Selling long term investments at loss

darkidoe

Novice_investor101 wrote: »

Keeping it simple til you you have a decent amount accumulated seems the best idea.

The difficulty is when do we make the call about having a 'decent' amount accumulated? Is it 50K or 100K or even more? And if the current plan has worked so well, why do we then want to change the plan?

I think the fundamental question is: When is the point where that there is significant tilt to upside benefit of adding in more complex/niche funds to the broad based tracker? Is it based on a figure on the overall portfolio, or a based on level of knowledge and awareness of risk and benefit. This can be challenging task for a DIY investor.

Novice_investor101

I'd expect "a decent amount" is purely subjective. & How much risk a person wants to add in is also purely subjective & will be based on what other investments are held, how much is in cash, how much is in direct company shares, & then values of collective investments.
My own strategy consists of keeping with 2-3 tracker funds that cover as much of the global equities market as possible, leaving the fund managers to figure out regional allocations.
I'll dial the risk down a bit when I get towards 55 & retirement beckons. I'm not thinking about that for 20 years.

If I were to add any niche funds, it would be at a much later date with a very small % of my overall wealth - as a bit of fun with money I would not miss if it plummeted.

Herbalus

The consensus on here surprises me. I was expecting a lot more telling off for having 39% of my LISA in a ftse250 tracker.

What is persuasive in the “not sell” camp is the idea of selling low and buying high (as the black rock fund has not fallen as much). The part that is particularly poignant is what fund do I expect to grow the most over the next time period. The trouble is I don’t know - I’m just guessing, as we are all guessing and gambling that the funds we choose will grow, regardless of how well chosen.

Yes - HL are the cheapest for how I invest in a LISA due to lack of fees for regular investing.

I suspect I will just leave it. Deep down I’m probably just unhappy about the recent performance and wanting a “better” fund, which I know is par the course in 100% equities but have never actually been through it.

Prism

Herbalus wrote: »

I suspect I will just leave it. Deep down I’m probably just unhappy about the recent performance and wanting a “better” fund, which I know is par the course in 100% equities but have never actually been through it.

If a comparison helps, my active UK mid cap (250) fund is down 24% over the last 6 months however it is still one of the best performers over the last 3 years. Its harder to see a performance drop just after you first invest rather than after a period of decent performance. Stick with it.

atush

If you dont want to sell at a loss, you dont have to.

You can instead just put new money into different places/allocations. then revisit sellling the old funds once they have recovered (as they tend to do over time) in the meantime reinvesting the dividends into new units at lower prices.

Alexland

darkidoe wrote: »

The difficulty is when do we make the call about having a 'decent' amount accumulated? Is it 50K or 100K or even more? And if the current plan has worked so well, why do we then want to change the plan?

My SIPP is six figures in a single global diversified fund and I remain unconvinced on the benefits of splitting it into a portfolio of multiple funds, rebalancing it, etc.

While I can see the upside possible by increasing concentration and/or tilting into factors such as value, quality, cap weighting, etc these is also significant downside risk and if you judge the timing wrong you can underperform even a declining market.

The bigger the pot the more mainstream I want the investment. I just adjust the equity to bond risk dial to limit downside exposure and take advantage of occasional market dips.

Alex

dqnet

Alexland wrote: »

While I can see the upside possible by increasing concentration and/or tilting into factors such as value, quality, cap weighting, etc these is also significant downside risk and if you judge the timing wrong you can underperform even a declining market.

The bigger the pot the more mainstream I want the investment. I just adjust the equity to bond risk dial to limit downside exposure and take advantage of occasional market dips.

Alex

This is pretty much exactly how I have been playing it. When I have spare to invest in my LISA I just purchase more of the same shares in the Fund - trying to avoid multiple trades to avoid fees of course and just make single larger purchases.

darkidoe

Herbalus wrote: »

The consensus on here surprises me. I was expecting a lot more telling off for having 39% of my LISA in a ftse250 tracker.

What is persuasive in the “not sell” camp is the idea of selling low and buying high (as the black rock fund has not fallen as much). The part that is particularly poignant is what fund do I expect to grow the most over the next time period. The trouble is I don’t know - I’m just guessing, as we are all guessing and gambling that the funds we choose will grow, regardless of how well chosen.

Yes - HL are the cheapest for how I invest in a LISA due to lack of fees for regular investing.

I suspect I will just leave it. Deep down I’m probably just unhappy about the recent performance and wanting a “better” fund, which I know is par the course in 100% equities but have never actually been through it.

I think as long as you understand it is not an ideal allocation and see it as a work in progress, it is fine. In such a small portfolio, it is not going to make too much of a difference at the moment, I suppose the idea would be to figure what you want your regional allocations to be like when you start to accumulate more. Like you said, its as much of a guess. That's why many leave it up to the Market Cap indices to decide or fund managers to decide.