»

Liquidate entire portfolio until virus is over?

New Post Advanced Search

Coronavirus: The latest from MSE


The MSE team is working extremely hard to keep the info we have about your travel rights, cancellation rights, sick pay (and more) up to date.
The official MSE guides: NEW MSE Coronavirus Guides

NEWSFLASH
FOREIGN OFFICE TRAVEL ADVICE * FURLOUGH UPDATE * MORTGAGE LENDING

Liquidate entire portfolio until virus is over?

edited 3 March at 3:46PM in Savings & Investments
820 replies 87.4K views
EdGasketTheSecondEdGasketTheSecond Forumite
1.9K posts
1,000 Posts Second Anniversary Photogenic Name Dropper
✭✭✭
edited 3 March at 3:46PM in Savings & Investments
Is anyone else contemplating or have ever liquidated all their shareholdings and stayed in cash (or some other non-equity investment) while markets have crashed? I am thinking that this is probably only the beginning of a protracted bear market and we could see values drop by a third from here.
«13456782

Replies

  • ThrugelmirThrugelmir Forumite
    69.5K posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    ✭✭✭✭✭✭
    Sounds as you have a highly correlated portfolio if you are considering liquidating everything. Markets may well fall by a third. Doesn't mean that all shares will. Active management rather passive is better in turbulent markets. Horses for courses as they say. 
    "Markets have been so good for so long. That many investors are trivialising the advantages of actively managing portfolio risk." - Gervais Williams
  • nrsqlnrsql Forumite
    1.9K posts
    Part of the Furniture 1,000 Posts Combo Breaker
    ✭✭✭
    Think you are just saying that the market will fall and you can sell then buy back at a lower price. Quite possible, I did it for the dot com, but because I was worried about how much I had invested so more of a re-balance. Doesn't have to be a large fall to be profitable.
    Problem is - is it too late to sell, when do you buy back? Also markets get manipulated so external pressures can be overridden by central banks or just rumours.
    What would you do with the money? You are saying that the market valuations will fall by more than sterling (if you keep the cash in sterling).
    My portfolios have gone up by more than I could justify so sold a bit to move into other investments but that was just luck. Also they used to be fairly uncorrelated but that doesn't seem to be so much the case now so I'm not sure that diversification is such a panacea. I've moved a lot towards passive although I'm concerned about using them universally.
  • EdGasketTheSecondEdGasketTheSecond Forumite
    1.9K posts
    1,000 Posts Second Anniversary Photogenic Name Dropper
    ✭✭✭
    In the financial crisis FTSE went from 6690 to 3750; I think you will find that drop was 44%. So yes I think we could well see a loss in value of a third from equities this time round.
  • EdGasketTheSecondEdGasketTheSecond Forumite
    1.9K posts
    1,000 Posts Second Anniversary Photogenic Name Dropper
    ✭✭✭
    Sounds as you have a highly correlated portfolio if you are considering liquidating everything. Markets may well fall by a third. Doesn't mean that all shares will. Active management rather passive is better in turbulent markets. Horses for courses as they say. 
    Yes well my idea of 'active management' is to get out of equities now and stay out until the virus has done its dirty work and the carnage can be assessed; assuming I am still alive at the end. Just wondering if anyone else felt the same or had ever done that.

  • ThrugelmirThrugelmir Forumite
    69.5K posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    ✭✭✭✭✭✭
    Sounds as you have a highly correlated portfolio if you are considering liquidating everything. Markets may well fall by a third. Doesn't mean that all shares will. Active management rather passive is better in turbulent markets. Horses for courses as they say. 
    Yes well my idea of 'active management' is to get out of equities now and stay out until the virus has done its dirty work and the carnage can be assessed; assuming I am still alive at the end. Just wondering if anyone else felt the same or had ever done that.

    Do you hold just collective investments? 
    "Markets have been so good for so long. That many investors are trivialising the advantages of actively managing portfolio risk." - Gervais Williams
  • EdGasketTheSecondEdGasketTheSecond Forumite
    1.9K posts
    1,000 Posts Second Anniversary Photogenic Name Dropper
    ✭✭✭
    Equities (or shares) but its a general question so applies if you hold a world tracker fund too or just a few funds. Obviously with individual shares its more costly to liquidate but maybe not as costly as continuing to hold might prove to be.
  • marlotmarlot Forumite
    4.3K posts
    Part of the Furniture 1,000 Posts
    ✭✭✭✭
    Is anyone else contemplating or have ever liquidated all their shareholdings and stayed in cash (or some other non-equity investment) while markets have crashed? I am thinking that this is probably only the beginning of a protracted bear market and we could see values drop by a third from here.
    The Spanish Flu hit the UK in three waves.  It's highly likely that Covid-19 will also hit the UK in waves.  How will you know when you hit the bottom?
Sign In or Register to comment.

Quick links

Essential Money | Who & Where are you? | Work & Benefits | Household and travel | Shopping & Freebies | About MSE | The MoneySavers Arms | Covid-19 & Coronavirus Support