Equity ISA v Cash ISA
Posted by Jason Chapman in Portfolio management category on 17 Feb 14
With interest rates at an all time low, do you feel there is much of a choice? We thought we’d share with you some interesting statistics from a recent Barclays Study which illustrates the performance of equities against cash over various holding periods.
The first column in the table below shows that over a holding period of two years, equities outperformed cash in 75 of 112 years; thus, the sample-based probability of equity outperformance is 67%. Extending the holding period out to 10 years, this rises to 90%.
|Holding period (years)
|Total number of years
|Probability of Shares Outperformance
Of course, like anything in life, the choice is not as clear cut as the figures above. You also need to consider many factors such as your appetite for investment risk, your existing split of cash and equities in your portfolio and the length of time you wish to hold these investments.
To assist your decision making a little further you may wish to view our Equities v Cash
page which explains the main difference between the two a little further.
If you are interested in Cash ISAs, we would like to point out that when shopping around for the best rate, beware of short term headline rates that attract you to a product. Without careful monitoring you could be left with a Cash ISA with a poor interest rate.
If however, you are interested in a Stock and Shares ISA, don't forget you now have free access to Willis Owen’s Fund Space
research tool, which will help assist you in coming to an informed decision on your choice of funds.
We'd love to know how you intend to use your ISA allowance. Simply click the relevant button below.