Selling everything when the market reaches a new all time high

coastline

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).

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.

Against the grain with this 20 year chart which is set in a weekly time frame using two moving averages.
Where there's a crash exit and entry points have made very good returns in the range of 30%.
Its a bit less accurate around 2012 and recently 2016 but maybe its better to be safe that sorry.?
Nothing wrong with taking profit as we ain't getting any younger..

http://stockcharts.com/public/1720655/chartbook/445539200;

economic

coastline wrote: »

Against the grain with this 20 year chart which is set in a weekly time frame using two moving averages.
Where there's a crash exit and entry points have made very good returns in the range of 30%.
Its a bit less accurate around 2012 and recently 2016 but maybe its better to be safe that sorry.?
Nothing wrong with taking profit as we ain't getting any younger..

http://stockcharts.com/public/1720655/chartbook/445539200;

but im 33 and dont need the money from my investments (i have some cash).

Glen_Clark

Pincher wrote: »

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

No you don't need to explain that part. That much is obvious. But what then?
What do you do when you have sold if the price has not fallen?

chucknorris

Glen_Clark wrote: »

No you don't need to explain that part. That much is obvious. But what then?
What do you do when you have sold if the price has not fallen?

I sold about 12.5% (of my shares, not my overall portfolio, it would only be about 3.5% of my portfolio) when the ftse reached 7,300, and when it rose to 7,330 I sold another 12.5%, I did have another sell order in for 12.5% that would have triggered at about 7,360 (the triggers were actually on the unit price rather than the ftse, but obviously correlated).

I'm not totally comfortable strictly just holding, but I'm also not strictly comfortable trying to time the market either, which is why I didn't 'sell everything' (which is the title of this thread, so I'm not actually doing what the thread is discussing, i.e. 'selling everything'). But if pushed I would rather be in the market than out, so my buy backs were triggered quite quickly, so I'm back in now. I could have held out for a more of a dip (which did come), but at the risk of the market rising and perhaps missing out on the next ex-div date (March). I don't mind it falling further because I am in the process of selling a property, and I will probably want to invest the released equity into equities.

ChesterDog

I must admit to being a bit bemused by the whole notion.

For me, investing is a longterm thing.

It seems to me that many/most people here agree with that notion in principle, but then find reasons to bend or break that rule with some frequency.

If I was invested in a market in which the attainment of a record high was a harbinger of significant longterm capital loss, irrecoverable by simply staying invested, then I would consider myself to have invested in a quite unsuitable market in the first place.

chucknorris

ChesterDog wrote: »

If I was invested in a market in which the attainment of a record high was a harbinger of significant longterm capital loss, irrecoverable by simply staying invested, then I would consider myself to have invested in a quite unsuitable market in the first place.

For me it isn't about something becoming a long term loss by staying invested, it is simply trying to pick up some extra units in the 3 months between dividend payments, from the volatility. In addition to the long term growth and dividend income, my intention was never to be out the market for long, if possible (in fact it was just about a week).

chucknorris

economic wrote: »

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.

Yes that can happen, you could be locked out, but if you are only looking to take a little profit, even in a bull market there is volatility and you can sell, but still be able to guy back in. Of course it isn't full proof, and its a bit of a gamble, but then again what isn't? I don't need to drip feed back in, I've already reinvested it all, and added another £1,184 worth of units, not that much I know, but the intention was only to make a little and get straight back in (and repeat if it goes back up, my trigger is currently about 7,300 to sell).

chucknorris

economic wrote: »

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

That actually happened, I sold more, and then adjusted my buy back price a little higher than it previously was.

Pincher

Glen_Clark wrote: »

No you don't need to explain that part. That much is obvious. But what then?
What do you do when you have sold if the price has not fallen?

There's the day trader mentality, and there's the leave it to run its course business.

There are shares that just keep going up, in line with very steady dividend growth, like:

https://www.bloomberg.com/quote/ORP:FP

With something like that, I will just buy and hold until rich old folks that can afford five star care homes start to decline.



With jittery things like Lloyds, it's a volatility play.
If I did buy, and it stayed low a for a year, there is the dividend (progressively increasing) to keep me warm.

I wanted to use up my 10% basic rate capital gains, so I sold 100,000 at 63p, and can't buy back for 31 days. In the mean time, I keep 70,000 shares inside a S&S ISA, just in case. Lloyds went up to 66p during the 31 days, and is hovering around 64p.
The 100,000 shares were sold at 69p previously, and bought back at 53p. Alright, it is not strictly half and half, but I didn't have enough cash sloshing around inside the ISA.

Ideally, I buy back 100,000 shares at 62p, and sell the 70,000 shares at 64p, or more. This will free up the cash for more tax manoeuvring.

I have a lot of HSBC, bought at £4.25, so I'm sitting on 55% gain, which is a buy and hold life cycle squeezed into a few months, so I should just take the money and run. Ironically, I can't sell the damned thing, because I will have to pay 20% capital gains tax. Plus, the 40p (~= 51cent) dividend is 9.4% on the buying price of £4.25. Where am I going to get 9.4% and pay 7.5% dividend tax again?

Probably will repeat the ISA manoeuvre for the HSBC double dip dividend in March. Need to free up the cash in the ISA by selling the LLOY 70,000 shares, then buy HSBA before it goes ex-dividend. Let all the shares go ex-dividend. After April 6th 2017, SELL the HSBA outside the ISA. Conveniently, the dip in share price due to going ex-dividend means I pay less in capital gains. :j But I get it back in the form of dividends.

Yet again, not enough cash in the ISA to match the shares being bed and ISAed, so if it shoots up during the 31 days, I will lose out.
But at 55% gain, the worry is more about falling prices.

Pincher

ChesterDog wrote: »

For me, investing is a longterm thing.

It seems to me that many/most people here agree with that notion in principle, but then find reasons to bend or break that rule with some frequency.

I'm also paying 20% tax on 1% interest from NS&I, because I have a chicken side to me as well. Or is that just following through with my half and half philosophy?

Just remembered, I bought and held two BTLs for 18 years.
Sold one in 2016, and kept one.

HALF and HALF, through and through.