Is Now A Good Time To Take Out A Stocks And Shares Isa?

By Author: Lecia Selbo
Total Articles: 49
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A stocks and shares ISA is an investment in the stock market that is not liable to capital gains tax. As of the 6th of April 2010, the maximum amount of money that you can have invested in these schemes is set to rise from 3,200GBP to 5,100GBP.

Currently, investor confidence in the stock market is low as a result of the credit crunch. However the stock market is still far and away the best place to invest your money for the longer term, as it offers greater returns than any other type of investment.

The uncertainty that abounds in the markets at the moment has caused many investors to hold back from buying shares, for fear that they will fall further in value, or that the companies that issued them will go bust.

As a result of the credit crunch, and the accompanying low share prices, it is currently a lot easier to build up an impressive portfolio of shares with relatively little capital, as long as you do not demand immediate profits.

When shares are cheap, they have a greater profit potential than when they are expensive. The chances of the stock market making a strong recovery over the next few ...
... years would seem to be good. This means that if you buy shares now when they are cheap, you can expect at least some of them to be worth a lot more when the market recovers.

With stock market trading, there are no guarantees. The market could fall further still, although all the indications are there that the world economy is entering a slow period of recovery. Even if prices fell through the floor tomorrow, you could still expect the combined value of a share portfolio to rise from its current position in the longer term.

Trying to time stock market investments for maximum profit is a job best left to day traders, who keep a constant eye on stock movements. Most private investors put their money into pooled funds such as unit trusts and corporate bond funds, which spread the risk throughout a portfolio of shares.

Stocks and shares ISAs commonly take the form of a part investment in a larger portfolio of stocks and shares, operated by the manager of the fund. This spreads the risk to the investor across several different investments, meaning that they are less likely to lose their money than they would be if they had invested in individual shares. Lecia Selbo opened a stocks and shares ISA with Legal