Sell up investments now crystallising gains

sleepisfortheweak

We have around £100k of ISA investments, all standing at a decent gain due to the recent market movements. We will be paying downs much as possible of our mortgage next March before remortgaging what debt is still outstanding (five year fixed interest period will be up then).

I am wondering whether to sell the investments now, crystallising the gains, and stick the cash in the best interest account we can find until then?

I suppose it is a question of market timing and so crystal ball gazing. It's difficult to see that markets can continue to rise but i guess no one knows.

OldMusicGuy

First, read this thread: https://forums.moneysavingexpert.com/discussion/5617940

Then ask yourself these questions. If you stay in the market until next March, how bad would you feel if your £100K was hit by a market correction and was only worth say £90K? Would you take it on the chin and say it's just one of those things? Or would it make you feel really bad because it means you pay off less mortgage than you could have done?

Then think of the alternative view. Let's say you sell up now and put the money in an NS&I account or similar paying 1% or less and the market stays buoyant. You have £100K and some change, but let's say you could have had £110K if you had stayed invested. How bad will you feel in that circumstance?

So do you value the upside more than you fear the downside? And remember, no one knows where we will actually be next March. So answer those questions honestly and make your choice. You also need to make your own decision about what the possible upside could be compared to the downside (ie do you view the chance of a large downward correction higher than the chance of good upward movement before next March).

Personally (and this is NOT financial advice), I am a fraidy cat and am holding a lot of cash right now. But as I am retiring soon I need to preserve some of my gains. However I still have some equity-heavy investments that I view as 10 year plus investments so if they get hit in the short term hopefully they will be back in the longer term.

Broken_Biscuits

My opinion is...If you have a purpose for the ISA money in the next 12 months it's probably best to pull it out now. 12 months is likely to not be long enough to allow any losses you may suffer to be recovered.

Over 5-10 years plus you would hope your s+s isa is the best place for your money, but with 12 months or less it's a bit of a gamble that may lose you a big chunk of your deposit.

EdGasket

This question has already been done to death in the thread referenced above.

unitedwestand

Having £100k sitting in the stock market when you're over £100k in debt to the bank is a huge life gamble.

Personally I'd be securing the roof over my head first before floating savings of that value in in stocks.