Wealth Management


Adrian Howard
May 14, 2024

Financial security is a major goal for many women, and the poor interest rates on savings accounts mean now is the ideal time to consider investing. A Stocks & Shares ISA is a good first step, offering flexibility and the potential for good returns over the long term. We can help you decide on the best way to invest your Stocks & Shares ISA.

Your career is going well, your salary is rising and, quite possibly, thanks to all that money you’ve saved working from home, you’ve finally got a bit of extra cash at the end of the month.

But what to do with it? Financial security is a goal for many women – both for themselves and for their families – so it makes sense to put any extra cash you have away for your future.

The pensions gap is a very real threat, particularly for mothers, and the bigger your financial buffer, the more options and choices you’ll have when you get older.

It may be that you’ve been considering investing for a while, or you might just be fed up with the poor interest rates available on savings accounts. Either way, now could be the perfect time to dip your toe in the water.

Slow and steady wins the race

You’re more than likely investing already with your pension. A Stocks & Shares ISA, however, provides a more flexible and active introduction to investing.

You can get your hands on your money whenever you need it, and if you do leave it for the long haul, there is the potential for it to provide a pot of cash that will give you more options when you do eventually wind down from work.

It’s also worth pointing out that you don’t have to buy shares to put in your Stocks & Shares ISA – you can invest in a collective fund with a manager who manages a portfolio of shares on your behalf.

Of course, even with the help of talented fund managers, risk will always be an inevitable part of investing.

We’ve all come across pub bores who brag about the money they’ve made on their latest investment punt, but the stock-market investing we’re talking about isn’t about stock-picking, wagers or long shots.

It’s a slower, steadier and more considered route to wealth, where very basic investment principals – maths, if you like – do the hard work, not necessarily research or stock selection.

Volatility is inevitable, but time is on your side

You may experience volatility over the short term, but if you have at least five (ideally ten) years, there is more potential for you to end up much better off than you would have been if you had left your money in a savings account.

Investing a lump sum – a work bonus or inheritance, perhaps – can be high risk. If markets fall shortly after you invest, you could be disheartened by a quick and sharp loss.

However, saving little and often – say, £150 a month – reduces that risk and enables you to take advantage of something called pound-cost averaging.

By picking up units on a monthly basis, you end up paying an ‘average’ overall price for your investment: you buy some units when prices are high and some when they are low, providing a smoother return than you would get from buying a job lot in one go.

When you invest this way, falling markets don’t have to be bad news – it just means the following month you’ll buy up more units for your money, leaving you better placed to benefit when markets hopefully bounce back.

You might not be bowled over by your returns in your first year but, over time, you’ll gradually start to witness the real magic of investment returns – compounding – where you start earning money on your returns, not just the money you pay into your account.

When it comes to investing, it’s sometimes easy to get bogged down by the risk, the jargon and the pressure to pick the best stock or the highest-performing fund.

But it’s not a right or wrong, black or white decision: it’s about doing ‘something’ rather than nothing. It doesn’t matter whether your investment is the best performer or not – it’s more about taking your first step on a journey and starting to see your money work harder for you.

Over time, as you learn and gain confidence, you can change your investments and start paying in more, perhaps with more specific goals in mind.

Of course, there is a degree of research and effort involved in choosing a Stocks & Shares ISA and deciding what to hold in it. But this is where we can help and take some of the decision making off your to-do list.

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

An investment in equities does not provide the security of capital associated with a deposit account with a bank or building society.

The favourable tax treatment of ISAs may be subject to changes in legislation in the future.