A drawback with Investment Trusts

ffacoffipawb

Thought I would try selling some ITs in my SIPP as I am getting a bit scared.

No online quote available to sell any of them. I tried each one in turn. Scary times when you are caught like this and can do nothing about it.

LobsterMemory

They're just shares aren't they so wouldn't have thought this would be specific to Investment Trusts

Have you tried a dummy buy to see if you get a quote?

ffacoffipawb

LobsterMemory said:

They're just shares aren't they so wouldn't have thought this would be specific to Investment Trusts

Have you tried a dummy buy to see if you get a quote?

Yes, able to buy. But i wont.

bowlhead99

Just call your broker and ask them to place a trade, and if they can't give you a guaranteed price to accept you can just tell them to sell at market best price. Just like with any stock, if there is not huge liquidity from people wanting to buy (which can be the case for example first thing in the morning on a day when everything is down), you may not be able to get a firm quote online.

I have made various sales in recent weeks and quite a few didn't go through first time but were successful after a few attempts and only on a couple of occasions did I bother to call.  There were also some trades I had left a limit order to sell a portion of the stock the night before, but was able to sell manually online before they had got round to executing them, and then cancel the limit orders.

It can depend on how much you are trying to sell, as the published bid-offer spread for stocks is only relevant to 'normal market size' for a stock (which is formulaeic and based on periodic trading volume), and just because someone is on the bid for 2000 shares does not mean that loads of other people are not also trying to sell to that market-maker at that price. The old-fashioned way of getting a price or indicative price from a stockbroker over the phone and work an order if a firm price is not available, is more reliable than sitting at the end of the internet clicking and being told 'no firm price available'. 

If you don't like the telephone you could always just leave a limit order with a limit significantly lower than the current expected price ; when you get to the front of the queue it will be executed and the broker owes you a duty of 'best execution' so just because you give them a limit of £1 will not mean they will sell if for only £1 if the market is at £10.

LobsterMemory

Following a mega-scientific study of getting quotes for an IT, a FTSE 100 share and a tiddler share, only the IT wasn't available
So, yes, must be a bit scary for you

Thrugelmir

In volatile markets market makers will withdraw from quoting prices. As they'll be looking to clear the overhang of stock they are holding. 
Not unique to IT's any traded security could be the same. 

ffacoffipawb

Just sold all my ETFs in my dealing account for a 25% hit. Now I have doubled my cash and now have enough cash to cover 4 years income now. £54k investment realised for £40k. Only bought last October. Oh well, I can leave my ISA and SIPP to recover. Misjudged my risk appetite but this is now silly.

EDIT £20k back into ISA come April.

bowlhead99

In one sense, a 25% hit is bad. However, when you bought the ETFs you knew they could halve in value or worse, but didn't think it would matter as you would hold for the long term and rebalance etc etc as we are all told we should do. So looking on the bright side, imagine if you had held on until they were 45-50% down and then decided you couldn't take any more of the reality of equity investment volatility and then sold at that point instead. It would have been another year's worth of cash thrown in the bin. If you realise something too late, at least you still realise it.

Going back on the 'markets minor correction' thread I see you mentioned on 25 Feb you had 'just bought a small amount of Royal Dutch Shell at 8% yield'. The same evening, you posted 'this week isn't great but can't do anything now', but a couple of hours later mentioned 'I dread to think what the Dow would do if just one American caught the virus.'

So, since then , RDS B fell around a further third, from around £17.80 to £11.80, and the Dow about a further fifth from 27000 that evening to under 22000 now.   There are lessons to be learned all over the place here, and although it seems very rude to pick on someone and use them as an example of what not to do...

• don't buy some stock because it looks nice based on historic profits against current price - it means the market doesn't think the company is as good as you think it is;
• don't buy investments which can provide very high level of volatility primarily on the basis of cost (low fee tracker) and potential good gains (100% equity or high yield bonds) if you have any doubts about whether you can handle the risk;
• if you see small falls and are nervous about your portfolio, don't let people tell you 'hold on tight you are in this for the long term' if you are not entirely comfortable with it. In this case you were concerned about what would happen if the market situation worsened, but convinced yourself it was too late to do anything about it. You were right that it is always too late to wind back the clock to before you made some losses. But it is never too late to reassess what would be an appropriate portfolio to hold going forward given what could go wrong.  Congrats for selling out now.

Bravado on the forums while trembling a little underneath does not do anybody any good, as nobody here actually has a vested interest in your portfolio performance except yourself.

ffacoffipawb

bowlhead99 said:

In one sense, a 25% hit is bad. However, when you bought the ETFs you knew they could halve in value or worse, but didn't think it would matter as you would hold for the long term and rebalance etc etc as we are all told we should do. So looking on the bright side, imagine if you had held on until they were 45-50% down and then decided you couldn't take any more of the reality of equity investment volatility and then sold at that point instead. It would have been another year's worth of cash thrown in the bin. If you realise something too late, at least you still realise it.

Going back on the 'markets minor correction' thread I see you mentioned on 25 Feb you had 'just bought a small amount of Royal Dutch Shell at 8% yield'. The same evening, you posted 'this week isn't great but can't do anything now', but a couple of hours later mentioned 'I dread to think what the Dow would do if just one American caught the virus.'

So, since then , RDS B fell around a further third, from around £17.80 to £11.80, and the Dow about a further fifth from 27000 that evening to under 22000 now.   There are lessons to be learned all over the place here, and although it seems very rude to pick on someone and use them as an example of what not to do...

• don't buy some stock because it looks nice based on historic profits against current price - it means the market doesn't think the company is as good as you think it is;
• don't buy investments which can provide very high level of volatility primarily on the basis of cost (low fee tracker) and potential good gains (100% equity or high yield bonds) if you have any doubts about whether you can handle the risk;
• if you see small falls and are nervous about your portfolio, don't let people tell you 'hold on tight you are in this for the long term' if you are not entirely comfortable with it. In this case you were concerned about what would happen if the market situation worsened, but convinced yourself it was too late to do anything about it. You were right that it is always too late to wind back the clock to before you made some losses. But it is never too late to reassess what would be an appropriate portfolio to hold going forward given what could go wrong.  Congrats for selling out now.

Bravado on the forums while trembling a little underneath does not do anybody any good, as nobody here actually has a vested interest in your portfolio performance except yourself.

My ISA and SIPP are still fully invested. The cash from these sales will enable me to reduce the SIPP drawdown a bit more so that the cash accumulates from the dividends in there.

I do feel a bit silly as I was considering selling in January, but it would have gone into cash paying very little within a SIPP..

Anyway I now have enough cash for 4 years and I hopefully still have enough to last me out. But you never know in these markets.

Very scary times indeed.

NedS

I've been doing the opposite of you. I sold my IT's late last year and have been sat on cash waiting for an opportunity. I've started buying back in, in hindsight, far too early and have lost a chunk of change on my initial purchases, but I'm sticking to my plan and will continue to add all the way down. Once the cash is all invested, I will have no choice but to strap in for the ride if things drop further taking solace from the dividends along the way. I'd like to retire in around 6 years so I'm hoping markets are back to previous levels by then, although I have some flexibility.

I've had no issues getting quotes on HL for the IT I've been purchasing (it is a fairly large IT with liquid investments), and did get a few sell quotes along the way, but I have seen times in the past when extreme volatility has prevented quotes or caused the online system to go into meltdown (I remember that on the morning of the Fed taper tantrum in 2013).

cloud_dog

Struggled with Fidelity to get a FCIT quote but, got one eventually.