Sold 50% of portfolio at the bottom, want to reinvest but how?

bostonerimus

Sorcerer2018 said:

Prism said:

Sorcerer2018 said:

I would say before you put any more money in the market, you have a good long think about that you are trying to do. Their was no need to sell unless you believed the companies where going bust or the dividends was disappearing for ever. Since you are on the FIRE strategy. I started on the FIRE cause 10 years ago, and next year all being equal, my dividends will overtake my wages for income.

Even is the dividends do disappear or reduce it shouldn't matter - plan on total return and sell units to make up the difference.

That certainly is one way to go, and the old 4% rule is something i know some people do, but i prefer to take the natural income from my investments. 

IMO the ideal retirement income situation is to have a number of income sources and to have your spending such that you don't need them all to cover your expenses. The traditional income sources were a company pension and a state pension. Obviously company pensions are becoming rarer and have been replaced by personal investments, but it's nice to reinforce them with annuities or rental income. Also if you can go into retirement debt and mortgage free it really takes the strain of your need to generate income.

Sorcerer2018

bostonerimus said:

IMO the ideal retirement income situation is to have a number of income sources and to have your spending such that you don't need them all to cover your expenses. The traditional income sources were a company pension and a state pension. Obviously company pensions are becoming rarer so alternatives are annuities or rental income. Also if you can go into retirement debt and mortgage free it really takes the strain of your need to generate income.

It's a fair point but I would like to retire before I am 50, so i won't be getting my pensions for a while. But when i get to those points they will ease the pressure on the income needed from dividends, bringing in more much needed income. I am also planning on having a large cash reserves to deal with bad years, replenished in good years.

Sorcerer2018

bostonerimus said:

IMO the ideal retirement income situation is to have a number of income sources and to have your spending such that you don't need them all to cover your expenses. The traditional income sources were a company pension and a state pension. Obviously company pensions are becoming rarer so alternatives are annuities or rental income. Also if you can go into retirement debt and mortgage free it really takes the strain of your need to generate income.

And yes i wouldn't go into this with any major debt, mortgage is paid off, only debt is my rental car, going back in a couple of years, and I will buy a cheap run-around when i retire, since it's won't get a lot of use. Only bills will be gas/elec, council tax, food, clothes and some play money. Emergency's taken care of within the emergency cash reserves.

Prism

Sorcerer2018 said:

Thrugelmir said:

Sorcerer2018 said:

Since you are on the FIRE strategy. I started on the FIRE cause 10 years ago, and next year all being equal, my dividends will overtake my wages for income.

What are you backing to generate a stable dividend income ? 

i have a large portfolio of investment trusts, many of which have cash reserves to smooth out dividends, this off course is not guarantee but only 2 out of 37 trusts have stopped their dividends so far (hopefully temporarily).

It can make it feel like that but many do not hold those reserves in cash but in investments. They need to sell to pay the dividends if their own source of dividends decreases - which is basically is the same as you could do yourself. It does make it easier though, getting the trust to decide the best thing to sell.

mooneysaver

OpalMiner11 said:

Hi all,
I made the stupid mistake of selling half of my portfolio in the middle of March (stupid mistake and I hope to not repeat it again!).
The market has since risen 15% and I don't need the money since it was for FIRE. What is the general consensus regarding putting it back?
Should I just lump it back in and wear the 15% hit, DCA slowly over the next months or wait a bit longer to see what happens?
Cheers

I asked pretty much this exact question about a week ago. The general consensus was to buy gold now and hold until the stock market crashes in mid-September and then switch back to equities HTH.

_pete_

I must admit, l was similar to OpalMiner11 in that I was tempted to sell my funds a few months ago whilst there was still enough value in them to pay off my mortgage.  I feared that if they lost all their value I would be in danger of losing my home.  What prevented me from doing so was remembering the advice I've seen often seen on this forum, namely:
(1) never sell during a crash - the market has always recovered in the past;
(2) if the markets really were going to lose all their value, that would be the end of capitalism (and in my fevered imagination at the time) the end of civilisation.  Which meant banks would probably not be in a position to attempt the repossession of hundreds of thousands of properties.
It turns out that, my multi asset funds behaved exactly as one would expect and are looking much healthier now.  Of course, they may well go down again at any point - and we are definitely on our way to the next crash, whenever that may be.
I think this has taught me that I'm invested just about at the right level of risk for me - I was sufficiently frightened to contemplated selling my funds, but didn't actually do so.

Prism

mooneysaver said:

OpalMiner11 said:

Hi all,
I made the stupid mistake of selling half of my portfolio in the middle of March (stupid mistake and I hope to not repeat it again!).
The market has since risen 15% and I don't need the money since it was for FIRE. What is the general consensus regarding putting it back?
Should I just lump it back in and wear the 15% hit, DCA slowly over the next months or wait a bit longer to see what happens?
Cheers

I asked pretty much this exact question about a week ago. The general consensus was to buy gold now and hold until the stock market crashes in mid-September and then switch back to equities HTH.

I think you will find that it wasn't at all.

2unlimited91

mooneysaver said:

I asked pretty much this exact question about a week ago. The general consensus was to buy gold now and hold until the stock market crashes in mid-September and then switch back to equities HTH.

Thrugelmir

Sorcerer2018 said:

Thrugelmir said:

Sorcerer2018 said:

Since you are on the FIRE strategy. I started on the FIRE cause 10 years ago, and next year all being equal, my dividends will overtake my wages for income.

What are you backing to generate a stable dividend income ? 

i have a large portfolio of investment trusts, many of which have cash reserves to smooth out dividends, this off course is not guarantee but only 2 out of 37 trusts have stopped their dividends so far (hopefully temporarily).

Many IT's hold their reserves in investments not cash. As cash generates no income for them. IT's use current cash coming in to cover dividends out.  The problem for the IT's is the level of dividend cancellations. Both in the UK and overseas. Companies drawing on Government support funding are banned from paying dividends or undertaking share buybacks until the debt is repaid. 

OpalMiner11

Thank you very much to everyone for their input. It's clear that I need to make a plan and stick to it - be that investing once it reaches a certain level, or committing to investing over the next 6 months etc.