Bottom