Hesitant over a Stocks and Shares ISA? Here’s a way to deal with scary markets keeps showing up in conversations for a reason. The story below covers what is actually happening, where the trade-offs sit, and what a careful reader should take from it.
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The new Stocks and Shares ISA season is off to a disappointingly hesitant start, reports the Financial Times. I’m not really surprised considering the shocks that stock markets have been suffering.
The FTSE 100 has climbed close to 11,000 points, slumped back below 9,700, and it’s back around 10,600 at the time of writing.
Try telling new investors the stock market is all about slow and steady appreciation of wealth — and not quick gains and losses? I’d expect a dirty look, quickly followed by a view of their back.
Take things easy
We shouldn’t worry at all if we suffer short-term losses? Coming from an experienced investor, that could easily sound a big smug. I remember when I started out. And seeing early falls was scary. In fact, even after all these years, it still is a bit.
When one of my stocks drops in price, it makes me question my decision — and I worry if I’ve hit one of my bad ones. So what should I really say to Stocks and Shares ISA beginners at times like this?
Everyone should approach investing in a way they feel comfortable. And if that means holding off when prices are up and down daily, that’s just fine. Early losses could put a newcomer off for life.
Get the cash in
But we don’t need to shun an ISA completely. We can still transfer cash over to our ISA account, with no requirement to buy shares by any deadline — or any time at all. We can take as long as we like, even years if we need it, before we decide what to actually go for.
Keeping away from an ISA can lose us the opportunity to build up some cash now, while we wait for our confidence in the stock market to settle. And every pound we can stash away today can help build up to a tidy sum by the time we retire.
When we’re ready to buy some shares, we can hopefully benefit from fallen prices. I’m drawn to house builders, like Barratt Redrow (LSE: BTRW), right now.
Barratt is down 31% so far in 2026 — and 67% over five years. It’s been hit by just about everything that’s going economically wrong with the world. High inflation leading to rising costs of construction materials? Check. Demand hit by high interest rates? Check. Hopes for rate falls evaporating? That too.
Shares going cheap
But years of share price falls have pushed Barratt’s valuation way down. We’re looking at a forecast price-to-earnings (P/E) ratio of around 10. And that would fall as low as seven by 2028, if forecasts are accurate. Now, forecasts can be wrong. But a trend like that could value Barratt at less than half the current FTSE 100 average.
Oh, and there’s a forward dividend yield of 6.6% on the cards.
The short-term outlook doesn’t appear great, I have to be honest. And we might see more falls. But as part of a diversified selection of UK shares, I really do think long-term Stocks and Shares ISA investors could to well to consider Barratt. When they feel comfortable enough to take the plunge, that is.
