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Good time to sell funds?

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Judging by my portfolio and the performance of certain geographical sectors in 2015 I presume that many people are seeing 10% fund gains at the moment year-to-date.

Assuming we're not going to be seeing a 30-40% gain this year (would be nice!) is now looking like a good time to sell?

Understanding that drip feeding, fund selection and asset allocation offer downside protection why not sell up now avoiding the downside - lock in these gains and then buy back in to the same funds post-correction?

Not timing the market as such, more preparing for the inevitable.

This is especially pertinent to those of us who may have certain targets. I, for instance have the lofty aim of hitting 10% annualised over the next 20-25 years. As i've already reached that target for 2015 I could conceivably sell up and wait 9 months for a decent re-entry point. Of course there's always the chance the markets could keep rising at this rate for the rest of the year. That would seem an unlikely scenario however.
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Comments

  • InvestInPoker
    InvestInPoker Posts: 1,356 Forumite
    You can't time the markets.
  • Kendall80
    Kendall80 Posts: 965 Forumite
    Ninth Anniversary 500 Posts Name Dropper
    You can't time the markets.

    I was hoping I pre-empted that response in my initial post ;)
  • InvestInPoker
    InvestInPoker Posts: 1,356 Forumite
    Kendall80 wrote: »
    I was hoping I pre-empted that response in my initial post ;)

    Yes but saying "Not timing the market as such" is a bit lol when that is precisely what you are attempting. Good luck if you do it, I don't believe you will be successful long term at it (neither would I or anyone else in here)
  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Post of the Month
    edited 23 March 2015 at 8:12AM
    Kendall80 wrote: »
    why not sell up now avoiding the downside - lock in these gains and then buy back in to the same funds post-correction?
    I could conceivably sell up and wait 9 months for a decent re-entry point.
    Not timing the market as such,
    Come off it mate that is EXACTLY what timing the market is.

    If you have invested in a varied portfolio of assets and some of them have gone up in value a lot more than others such that you are overweight in some areas and light in others, sell a portion of your winners to go back to your 'ideal' allocation. That is called rebalancing and is entirely normal.

    However, if you are only invested in highly risky shares and your 'balancer' is cash, then I guess you would sell a portion of those shares and put them in cash, back to whatever your long term asset mix of shares to cash is. Then either the rest of the shares will go down and you buy more with cash which didn't go down, or the rest of the shares go up and you sell some more of them and top up the cash again.

    The ideal mix of cash to shares is different for everyone, sometimes 50:50, 90:10, 10:90.
  • masonic
    masonic Posts: 27,223 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Kendall80 wrote: »
    Assuming we're not going to be seeing a 30-40% gain this year (would be nice!) is now looking like a good time to sell?

    Understanding that drip feeding, fund selection and asset allocation offer downside protection why not sell up now avoiding the downside - lock in these gains and then buy back in to the same funds post-correction?
    What if it goes on to rise another 15%, before a 10% correction? Would you buy back in at a higher price than you sold or stay out of the market and wait for the next 30-40% drop? What if we see another 60% of rises over a few years before that happens and never falls back to the level you sold at?
  • Kendall80
    Kendall80 Posts: 965 Forumite
    Ninth Anniversary 500 Posts Name Dropper
    Interesting responses gents thanks.


    Masonic - with the possibility of rate rises here and in the US do you honestly think that's a how a ftse 100 tracker would play out?


    Judging by the tone of the responses I wonder how many on here stayed invested and simply endured the 2008 crash. Of course you would've made your money back by now unless you'd chosen a really awful portfolio. Personally - I hope to keep up with the latest news so that I can sell the majority of my funds at the beginning of any 30-40% downer. Why lose gains when you don't have to?
  • InvestInPoker
    InvestInPoker Posts: 1,356 Forumite
    edited 23 March 2015 at 10:21AM
    Kendall80 wrote: »
    Personally - I hope to keep up with the latest news so that I can sell the majority of my funds at the beginning of any 30-40% downer. Why lose gains when you don't have to?

    You are saying you can predict a 30-40% downer on the first few days of losses, I will repeat again that you cannot. If you can then enjoy being a multi billionaire and remember to use the power of time travel wisely.


    What would actually happen in reality is most of the time you would be wrong and you would miss out on some gains instead of protecting from losses. On occasion you would be right (but you would have the same impossible task of calling the bottom). The average expected value of you indulging in market timing would be negative. Costs of dealing and time out of the market.

    EDIT:
    Kendall80 wrote: »
    Judging by the tone of the responses I wonder how many on here stayed invested and simply endured the 2008 crash.

    Why would it bother me if I truly understood what I was putting my money into when I started? Something like that will happen again during our lifetimes several times in my opinion - and I don't pretend to be able to forsee when and why.
  • le_loup
    le_loup Posts: 4,047 Forumite
    Kendall80 wrote: »
    Personally - I hope to keep up with the latest news so that I can sell the majority of my funds at the beginning of any 30-40% downer. Why lose gains when you don't have to?
    I'm afraid that is what most gamblers think - i.e. they know that the market is going to drop by 40% but no one else does!
  • Chickereeeee
    Chickereeeee Posts: 1,286 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Kendall80 wrote: »
    I, for instance have the lofty aim of hitting 10% annualised over the next 20-25 years. As i've already reached that target for 2015 I could conceivably sell up and wait 9 months for a decent re-entry point.

    If you want an average of 10% annualised, you will need AT LEAST 15% in good years to compensate for 'only' 5% rise in 'bad' years, as an example (to say nothing of years when there is a drop). So, if this is a good year, you have some way to go to meet you target.......

    C
  • C_Mababejive
    C_Mababejive Posts: 11,668 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    The trouble with funds of course is that they are not an immediate buy/sell especially if held via a nominee account so when the signals come,the chances are you will lose before the deal is done. Its not like the immediacy of trade with on line shares/stocks. Even then, you are almost never at a real advantage when the ripples start to spread.

    When you sell,what can you buy?

    Corporate bond funds? The country is awash with debt so might as well buy into some of it !
    Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
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