I'm assuming this is is possible - am I right?
d712
Posts: 235 Forumite
Hello
I have a stocks and shares ISA. If at some stage in the future I anticipated that the market was going to fall, I'm assuming I could sell all the investments and then hold them as cash and later on use that cash to invest again.
For example, if I had £25000 worth of investments, I could sell them, hold the £25000 in cash and then use it to invest again at a time of my choosing.
I wouldn't be restricted by the ISA allowance as I wasn't depositing new money.
If I were to re-invest in the same funds I would then have a greater holding in each if the price of all of them was lower at the time of re-investing.
Is that correct?
Thanks
I have a stocks and shares ISA. If at some stage in the future I anticipated that the market was going to fall, I'm assuming I could sell all the investments and then hold them as cash and later on use that cash to invest again.
For example, if I had £25000 worth of investments, I could sell them, hold the £25000 in cash and then use it to invest again at a time of my choosing.
I wouldn't be restricted by the ISA allowance as I wasn't depositing new money.
If I were to re-invest in the same funds I would then have a greater holding in each if the price of all of them was lower at the time of re-investing.
Is that correct?
Thanks
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Comments
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Correct. Just remember to take into account dealing charges.
Make sure you carefully think this through before doing it, what if the funds dont become cheaper until 5 years down the line? You would have missed out on loads of income and thus returns."If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes” Warren Buffett
Save £12k in 2021 - #027 £15,268 (76%)0 -
Thanks for the response.
This is just a hypothetical question.
I doubt I would be able to anticipate anything like that and if my investments go down it just convinces me not to sell.0 -
Here is a good visual display of the risks of 'selling everything' in hope of buying in at lower prices.
https://qz.com/487013/this-game-will-show-you-just-how-foolish-it-is-to-sell-stocks-right-now/"If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes” Warren Buffett
Save £12k in 2021 - #027 £15,268 (76%)0 -
Yes, you can sell your investments heeping the cash in an ISA and buy later without affecting your ISA allowance. This would give you a bigger or smaller holding than you started off with.
There are several snags:
What if your anticipated fall doesnt happen?
How will you know when it's safe to reinvest?
Wen you decide it is safe is it possible that the prices are higher than when you sold?
While you are holding cash your returns would be nearly zero. If you had kept faith with the investments
asuming they were sensibly diversified they would almost certainly recover having earned you dividends/interest in the meantime.
The general view here is that on average the snags outweigh the possible gains.0 -
george4064 wrote: »Here is a good visual display of the risks of 'selling everything' in hope of buying in at lower prices.
https://qz.com/487013/this-game-will-show-you-just-how-foolish-it-is-to-sell-stocks-right-now/
Thanks, I like that game!
I actually beat the market the third time round (by a massive $177) but I was just selling and buying at randomly chosen points.
I'm glad they used the S&P 500 index. I recently invested in a S&P 500 tracker after reading that Warren Buffett would put 90% of his money into one.0 -
That's not very diversified and I'm not convinced that he actually said that anyway (in that unqualified form)....I recently invested in a S&P 500 tracker after reading that Warren Buffett would put 90% of his money into one.
Edit: his quote (in http://www.berkshirehathaway.com/letters/2013ltr.pdf) was more about a trust for his wife rather than what he personally does with his money while he's alive, so is potentially reflective of his views on her financial management skills rather than a generic recommendation for those in completely different circumstances:My money, I should add, is where my mouth is: What I advise here is essentially identical to certain instructions I’ve laid out in my will. One bequest provides that cash will be delivered to a trustee for my wife’s benefit. (I have to use cash for individual bequests, because all of my Berkshire shares will be fully distributed to certain philanthropic organizations over the ten years following the closing of my estate.) My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions or individuals – who employ high-fee managers.0 -
That's not very diversified and I'm not convinced that he actually said that anyway (in that unqualified form)....
Edit: his quote (in http://www.berkshirehathaway.com/letters/2013ltr.pdf) was more about a trust for his wife rather than what he personally does with his money while he's alive, so is potentially reflective of his views on her financial management skills rather than a generic recommendation for those in completely different circumstances:
You’re missing my point.
I was only able to marginally beat the market and that was by blind luck at the third time of asking.
The market example was the S&P 500 index, which is one of my investments.
The conclusion therefore is that it’s a very risky game trying to choose a time to sell and then buy, re-affirming the advice given in the other responses.0 -
Are our life savings safer in Sterling cash, or in a tracker divided between thousands of the world's biggest companies each possibly more solvent than the UK Government?“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0
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No, I agree with your main point (and that of others) that trying to time the market is a mug's game!You’re missing my point.
I was only able to marginally beat the market and that was by blind luck at the third time of asking.
The market example was the S&P 500 index, which is one of my investments.
The conclusion therefore is that it’s a very risky game trying to choose a time to sell and then buy, re-affirming the advice given in the other responses.
I was just picking up specifically on your reference to investing in the S&P 500 on the basis of what WB said - I was under the impression from the question in your OP that you're not an experienced investor, so assumed that the S&P was your sole investment, but apologies if that's not the case....0 -
No, I agree with your main point (and that of others) that trying to time the market is a mug's game!
I was just picking up specifically on your reference to investing in the S&P 500 on the basis of what WB said - I was under the impression from the question in your OP that you're not an experienced investor, so assumed that the S&P was your sole investment, but apologies if that's not the case....
No worries.
It wasn’t clear from my other messages but I do have other investments.0
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