When and how to sell investments

Voyager2002

In about six months I will need to make a substantial payment amounting to about 25 per cent of the value of portfolio (split between SIPP, ISA and trading account). Would it be intelligent to start selling now; to postpone selling until the week the payment is due; or some other means of spreading the transactions over time? And the choice of securities: would it be intelligent to sell a little of everything; to liquidate those stocks that have performed best over the last year or three years; to divest myself of any 'dogs'; or some other approach?

Alexland

If you no longer have an investment timeframe then it would make sense to sell now while most markets are still near all time highs. Over short periods a drop could be much larger than the potential upside. Sell whatever is required to get to your target portfolio going forwards.

eskbanker

Perhaps a relatively peripheral issue, depending on the scale of this disinvestment, but for unwrapped assets being sold, you might wish to pay attention to CGT liabilities and in particular optimising sales both before and after early April....

Thrugelmir

Voyager2002 said:

 And the choice of securities: would it be intelligent to sell a little of everything; to liquidate those stocks that have performed best over the last year or three years; to divest myself of any 'dogs'; or some other approach?

Presumably you had a rationale behind buying these investments originally. Does it still hold?  That's the question that needs to be addressed. 

BananaRepublic

Ideally you should be avoiding dogs anyway. As to when to sell, it’s impossible to say. Drip selling could make sense, sell 25% of the total amount required every 6 weeks. Or sell now to at least avoid any futureclosses, knowing you’ll also miss any gains. 

Mickey666

eskbanker said:

Perhaps a relatively peripheral issue, depending on the scale of this disinvestment, but for unwrapped assets being sold, you might wish to pay attention to CGT liabilities and in particular optimising sales both before and after early April....

Yes, and if there is a spouse then consider a transfer before sale to take advantage of two lots of CGT allowance.  Could be worth around £48k CGT-free split across the two tax years in April.

LobsterMemory

There's also the tax treatment of withdrawing funds from the SIPP to consider, especially if it's the first one.

Voyager2002

Thank you for all these thought-provoking comments.

Old_Lifer

I am awaiting the Budget of 3rd March  with some trepidation,   as it may change any plans we may have regarding CGT from April onwards.