When is it time to sell?

Glen_Clark

Thrugelmir wrote: »

And the relevance to this for a 30% rise?

Tesco's margins will be lower in the years ahead. Never be as profitable again in the future.

Like Lloyds was the topic of discussion 5 years ago. Over time the noise will die down. As it's going to take a while to turn this juggernaut around and refocus the business back on what it does best.

I did not see the comment you quoted from the Registrars?
(I was going by the short selling activity that was listed on their shares quote page in the FT)
Tesco wasn't as profitable in the past either, the figures were fiddled. But if they close the lossmaking stores it will not only raise overall profitability, but perhaps also restore their reputation. Where they were criticised for opening new hypermarkets they are now being criticised for cancelling them. People will realise Tesco wasn't so bad after all when they lose their local store.

Thrugelmir

Good article in Investors Chronicle today. Called "Prune for Profit: How Trimming Your Portfolio can make it grow stronger.

A snippet for those that don't subscribe or read the publication.

But let’s start conventionally enough by examining why an investor might sell. Understanding the phoney reasoning at work makes it easier to accept that ‘how to sell’ really is much more important than ‘why’.

There are just three reasons for selling a quoted security in an investment portfolio. One – you loused up on your original assessment so what you thought was a thoroughbred looks more like a donkey and won’t achieve the returns you expected. Two – something bad happened that just could not be foreseen, so the prospect of good returns have gone ‘phut’. Three – you find an irresistible proposition and you have to free up capital to make the investment.

Notice there is nothing here about selling because the price has gone up a lot, or even if the price has fallen a lot; nothing about selling because you need to rebalance your portfolio, or selling because there is a ‘y’ in the month, or any of the spurious reasons splurged out to justify selling an investment.

Look around the web and you’ll see quite a few. The ‘best’ (ie, the worst) ones we found were: “Most financial planners suggest dropping a stock if it falls 10 per cent.” Not those with half a brain. “Any sale that results in a gain is a good sale.” Oh really. “Rebalance your portfolio every year by selling the winners and buying more of the stocks that did not do well.” Not quite so asinine as the other two; it flies in the face of rational advice, but might work for those who think that mean reversion is more powerful than momentum.

[Deleted User]

I manage a large sipp for my dh, his lifetime pension pot,I vested it for him 5 years ago and in that time it has increased on average 13% year on year . Profits have been large during the past few weeks, so today I have taken profits and sold everything, all pure stocks as I don`t hold any funds. I use TA and usually support and resistance also candlestick charts and various other indicators, so tomorrow I will spend a few hours looking for buy back points

If not sure then it is good to sell half the holdings but a profit is a profit and I never mind if I don`t quite time it right. I sell and wait for the price to fall again. I am a position trader, ie I trade and hold, sell when appropriate and buy back again, always looking to get more shares for the same money. I never follow the herd

I just have to add that I never say `what if` or `maybe`, TA is an absolute indicator for me and I remain detached when trading, never emotional

ukx, 6840 is the highest point on my charts, for the past 5 years so very little reward left for the potential risk. It almost touched that point today

EdGasket

kittie wrote: »

ukx, 6840 is the highest point on my charts, for the past 5 years so very little reward left for the potential risk. It almost touched that point today

But FTSE was at this level in year 2000; don't you think after 15 years we might get some gains? After all equities are supposed to rise overall and be a better investment than both cash and bonds over the longer term.

[Deleted User]

no ifs and buts with me Ed, I decided it was time to sell. I have to be detached and unemotional as it is my husbands pension I deal with, our future.

a nice freebie if you want to see live ftse
http://www.livecharts.co.uk/MarketCharts/futsee.php

Kraftskiva

kittie wrote: »

no ifs and buts with me Ed, I decided it was time to sell. I have to be detached and unemotional as it is my husbands pension I deal with, our future.

a nice freebie if you want to see live ftse
http://www.livecharts.co.uk/MarketCharts/futsee.php

Have to say I did the same this morning - sold VUKE at 30.61 after buying at 28.7. Given the level of the FTSE and having waited for yesterday's Euro QE announcement, couldn't help but feel it was time to sell.

Selling has always been an issue for me to be honest but think I've reached a point where I can control the 'just a bit more' impulse. It helps not to buy anything you wouldn't be happy to hold indefinitely.

gadgetmind

crystal_pixie wrote: »

Strategy - if I think a fund is underperforming after 6 months I will switch

Sell low.

to either a fund that is performing well

Buy high.

You should be doing pretty much the opposite of your current approach!

Ryan_Futuristics

Thrugelmir wrote: »

Good article in Investors Chronicle today. Called "Prune for Profit: How Trimming Your Portfolio can make it grow stronger.

A snippet for those that don't subscribe or read the publication.

Solid advice, but there are so many different ways to look at it - writers tend to come at it from one angle, then treat it as gospel

Warren Buffett achieved his 20%/year since the 50s by buying low and holding on (potentially) forever ... But George Soros achieved very similar doing the opposite: buying high and selling higher ... But if you blurred the two approaches the wrong way, you'd probably be in trouble

The one thing I'm less keen on now is conventional rebalancing - I think I'm limiting my rebalancing to using fixed income to top up undervalued assets, and a degree of profit-taking otherwise just to maintain a 30% fixed income and cash buffer

gadgetmind

Ryan_Futuristics wrote: »

S
The one thing I'm less keen on now is conventional rebalancing - I think I'm limiting my rebalancing to using fixed income to top up undervalued assets, and a degree of profit-taking otherwise just to maintain a 30% fixed income and cash buffer

Well, that only works if fixed income has risen above 30% and you have some undervalued assets that are out of kilter. At times when equities are soaring, and fixed income maybe taking a knock, you be finding yourself going the other way to maintain 30%.

Which is (ta da!) pretty much conventional rebalancing.

Ryan_Futuristics

gadgetmind wrote: »

Well, that only works if fixed income has risen above 30% and you have some undervalued assets that are out of kilter. At times when equities are soaring, and fixed income maybe taking a knock, you be finding yourself going the other way to maintain 30%.

Which is (ta da!) pretty much conventional rebalancing.

Well at the moment my fixed income is all P2P lending - and if I go back to bonds it might only be in the form of a short-term bond ladder

So if P2P can maintain around 7% returns (however taxation changes in future) that should roughly match long-term average market returns, and ensure you've got a reservoir protected from market movements

But it's more the idea of rebalancing by sector - maintaining a UK allocation, etc. I'll aim to keep buying cheap, wherever that may be, and profit-taking when valuations are looking full ... Quite a while ago I stopped automatically reinvesting dividends, and instead they automatically go into cash/fixed income, and from there I can choose what goes where when opportunities arise