Should I reinvest with Investec?

Investec Fund: should I reinvest in a fund that previously demonstrated a high success rate for me personally or are there a couple of things I should consider first?

Investec Investing

In the previous post I discussed my favourite and most successful fund investment, the Investec Kickout scheme. Please read my previous article for more information.

The investment will mature on 14th September, assuming the stockmarket doesn't have a major crash (over 10%) in the meantime. I will make a healthy 10.5% profit for my one year investment, on which I will pay no tax due to its ISA status.

The Big Question

Following the success of that investment I have one big question on my mind right now: should I reinvest in the same fund. If I were to reinvest and the product was a success I could realise upwards of 13% or more return on my investment - not to be sniffed at.

If I reinvested I would gain the benefits of a compounding effects as I would be gaining interest on a much larger investment due to the 10.5% added capital.

Considerations When Reinvesting

There are a number of issues to consider in this decision:

1. If I reinvested I would be growing a tax free investment without having to take anything away from my ISA allowance, since the pot of money is already in ISA form.
2. The success of the product assumes that the stockmarket will be bigger than the starting index (probably around 5700-5800 by the time the product commences) when the product matures. This could be any time within the next five years.
3. Existing concerns such as those in the Eurozone make the investment quite risky. If any other country was to default in the Eurozone or there was any other serious details to emerge we could see a sudden fall in the economy and in the Stockmarket.
4. The OECD has just predicted that the UK will see a shrinking of growth in  the economy by 0.7% this year. This does not bode well for the future of the stockmarket, as performance in the stockmarket tends to be linked to actual economic data.
5. The FTSE100 is at quite a high level at the moment. Today it closed at 5794.8 near the highest levels seen this year (5807.57). Investment now would probably mean buying at the top or else an expectation of significant growth in the stockmarket since the crash in 2007/8. This seems to be a lot to ask.

Conclusions

As I've waffled on I've come to realise that to reinvest at the moment would probably be  a major mistiming of the market. Whilst I know that I recently wrote an article in which I stated that share price and timing shouldn't matter, I believe that with an index it should be a concern. Clearly the stockmarket is performing abnormally well at the moment. To reduce my risk of the product not maturing I should at least wait until the stockmarket has had another dip. This could possible happen if there were any major world concerns, e.g Presidential Election (Nov), Potential Oil Crisis (War in Middle East), or further Eurozone Crisis. Clearly I am not happy to invest right now.

Readers, what should I do with the capital in the meantime? What would be your recommendations?

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