Opening an ISA Stocks and Shares today and purchasing FTSE 100 shares may not produce a quick return for investors. The index faces a period of great uncertainty – as evidenced by its recent stock market crash.
However, in the long term, a recovery from its current low level seems very likely. With an ISA on stocks and stocks offering tax efficiency, simplicity and low costs, the time may have come to start taking advantage of the low valuations and the rebound potential of the FTSE 100.
ISA actions and actions
An ISA on stocks and shares is a highly accessible account that can be opened online in minutes. In terms of operation, it differs little from a standard stock trading account. Normally, the same range of stocks is available and the platform used is often the same as that of a stock trading account. However, an ISA on stocks and shares offers tax efficiency that could increase your returns in the long run.
For example, no capital gain, dividend or income tax is levied on amounts invested via an ISA. Since you are allowed to receive dividends of only £ 2,000 outside an ISA each year before tax is levied, investing in an ISA in the long term could improve your financial prospects – especially if you are counting on FTSE 100 dividends to finance your retirement.
In addition, ISAs offer the possibility of withdrawing funds at any time. You can invest up to £ 20,000 a year in an ISA, while administration costs are often less than £ 1 per month. As such, they are likely to be affordable for almost all investors.
FTSE 100 opportunities
Investing in FTSE 100 stocks via an ISA may not seem like a tip at the moment. The index continues to experience a very difficult period which could realistically last for several more months. Consequently, investing today carries the risk of short-term paper losses.
However, long-term investors could generate high returns from FTSE 100 stocks. Many members of the index are currently trading on exceptionally low valuations. In some cases, they are deserved. But investors’ negative sentiment towards the stock market means that a number of high-quality companies also trade on low valuations.
The history of the FTSE 100 suggests that it is very likely to recover from its current lows. As in previous bear markets, this result may not seem plausible when the coronavirus unfortunately continues to cause major human cost. However, the FTSE 100 has always hit new records after its past bear markets, and investors who buy stocks during the darkest days of a stock market crash may be among those who profit the most in the long run.
As such, the time may have come to buy a range of FTSE 100 stocks in an ISA. They could improve your financial future.
The Post Don’t lose the stock market crash! I would like to open an ISA and buy FTSE 100 shares today which appeared first on The Motley Fool UK.
Peter stephens has no position in any of the actions mentioned. The Motley Fool UK does not hold any positions in any of the stocks mentioned. The opinions expressed on the companies mentioned in this article are those of the author and may therefore differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. At The Motley Fool, we believe that taking into account a diverse range of information us better investors.“data-reactid =” 43 “>Peter Stephens has no position on any of the actions mentioned. The Motley Fool UK does not hold any positions in any of the stocks mentioned. The opinions expressed on the companies mentioned in this article are those of the author and may therefore differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. At The Motley Fool, we believe that taking into account a diverse range of ideas makes us better investors.
Motley Fool UK 2020