Time to Sell Investments (Take the profit)

BLB53

For me, the magic formula is to always have 50% invested so if you are more than happy with the returns so far, sell half and see how it goes.

You do not say if you are 100% equities thus far. To lock in some profits you could look at the likes of Capital Gearing for some of the profit rather than cash.

If you go 100% cash anticipating a crash, when do you re-enter? Probably not when the markets have fallen 10% as there may well be more to go, same with 20%...etc

bostonerimus

BLB53 wrote: »

For me, the magic formula is to always have 50% invested so if you are more than happy with the returns so far, sell half and see how it goes.

IMHO cash in a saving account is invested. Everything in your portfolio should have a function; cash for spending and guaranteed interest; bonds and gilts for stability and a bit more interest; equities for dividends and growth; property for "saving", capital appreciation and somewhere to live etc.

Sue58

Thank you everybody for your input into this thread. Some posters have asked about our personal circumstances, well at the moment, our investments are approximately 85% equities and 15% cash (just over £100K). My husband is 60, retired and a non earner and I am 58 and still working so we live off my wage at the moment. At this point in time we have decided to stay invested mainly because of our cash buffer.

bostonerimus

Sue58 wrote: »

Thank you everybody for your input o this thread. Some posters have asked about our personal circumstances, well at the moment, our investments are approximately 85% equities and 15% cash (just over £100K). My husband is 60, retired and a non earner and I am 58 and still working so we live off my wage at the moment. At this point in time we have decided to stay mainly because of our cash buffer.

How did you develop this asset allocation and can you give us some idea of where/how your equities are invested? You might want to consider moving some of the equities to high quality corporate bonds and UK gilts that will reduce the volatility of your overall portfolio. You won't get much return and might see a small drop in value over the next few years as interest rates creep up, but they are a good place to bank some funds that you don't need for a few years. You could also look at a savings bond ladder.

BLB53

Thank you everybody for your input into this thread. Some posters have asked about our personal circumstances, well at the moment, our investments are approximately 85% equities and 15% cash (just over £100K)

I think 85% equities is on the high side..or would be for me coming up to retirement. Maybe think about reducing to say 60% which should make things less volatile when the market correction eventually hits.

kidmugsy

bostonerimus wrote: »

Tactical selling on a gut feeling or because some P/E ratio or interest rate has peaked is best left to the professionals as they are sensible enough not to risk their own money.

Most professionals funk it with your money because of their career risk. What the OP might like to know is what the professionals do with their own money. So would I.

kidmugsy

bostonerimus wrote: »

IMHO cash in a saving account is invested. Everything in your portfolio should have a function; cash for spending and guaranteed interest; bonds and gilts for stability and a bit more interest

Currently it's dead easy to get more interest on cash than gilts unless you're dealing with a SIPP provider who pays negligible interest on cash.

StellaN

Sue58 wrote: »

Thank you everybody for your input into this thread. Some posters have asked about our personal circumstances, well at the moment, our investments are approximately 85% equities and 15% cash (just over £100K). My husband is 60, retired and a non earner and I am 58 and still working so we live off my wage at the moment. At this point in time we have decided to stay invested mainly because of our cash buffer.

IMHO I think you have made the right decision to stay invested although you may want to re-visit your risk tolerance or asset allocation. As an example, I sold out of SMT because I had made a good profit and I thought the share price was high, I think it was around 370, however the price continued to rise up to a high of 575 so I lost out by taking the profit and not staying invested.

Audaxer

Sue58 wrote: »

Thank you everybody for your input into this thread. Some posters have asked about our personal circumstances, well at the moment, our investments are approximately 85% equities and 15% cash (just over £100K). My husband is 60, retired and a non earner and I am 58 and still working so we live off my wage at the moment. At this point in time we have decided to stay invested mainly because of our cash buffer.

I thought you meant the total portfolio was just over £100k (£85k equities and £15k cash), but reading it again is it just the cash buffer that is over £100k?

masonic

Audaxer wrote: »

I thought you meant the total portfolio was just over £100k (£85k equities and £15k cash), but reading it again is it just the cash buffer that is over £100k?

Sue mentioned in her OP that she was holding enough cash to last "quite a few years". £100k in total won't get you very far in retirement.