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Here’s why I’m investing in a Stocks and Shares ISA instead of cash

first_img Here’s where I’d start. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Image source: Getty Images See all posts by Harvey Jones I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. My preferred way of investing for my retirement is to put money into a Stocks and Shares ISA, but it turns out I’m in a minority. New figures from HMRC show that Britons put four times as much money into Cash ISAs, despite today’s dismal returns.I won’t be doing that. While I keep a stash of rainy-day cash for emergencies, I prefer to invest my long-term wealth in equities, as history suggests a Stocks and Shares ISA should generate far superior returns over time. The stock market may be more volatile in the short run, and prone to crash from time to time, but I think that’s a small price to pay for the long-term benefits.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…In the financial year to 5 April 2020, around 13m Britons used the tax-free ISA umbrella, almost two million more than in the previous tax year. I suspect the trend has accelerated since, as people spent less in lockdown and learned the value of saving for a rainy day.I’m choosing a Stocks and Shares ISAHowever, three quarters chose to put money into Cash ISAs. That means three times as many people left their money to die a slow death in cash rather than attempting to generate a higher return from a Stocks and Shares ISA. With me, it’s the other way around. Three quarters of my savings go into the stock market, typically UK shares.My reasoning is simple. They will grow faster that way. That’s especially true today, when the best easy access Cash ISA pays just 0.46%, while locking my money away for five years would give me just 1.21%. That looks a poor return to me, especially with the FTSE 100 forecast to yield 3.8% this year, according to AJ Bell, with any share price growth on top of that.I’m hoping to generate a long-term annual return between 5% and 7% a year from a Stocks and Shares ISA, with dividends reinvested. This should help protect the value of my money against inflation. Cash won’t do that, especially if price growth picks up as many now expect.I’m not buying the Cash ISANaturally, there are risks to my approach. As we saw in March last year, share prices can plummet in a matter of weeks. Every investor has to accept that today’s stock markets are affectively propped up by low interest rates and quantitative easing. Interest rates may recover one day, and then having large sums in a Cash ISA will make more sense.Yet I’m still investing in a Stocks and Shares ISA and here’s why. Over the last 10 years, the average Cash ISA turned £10,000 into £9,770 in real terms, after inflation, while global stock markets turned it into £20,760 in real terms. Since 1899, Barclays found UK equities have beaten cash 91% of the time.Investing in a Stocks and Shares ISA can sometimes feel like a rollercoaster ride, but the ups more than make up for the downs. Here’s why I’m investing in a Stocks and Shares ISA instead of cash Click here to claim your free copy of this special investing report now! Simply click below to discover how you can take advantage of this. Markets around the world are reeling from the coronavirus pandemic…And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. 5 Stocks For Trying To Build Wealth After 50 Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Harvey Jones | Tuesday, 8th June, 2021 Enter Your Email Address Our 6 ‘Best Buys Now’ Shareslast_img read more

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