When to cash in S&S ISA

MoeFurse

Looking for some advice! I need to release cash from my S&S ISA by Easter and don't know whether to cash in now or wait 2 or 3 weeks to see if the markets improve.

Would be interested to hear some opinions but realise that nobody has the crystal ball!

Undervalued

MoeFurse wrote: »

Looking for some advice! I need to release cash from my S&S ISA by Easter and don't know whether to cash in now or wait 2 or 3 weeks to see if the markets improve.

Would be interested to hear some opinions but realise that nobody has the crystal ball!

Too true!

The compromise may be to sell some of the units each week (obviously assuming this does not incur additional charges).

BananaRepublic

All you will get is opinion which may, or may not, be sensible. I read an article by Niall Ferguson in the Sunday Times last weekend, which stated that there is now no real cause for concern in the West. Employment is rising, the banks are much more stable than in 2008, inflation is low, and low oil prices are good for us. But China will have to devalue its currency, and some oil producers such as Russia may be in trouble. What I have read elsewhere seems to broadly agree with this.

I happen to think the worst is over, and the markets will recover over the next year. I put my money where my mouth is a few weeks ago. And I expect to show a good profit in a few years. As for the next few months, no idea. But I could be wrong ...

Or, to put it more succinctly: "You've got to ask yourself one question. Do I feel lucky? Well, do ya, punk?"

bowlhead99

As there are 10-15 business days in the next 2-3 weeks and on each of those days you can cash in any amount of assets between £1 and the total cash you need to release... there are many thousands of permutations you could use. As you mentioned, we don't have crystal nadgers (a technical term for foresight) and so any recommendation would just be speculation.

If I had to bet on the rest of the year, like Banana says I would probably say a bit up rather than down. But asking where it will be in a specific one week period a fortnight from now - is a joke. Nobody can tell you.

Also, whether your ISA wealth would benefit or be worsened by the market movements depends very much on what you actually hold in the ISA.

For example, Lloyds bank shares are up 7% since end of day Friday but down 14% since the start of the year. Deutsche bank shares are only up 3% since Friday and down about 25% since last year end. So if you sold both on Friday you might regret it today -but actually you'd have been better selling six weeks ago.

By contrast,. Personal Assets Trust is down 0.8% since Friday which is much worse than buying those two individual banks and you should have sold it Friday instead, but up 1.6% so far this year and you'd be better off than if you sold on New Years Eve. It is the opposite way round.

The only obvious advice to give is that if you can't afford - or would be very upset and frustrated by - your holdings dropping in value by the worst amount they could feasibly lose in the 2-3 weeks between now and when you actually need to release the cash (10%? 30%?) : you should sell ASAFP (pardon my French).

Playing_with_Fire_2

There is no crystal ball.

However, over the many years there is generally an improvement in the UK stock market in the run up to Easter and in the run up to the end of the financial year (I think possibly procrastinators stuffing their ISAs). It is feasible but not guaranteed that there could also be a net influx to the UK market following whatever George says on the 16th March about pensions. Google Santa rally and Easter Bunny rally for more people talking about crystal balls.

Personally, I would plan to wait until the week before Easter, and then sell if I saw a spike on the 17/18 March, but I would be okay if I knew that I made a bet and lost. The other thing you could do (depending on what you are selling), is wait for a good news story, sell then, and then don't watch any news or check the markets until you've forgotten the price you sold at.

May the odds be ever in your favour.

Malthusian

Can you put off whatever it is you need the money for?

My S&S ISA is currently earmarked for a house deposit and the fall in the markets has naturally restricted my options. But I am happy to leave it in the markets because it's not a disaster if I have to rent for an extra year or two until markets recover. (And if I'd kept it under the mattress I wouldn't even be thinking about buying a house now.)

If your need for the money is set in stone, then it's a pure gamble on short-term market movements. No-one has any idea whether the market will be up or down in the next few weeks.

If you would be unable to afford the "need" if markets fell further in the next few weeks then you should consider encashing now. If the markets then go back up, it's of no relevance to you and should not be a source of regret. If you go into the shop at 1pm to buy a sandwich, and on your way home at 6pm you see the same sandwich in the clearance bin for 40% less, it would be silly to kick yourself. You needed a sandwich at 1pm - the price at 6pm is no more relevant than the price of sandwiches in Hong Kong.

bigfreddiel

Look at it this way, how would you feel if you cashed in now and then the stock market went south, pretty good I expect, on the other hand, what if it went up massively, you would few gutted.

So weigh up which feeling you would rather have, good or gutted and base your decision on that.

Cheers fj