Selling everything when the market reaches a new all time high

Glen_Clark

Ray_Singh-Blue wrote: »

I sold 404 units of VWRL last week, intending to find a point to buy back in within 2 weeks. Today, for almost exactly the same money - about £23,500 as it happens-I bought 409 units.

What would you have done if the price had not fallen?

economic

Pincher wrote: »

I don't like selling at the peak, because NOBODY is buying.
Then everybody is trying to get out. In fact, only a few months ago, property funds shut the door on investors trying to redeem and run.

You know how much you bought at, so you know perfectly well when you have made money.

It's simply the reverse of drip feeding.
You can drip profit take.

It's like a marriage. The husband gets a boner, and the wife has to accommodate it. With stock, the chart gets a boner, and I profit take.

I can't demand the delivery courier not to ring when I'm sitting on the toilet, which seems to happen EVERY TIME. I can't demand shares don't go up when I'm skiing in the ALPs. I CAN sell "some" when I know I've made some money. Well, I don't sell when it pushes me over the tax threshold, which is my problem right now.

what would you do if the price rises after you sold some?

Pincher

Glen_Clark wrote: »

What would you have done if the price had not fallen?

economic wrote: »

what would you do if the price rises after you sold some?

Can you confirm that you understand the other half/portion that was NOT sold has not lost anything?

If you understand drip feeding, you should also appreciate the benefit of spreading out your profit taking. In fact, making use of your annual tax allowance(s) makes it an exceedingly good idea.

economic

Pincher wrote: »

Can you confirm that you understand the other half/portion that was NOT sold has not lost anything?

If you understand drip feeding, you should also appreciate the benefit of spreading out your profit taking. In fact, making use of your annual tax allowance(s) makes it an exceedingly good idea.

thats why i said some.....

i know you will have some invested still i just dont see why you would sell any of it unless its for tax purposes or you needed the money. otherwise its still just a punt. you are assuming a certain rate of drip feeding. how do you know you would sell all by the time the market peak? maybe you will sell all and the bull market would have been half way to peak? maybe you would just start drip feeding out now and the market crashes. you dont know.

Pincher

economic wrote: »

you dont know.

I don't need to know I sold at the peak.
I do know I made some money, that's why I sell.

Half and half allows you to play buy and hold, and meddle at the same time.

There are two extremes of how you approach investment.
You can leave it to your little money man to get on with it, and never do anything sordid like looking up stock prices, or fiddle with it yourself.

When I have enough for an Aston Martin, I'll leave Crispin to deal with it.
Right now, I am working my money hard, and it means fiddling with it.

economic

Pincher wrote: »

I don't need to know I sold at the peak.
I do know I made some money, that's why I sell.

So, what's the idea? Keep build it up for 20 years or so, and then somehow "sell at the peak"?

Assuming everything is in an ISA, so tax is not an issue, you still need to redeem, one way or another. The market peaking just when you want it to, is not going to happen. Ultimately, you will end up withdrawing money in tranches, and you might as well do it when markets are buoyant.

i see where you are coming from. goes against lot of the advice and general rule you see in this forum and other sites (monevator etc).

i do tend to agree there is a time ot buy and sell anything and buy and hold long term does not make sense in terms of building wealth (all markets have cycles and sometimes can be very long).

everything is a risk at the end of the day. i think if one is diversified (has stocks but also some cash too) itll be harder to sell stocks then if someone was all in in stocks.

Ray_Singh-Blue

Glen_Clark wrote: »

What would you have done if the price had not fallen?

Buy back in within a couple of weeks at a higher price, and then whinge about it here.

Glen_Clark

Pincher wrote: »

Can you confirm that you understand the other half/portion that was NOT sold has not lost anything?

Yes.
So you obviously didn't know the price was going to fall or you would have sold the lot. Thats why I asked what you would have done if the price had not fallen. But since you didn't answer I am none the wiser.

Pincher

Glen_Clark wrote: »

Yes.
So you obviously didn't know the price was going to fall or you would have sold the lot. Thats why I asked what you would have done if the price had not fallen. But since you didn't answer I am none the wiser.

Do I really need to explain hedging?

If the price falls, you have reduced your losses.
If the price rises, there is still half the holding to benefit from it.

I don't need to know whether it's going to rise or fall. I have both scenarios covered.

Why do I buy insurance? Why don't I just assume my house will never burn down, and no burglar will ever break in. The subsidence thing was a real downer, even with the insurance eventually paying out.

Pincher

economic wrote: »

i see where you are coming from. goes against lot of the advice and general rule you see in this forum and other sites (monevator etc).

Do these rules tell you to not use the tax allowances as you go along?

Silly me. Everybody has all their investments in ISAs, I must be slow or something.

However hard I try, I just can't squeeze this damned Buy To Let into an ISA. :mad: