When is the best time to sell?

Audaxer

ARH_2 said:

I want access to some of my money tied up in Vanguard LS100 for renovations next year, so should I start 'drip-selling'? Or should I go with the 'things are looking good right now after all this vaccine news', so I should sell the lot right now?

If you need to withdraw a significant percentage of your fund for the renovations I would withdraw it now. As most funds have now recovered from the Covid crash and values are high, why wait and risk having to sell low if another crash/correction happens next year?

MK62

There is a reasonable (and not too in depth/technical) piece on drip feeding, or pound cost averaging, here

https://adviser.royallondon.com/pensions/viewpoint/investment/2020/may/pound-cost-averaging/

The bottom line is that from any given point in time, going forward, there is simply no way to know which approach will result in the highest, or, just as importantly, the lowest, returns.

steampowered

Statistically, over a 1 year timescale, a 100% equity investment has about a 28% chance of making a loss, and a 72% chance of making a gain. 

If you need most of this money to pay for renovations, then you are not able to bear the risk of a significant market drop between now and next year, so you should consider selling your investment now. 

If you only need a small portion of this money to pay for renovations, then you are able to bear the risk of a market drop, so it would make sense to remain invested until the money is required. Since you are statistically more likely to make a profit than you are to make a loss.

MK62

steampowered said:

Statistically, over a 1 year timescale, a 100% equity investment has about a 28% chance of making a loss, and a 32% chance of making a gain.

Possible typo - should that 32% not be 72%?

eskbanker

MK62 said:

steampowered said:

Statistically, over a 1 year timescale, a 100% equity investment has about a 28% chance of making a loss, and a 32% chance of making a gain.

Possible typo - should that 32% not be 72%?

It does seem something of a long shot that the odds of remaining exactly flat would be 40%!

steampowered

MK62 said:

steampowered said:

Statistically, over a 1 year timescale, a 100% equity investment has about a 28% chance of making a loss, and a 32% chance of making a gain.

Possible typo - should that 32% not be 72%?

Correct - thank you for spotting.

Thrugelmir

Audaxer said:

ARH_2 said:

I want access to some of my money tied up in Vanguard LS100 for renovations next year, so should I start 'drip-selling'? Or should I go with the 'things are looking good right now after all this vaccine news', so I should sell the lot right now?

If you need to withdraw a significant percentage of your fund for the renovations I would withdraw it now. As most funds have now recovered from the Covid crash and values are high, why wait and risk having to sell low if another crash/correction happens next year?

Markets may recovered. As cash goes in search of a positive return. Underlying economies are still running on a mixture of life support, deferral and forbearance.  

[Deleted User]

Best time to sell is never. 
Second best's as late as possible.

DiggerUK

If you can answer yes to the following you should consider selling now.

If you sell now will you be up on the deal. Are you definitely going ahead with  your plans. Can you fit the cash in your Premium Bond a/c..._

EdGasketTheSecond

You never make a loss by taking a profit.