The arrival of spring weather can be difficult to predict. Last year, we enjoyed a balmy March and as soon as the hosepipe ban was announced in April, it rained until Christmas. This year was going according to plan with temperatures steadily rising until we were struck by an unexpected Arctic blizzard.
One thing you can count on at this time of year, however, is the flurry of suggestions about how best to invest your annual Isa. Open the money pages of any newspaper; walk into any major mainline commuter station; tune into any local commercial radio station and you will be bombarded by adverts for top performing investments and savings accounts. In the gaps between the newspaper ads, commentators put forward their views about the merits of cash over bonds over shares; the US over Europe over Asia; and this over that or the other.
The reason for all this activity is that a large proportion of retail investment fund sales are made in the final weeks of the tax year in what the industry calls Isa season. Fund managers and distributors are geared-up to attract the many investors who leave their Isa decisions to the last minute.
And some do leave it literally to the last minute: a surprising number of Isa applications are made in the final moments leading up to the midnight deadline on the 5th April. Online applications make this easy, but it was not long ago that people drove through the night to their local application form drop-off centre.
Even for these people, it’s a case of better late than never as the tax benefits of an Isa remain very generous. But to avoid the temptation of being drawn into this blanket coverage, here are two things to remember every time you see an Isa advert:
- The timing of your investment decisions should be mapped out according to your long-term financial plans, not a seasonal industry-led fund sales rush.
- You are better off with an investment strategy that is derived from decades of scientific investment research and careful implementation, not the advertising budget of a particular fund manager or the whim of a press commentator.