Stocks & Shares ISAs

SonOf

I was wondering if it would be a good idea to do this with some or all of my unit trusts for what I think is going to be a bad year or two for the Markets with Coronavirus and Brexit.
The fact you mention Brexit indicates that you are not an experienced investor.   Yet, you are suggesting that you can time the market.  Is that likely?  It's not wrong to be inexperienced but it can lead to making bad decisions. 
I could then buy back in when the market bottoms out.
And when will that be?
What are the negatives to doing this?
1 - you won't know the top of the market and will time it wrong
2 - you won't know the bottom of the market and will time it wrong
3 - you won't know if the drop is a short sharp one or a double dip or triple did or a sustained decline over 3 years or so.  
4 - you miss out on dividends and reinvestment of them.  

If you look at some of the biggest one day falls on the FTSE100, they ranged from needing 3 days to recover to 648 days.   There is no way to know when to to exit and enter.
It seems logical but no one seems to be talking about it.
Because most people are better off punching through it and coming out the other side.  Especially if you are paying in regular contributions.

eskbanker

bowlhead99 said:
*edit, sorry i was on mobile and didn't realise this question was from some time ago and had already been answered. Hopefully they will have the date stamps displaying again soon.

At least the answers given have been remarkably consistent!

eskbanker said:
your friend is talking rubbish

ColdIron said:

Your friend is talking rubbish.

bowlhead99 said:
Your friend is talking nonsense.

eskbanker

Nardge said:

The stock market has since crashed markedly further.

It really hasn't! At this stage at least, this is a minor blip, not a crash....

carrollp

eskbanker said:

carrollp said:

now that you can transfer within the ISA wrapper to Cash I was wondering if it would be a good idea to do this with some or all of my unit trusts for what I think is going to be a bad year or two for the Markets with Coronavirus and Brexit. I could then buy back in when the market bottoms out.
What are the negatives to doing this? It seems logical but no one seems to be talking about it.

Timing the market is a great idea in theory but notoriously very difficult to actually do, so most are sensible enough not to try it.  At one end of it, how do you decide when to sell?  Tomorrow, after several days of market drops already, or waiting longer just to be sure?  How do you know it's not going to bounce back next week/month?  Likewise, what makes you think you can identify the bottom of the market?

In terms of rationale, Corona virus does seem to be a credible reason for the current market conditions but in global terms Brexit is an irrelevance.  What made you pick these out from all the other factors affecting global markets, such as trade tensions, military escalations, major weather events, commodities, etc, etc, and what makes you think that you know more than the professional traders who've already driven or exploited value changes before you get to hear about them?

Thanks, fair points. I agree Brexit is going to be more of a long term and more complex issue so probably should not have mentioned it. I see the real threat as Coronavirus and while I am not usually one for panicking and rode out the Y2K crash and 2008 I am concerned about this.
Given the effect Covid-19 has already had with the tiny number of people actually affected even in China (80k cases out of a population of 1.4B = 0.006%) I wonder what is going to happen when it really becomes a Pandemic as it surely will and 40-60% of people Globally catch it. The fear and panic has the possibility to effectively stop world travel and trade in an effort to prevent it spreading in the short/medium term but eventually people will just have to accept that it will spread in the population and people are going to die. At the moment that number is around 1% (bad enough) but that is with good medical treatment available. If the infection rate rises even a modest amount Health systems will be unable to cope and that death rate could rise substantially.
I have not done anything yet but my Fund is already down £20k in the last week so the professional traders are catching on.

dadacool1

So my stocks and shares ISA experience is off to a great start.
opened with £5000 on 20/02, I had been looking at investing for sometime and chose just the right time for a market crash. so far the plan is down to £4800 in 6 days. This was put in as a long term investment with a view to continually add to it as and when so my initial thought is, there is nothing I can do and I just need to ride it out and stop looking at it.
Other idea would be to accept losses and pull out funds into cash in the plan and wait and see before getting back in.
or double down and add more when things are looking more positive/less virusey.

I feel it may be a case of boo hoo and just accept I have the worst timing in the world and leave it alone but would appreciate some others opinions.

eskbanker

dadacool1 said:

So my stocks and shares ISA experience is off to a great start.
opened with £5000 on 20/02, I had been looking at investing for sometime and chose just the right time for a market crash. so far the plan is down to £4800 in 6 days. This was put in as a long term investment with a view to continually add to it as and when so my initial thought is, there is nothing I can do and I just need to ride it out and stop looking at it.
Other idea would be to accept losses and pull out funds into cash in the plan and wait and see before getting back in.
or double down and add more when things are looking more positive/less virusey.

I feel it may be a case of boo hoo and just accept I have the worst timing in the world and leave it alone but would appreciate some others opinions.

Buying high and selling low is rarely a recipe for investing success so don't be tempted to sell just because values have dropped, especially when it's just 4%, which is nothing in the grand scheme of things - if you're holding for the long term then there will be worse times than this!  Rather than this being a time to panic and/or sell, seasoned investors see lower prices as a buying opportunity at bargain prices....

Queen_of_the_Hive

Must admit I'm holding my nerves at this stock market situation! It's going to be a bumpy ride! 

masonic

Nothing is unusual about the current conditions. What was unusual was the steady growth experienced in the previous several years.

carrollp

dadacool1 said:

So my stocks and shares ISA experience is off to a great start.
opened with £5000 on 20/02, I had been looking at investing for sometime and chose just the right time for a market crash. so far the plan is down to £4800 in 6 days. This was put in as a long term investment with a view to continually add to it as and when so my initial thought is, there is nothing I can do and I just need to ride it out and stop looking at it.
Other idea would be to accept losses and pull out funds into cash in the plan and wait and see before getting back in.
or double down and add more when things are looking more positive/less virusey.

I feel it may be a case of boo hoo and just accept I have the worst timing in the world and leave it alone but would appreciate some others opinions.

I feel your pain and you could not have started your plan at a worse time. I would certainly hold off putting any more in until things settle down but I think this is going to get much worse before it gets better. (see my previous post). Fear and uncertainty is driving the market. It will either turn out to be not as bad as people think and things will recover or the full effects will become clearer and the market will adapt to the new reality and stabilise. I think that we are just going to have to accept that the best we can do is slow the spread as much as possible to allow health systems to prepare but that will have a huge economic cost.
The problem with managed funds is that even if you decide to buy or sell it takes about 5 days so it is difficult to react quickly to events. I am annoyed at myself because I had a bad feeling about C-19 three weeks ago and started thinking about moving to cash but was not sure if there were penalties or risks in doing that so I held off. I wish I had gone with my gut now as I would have saved £20k and perhaps much more if this goes south.
When you do get back in it is probably better to setup a monthly deposit to spread the risk rather than putting in large sums sporadically. Also spread your funds around different markets. That has served me well with around 9% avg return over 20 odd years.

Amoux

dadacool1 said:

So my stocks and shares ISA experience is off to a great start.
opened with £5000 on 20/02, I had been looking at investing for sometime and chose just the right time for a market crash. so far the plan is down to £4800 in 6 days. This was put in as a long term investment with a view to continually add to it as and when so my initial thought is, there is nothing I can do and I just need to ride it out and stop looking at it.
Other idea would be to accept losses and pull out funds into cash in the plan and wait and see before getting back in.
or double down and add more when things are looking more positive/less virusey.

I feel it may be a case of boo hoo and just accept I have the worst timing in the world and leave it alone but would appreciate some others opinions.

Don't fall at the very first hurdle. If you are going to invest at all, you need to be in it for the long ride. Like you said, it's a long term investment, so you need to think there is plenty of time for it to recover and grow. Stick to the plan.
Investing regularly not only keeps you disciplined, but also benefits from pound cost averaging which can help smooth out market volatility. So I wouldn't take the advice to sit it out until things improve.