Is £ 800 enough to start an ISA?

Last week he saw the dawn of another fiscal year and with him, for many investors, a new ISA allocation.

A lot of attention is paid to the maximum annual contribution of £ 20,000 that many people can do to an ISA. But, of course, not everyone has a replacement of £ 20k ​​out there, or anything close.

The good news is that this is just a maximum. It is possible to start investing in an ISA with much less.

Keep in mind that tax treatment depends on the individual circumstances of each client and may be subject to changes in the future. The content in this article is provided only for information purposes. It is not intended to be, it does not constitute any form of fiscal advice. Readers are responsible for carrying out their own due diligence and obtaining professional advice before making investment decisions.

Put £ 800 to work

I think £ 800 is enough to get going.

For example, an important but simple risk management for investors in the stock market is diversification. That basically means not putting all your eggs in a basket.

Another consideration is whether rates and costs will eat a disproportionately high percentage of an ISA. I think that £ 800 is sufficient so that this is not the case, although to try to avoid this risk that an investor compares different actions and actions of Isa to see what best suits their needs.

Establish an objective

Different people have different objectives when they invest.

For some, obtaining passive income in the form of dividends is the name of the game. For others, buying shares that seem undervalued and maintaining them in the long term with the hope of a serious profit of the price of the shares is what they want. Some investors point to both dividends and the growth of the price of shares at the same time.

Even with £ 800, I think it makes sense to clarify the objectives and then make investment decisions based on that.

Find actions to buy

Having a goal is one thing: how about giving life?

The recent turbulence of the stock market has yielded some potentially excellent purchase opportunities for an ISA in my opinion.

But it can be a disconcerting moment for any investor, much less a new one. Attached from an area that one understands makes sense. Instead of simply comparing the price of an action now with what it was before, I think the focus is the same that always uses an intelligent investor: seek actions that have a price well below what the commercial perspective suggests that they should be worth in the long term.

An action to consider

As an example, a part that I believe that investors should consider for an ISA at this time is Scottish mortgage trust (LSE: SMT).

This is an investment trust, which means that it has bets in a variety of different companies. Therefore, it can offer a certain level of diversification even to an investor with only a few hundred pounds. You can also buy participations in private companies that generally do not sell shares from small private investors. For example, Scottish Mortgage has a participation in Rocket Company Spacex.

Scottish mortgage actions have moved a lot in recent months due to the great exhibition of the trust to technological actions such as Nvidia and ASML. Since the technological sector still wobbles from tariff uncertainty and the enthusiasm of investors cooling, I see the risk that it further damages the net value of the assets of the Scottish mortgage, and the price of their shares.

However, I see investing as a long -term activity. Scottish Mortgage has a proven capacity to find technological winners from the beginning.