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Why is my Stocks and Shares ISA losing Money?

No matter what type of Investment Account you are using, the actual Stocks, Funds or Bonds that you have purchased using that account can go up or down in value.

It’s important to understand the difference between an investment account and assets you have invested in using that account. When you begin investing it is most common to use a General Investment Account (GIA) or a Stocks and Shares ISA (Individual Savings Account). Once you have opened an account with an investment company, then you can begin buying assets using that account. Typically people buy Stocks, Funds or Bonds, but other types are also available.

Anything you purchase into an ISA account in the UK has huge Tax benefits (i.e. you don’t have to pay any!… here you can learn more about what a Stocks and Shares ISA is) but you should never assume that the value if those assets will always go up.

Have a look at British Airways (IAG) shares over the last 5 years, you can see that they have gone down in value by almost 70%!

This is obviously because of the impact of Covid on the Airline industry, but if you bought £100 of their shares 5 years ago in your Stocks and Share ISA you would only be left with about £30 now. You would not see any of the Tax benefits an ISA gives you, because only the profits are Tax free.

Investments of any type can go up or down in value, and that is why they are never considered risk free.


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