Selling funds

jph29cd

I need some advice about selling funds:

3 years ago, my son was left about £3K split between 6 ethical funds, in a JISA. Some have done quite well (25% increase in 3y), others are fairly flat. He is now 18 and wants to liquidate some of the funds. Is it more logical to sell those which have done well or those which have not? He plans to hang on to the others for the medium term.

I have tried unsuccessfully to research this question on-line so I wondered if anyone here could provide me with a bit of wisdom?
Thanks

Albermarle

Is it more logical to sell those which have done well or those which have not?

I am afraid logic does not really apply to investing, it's more a matter of opinion .
You could say hang on to the ones that are doing well in case they continue to do well , Or you could say the opposite that they have done well so maybe time they went down . Nobody knows.
The only sensible bit of advice is that investing in funds is for the long term ( >10 years ) and not for shorter term dipping in and out to get cash.

Alexland

I would suggest selling down the lot and using the money towards something suitable to his current circumstances.

[Deleted User]

Hi,


were these left in a trust for him until 18 and now he is moving on to uni?


If he is going to uni, then cash the lot in, help with his uni expenses, if working, and a decent wage, so not needing the money, then leave them, the longer the better.

jamei305

Depends what they are. "Fairly flat" for 3 years doesn't sound like an equity fund worth holding.

jph29cd

[Deleted User] wrote:

were these left in a trust for him until 18 and now he is moving on to uni?

Yes, that's right. Thank you for the advice.

jph29cd

Albermarle wrote: »

You could say hang on to the ones that are doing well in case they continue to do well , Or you could say the opposite that they have done well so maybe time they went down. Nobody knows.

Yes, that nicely summarises the quandary...
Perhaps he should split the difference and sell some of each?!

Alexland

This really isn't just a fund liquidation problem.

Let's get 'back to basics' thinking about asset allocation.

He is 18 now, an adult, what does he want to do with his money?

If he needs it in the next 5 years (for uni, car, property deposit, etc) then cash is suitable not stocks & shares. If he doesn't need to access until later then S&S may be appropriate but what is his appetite for market volatility? Is he happy to see drops of 25%, 40%, 50%, etc? If he is saving for a property deposit then he could use a Help To Buy ISA or Lifetime ISA (in cash or S&S depending on timeline) for a 25% government bonus.

Alex