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With March upon us, it is now only a matter of weeks until the annual ISA deadline.
Some people see that as a concern. But in some ways I think it is an opportunity. After all, the deadline is for contributing money to an ISA. That money does not need to be invested immediately (or even any time soon).
Plus, the deadline marks the passing of one year’s allowance. But as one door closes, another one immediately opens!
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
Why the deadline can be helpful
Rather than seeing the contribution deadline as a nagging date in the diary, I see it as a useful point at which to pause and consider how my Stocks and Shares ISA is performing.
How much I put in from one year to the next may change depending on my circumstances at any given moment. But what does not change is my objective: reviewing my ISA to learn from both my mistakes and successes.
I can tweak my investment strategy accordingly.
Weeding out the underperformers
For example, one share I own in my ISA that has been little short of disastrous so far is boohoo (LSE: BOO).
When I bought it, it was already down considerably from former highs. Still, it had proven its business model, was sitting on some cash, and had recently been very profitable.
How times change.
So, what should I do?
On one hand, loss-making boohoo seems to lurch from one disappointment to another. The company keeps writing to me with its view on why letting key shareholder Mike Ashley get too involved might not be a brilliant idea. But whereas Ashley has created a lot of long-term value for shareholders at Frasers Group, the boohoo board has presided over a collapse in the share price.
On the other hand, if such a seasoned retail tycoon sees possible value – and has put his money where his mouth is – maybe there really is hope for boohoo.
It has a large customer base, extensive infrastructure, and owns some well-known brands.
For now, I plan to hold tight. But taking time to review my ISA holdings sporadically strikes me as a valuable exercise.
Sometimes, it can be time to say goodbye to a poorly performing shareholding where the prospects look dim. For now, boohoo still makes the cut – but at some point I may decide it is a lost cause.
On the hunt for bargains
Meanwhile, I continue to search for great shares I can buy at attractive prices.
For example, this year I have topped up my shareholding in JD Sports (LSE: JD).
With a tumbling share price, weak consumer sentiment threatening sales and multiple profit warnings over the past year, I hope I am not throwing good money after bad.
But I still reckon the sportswear retailer has the makings of a stock market star. It has a proven, profitable model. It has been expanding aggressively and has a global footprint.
An ISA is a long-term investment vehicle – and over the long term, I remain bullish about JD Sports’ prospects.
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