Real-world events can make investment markets volatile, which can affect the value of your stocks and shares investment.
But the worst thing you can do is panic and lose sight of your long-term goals. Drops in value are rarely permanent.
We explain what fluctuations in the stock market mean and what to do if you feel like you’re losing money.
Why has the value of my ISA gone down?
When you invest in a stocks and shares product, like our Stocks and Shares ISA, Junior ISA, Lifetime ISA and some of our Child Trust Funds, you’re putting your money into a fund that invests in the stock market on your behalf.
The value of your investment depends on how well the assets the fund invests in perform. Put simply, when they do well, the value of your investment goes up, when they don’t do well, it goes down.
Recently, many factors have changed the way companies work and the business models they rely on. Rapid changes in politics, both in the UK and overseas, have impacted the economy, while AI and other technology has driven stock market growth in some areas.
As a result, we’ve seen what we call “turbulence” or "high volatility" in the stock market. Some volatility is normal, but sometimes the value of investments goes up and down by more than we’d normally see.
Just like turbulence in a plane, this can be unsettling.
But no matter what's happening in the markets, there’s one golden rule to follow: Stay focused on your long-term goals.
Is my ISA losing money?
Even when you see a lower number when you check your balance, try not to think of dips in the market as “losing” money. You only “lose” money if you withdraw from your ISA at a time when your ISA is worth less than you’ve paid in.
Until you sell your investments, ie make a withdrawal, you still have the same number of shares and their value will keep changing – it might go down further but it also might come up.
It’s therefore worth stepping back and remembering what you planned to use the money in your stocks and shares ISA for.
If you planned to use it for a future event or for a rainy day that hasn’t yet arrived, then you’re still on track. It's not until you withdraw money that the value of your shares affects you.
And, as we often say, past performance is not a reliable indicator of future results.
We tell you this to make you aware that even if a stocks and shares product has made money in the past, it might not do so in the future. But it works the other way. If a product has lost money in the past, the future could be very different.
Should I cash in my stocks and shares ISA?
It can be tempting to cut your losses and withdraw your money when you see the value of your investment go down.
But no-one can accurately predict what’s going to happen, so withdrawing now could mean you end up selling your investment when its value is at its lowest.
Some people even consider investing more when stocks are low, taking advantage of buying shares at a lower price on the assumption that the value will go back up. Of course this isn't guaranteed and investing always carries some risk.
The only way to guarantee your stocks and shares ISA won't go up or down any more is to withdraw your money, but this also stops your ISA from recovering if the cause of the dip changes.
How can I find out more?
If your ISA is with OneFamily, you can log into your account to see how the fund you're invested in is performing. You can also send us a secure message through your online account.
It can also be reassuring to view past performance of the fund, you can find this in the investor information.
- If you're struggling, please don’t hesitate to get in touch to see how we can help you. Or visit our help and support pages to find out more.
Open a OneFamily Stocks and Shares ISA
Simply choose one of our three climate-focused funds to start investing in our Stocks and Shares ISA.
As the name suggests, our Stocks and Shares ISA invests in stocks and shares. The value is therefore likely to go up and down over time.
This is normal for this type on investment, but it means there is a risk you could get back less than you put in if you withdraw at a time when the value is lower.
