Martin Lewis has given advice to an ITV This Morning viewer concerned after seeing an investment ISA plunge in value as the Iran war wages. Appearing on the show hosted by Cat Deeley and Ben Shephard, the personal finance expert was asked what the person should do, and whether it is time to move the investment.
The Iran war has caused massive volatility in the financial markets as concerns rise over the delivery of oil and gas as Iran closes the Straight of Hormuz where most of the cargo from the region flows. Host Ben Shephard said: “This one’s from Helen she’s asking about her investment ISA she has £13,000 in an ISA bonus saver at 2.28 per cent in Halifax and just over £16,000 in an investment ISA with HSBC. The investment ISA has gone down over £200 in the last three weeks.
Firstly Mr Lewis was critical of the choice of cash ISA, saying she could get much better rates elsewhere. He said: “Let’s start with the first bit. You’ve got your money in a 2.6 per cent cash ISA – you could move it – transfer that to Moneybox and be getting 4.26 per cent. So the first thing I’d do is get rid of your pants cash ISA and move it to a better cash ISA.”
Not making decisions based on temporary fluctuations is important Mr Lewis explained, because that is how investments work – long term. He said: ““As for whether you should get rid of stocks and shares. Look, in general if you’re in a broad portfolio of investments over a 5 year period for money you’re not locking away then investing will outperform saving.
“But of course the whole point of investing is it goes up and down and up and down and up and down. And if you track it all the time constantly then you will never invest as all you’ll do is go ‘oh it’s going down it’s going down’. You have to look at it over a long period.
“You can’t look at it in isolation by weeks. The volatility will drive you nuts. So if it’s a good investment and I’m not a regulated investment advisor so I can’t advise on the specific investment. But if it’s an investment in, let’s say, a UK or US tracker fund in a broad spread of investments and you’re doing it for the long run in the hope that it out performs savings then the fact it’s gone down in the short term isn’t relevant unless you need to take your money out urgently.
“You should be looking at it over a 5, 10 year period and hopefully, there are no guarantees, you put your money in investing in the hopes it will grow a lot quicker than saving, but the risk is it may not or it may shrink, but in the hopes it will go well.
“But if you’re going to play it on short term volatility you have to really know what you’re talking about and even then many people who know what they’re talking about get it wrong.”