Can I cash in if value rises?

Murmansk

I've been doing a lot of research lately and have finally plumped for Vanguard LifeStrategy funds and purchased direct from Vanguard.

Now I know that one should only invest with a view to at least five years but, for the sake of argument, if my funds went up in value by 15% after one year could I cash them in, take the profit and then buy another lot of the original value thereby "crystallizing" my gain?

I've never had any interest in playing the stock market but what I've suggested sounds like a mild version of doing just that!

JohnRo

You'd sell an amount of whatever you held at the time you want to cash in your gains, such that what you're then left with is an invested amount equal to where you started in terms of valuation.

You can only buy again at the prevailing price on the day.

The question is what to do with that profit you've then taken and what you'd do if your investment subsequently drops by 15% the following year, would you put the profit you took back in again?

What if it went up 15% on average each year for three or four years?

aberlyfid_2000

there's no harm in re-assesing things at regular intervals. but re-investing it in the same thing doesnt change anything really!

jimjames

Murmansk wrote: »

Now I know that one should only invest with a view to at least five years but, for the sake of argument, if my funds went up in value by 15% after one year could I cash them in, take the profit and then buy another lot of the original value thereby "crystallizing" my gain?

How do you buy another lot at the original value as you've just sold for 15% more than you paid?

But yes there is no reason why you can't sell up after a year or even a day should you so wish.

jamei305

Murmansk wrote: »

I've been doing a lot of research lately and have finally plumped for Vanguard LifeStrategy funds and purchased direct from Vanguard.

Now I know that one should only invest with a view to at least five years but, for the sake of argument, if my funds went up in value by 15% after one year could I cash them in, take the profit and then buy another lot of the original value thereby "crystallizing" my gain?

I've never had any interest in playing the stock market but what I've suggested sounds like a mild version of doing just that!

Would have been nice if I could have sold my late parent's house for £250k and immediately bought it back for the £9K they originally paid for it. :beer:

Malthusian

Murmansk wrote: »

Now I know that one should only invest with a view to at least five years but, for the sake of argument, if my funds went up in value by 15% after one year could I cash them in, take the profit and then buy another lot of the original value thereby "crystallizing" my gain?

Assuming an initial investment of £100,000, it depends on whether the next time they go up by 15% you prefer to have £132,250 or £130,000. And whether the third time they go up by 15% you prefer to have £152,088 or £145,000.

If you think having £145,000 is better than £152,088 then it's a terrific idea.