Deciding when to sell a losing fund

Peter.Siffredi

Hi,
 Around 8 months ago, I invested £10K into a Baille Gifford fund (global discovery accumulation). I picked the fund due to good past performance, the fund sector, the top 10 holdings and information I could find on the managers and fund rating looked good/OK. 

The fund has had one of it's worst performances on record over the last  year (down 20%). I'm torn whether to leave the funds in or simply sell out now - currently I've set a price target of £19 before selling (it's currently at £22).

 I'm after some advice/opinions on what others do when they're holding a losing stock or index.

Thanks, 
Peter

MEM62

Sell and all you do is crystalise your losses - a rookie mistake.  8 Months is a short time to hold an investment - you should be looking much longer-term.  

Retireby40

Stock doesn't always go up. Some years yes. Some years no. But over a long period of time 5-10 years things should even out and if it is a good investment you should see some profit.

When you invested, did you plan on taking the money out after 8 months?

If it was sitting at +20% would you withdraw it?

Like I posted in another thread. Patience is the key. What your stock looks like today and in 10 years could be 2 very different things.

london21

Investing is a long term game.
8 months is short.
What were your objectives when you started, has it changed?
Although past performance do not always determine future performance.

I have a number of funds, only Baillie Gifford managed fund is in the red but not selling will ride it out.

Audaxer

I don't know the fund, but had a quick look and it is a high risk fund gaining 76% in 2020, so it is going to be volatile. The Annualised Returns over 10 years is over 19% which is pretty good. I personally wouldn't sell and chrystallise my losses unless there is some reason for you to believe it won't recover. I'm thinking more along the lines of it might be a good time to buy.

Peter.Siffredi

Thanks - all valid points! You're right I should think longer term :-).

I guess one of the main differences for me is that with an individual stock, you can look at company\business performance and make a "relatively" good assumption about future prospects, but for an index, it's a lot harder.

grumiofoundation

Peter.Siffredi said:

Hi,
 Around 8 months ago, I invested £10K into a Baille Gifford fund (global discovery accumulation). I picked the fund due to good past performance, the fund sector, the top 10 holdings and information I could find on the managers and fund rating looked good/OK. 

The fund has had one of it's worst performances on record over the last  year (down 20%). I'm torn whether to leave the funds in or simply sell out now - currently I've set a price target of £19 before selling (it's currently at £22).

 I'm after some advice/opinions on what others do when they're holding a losing stock or index.

Thanks, 
Peter

What would you do with the money if/when you do sell? 

Audaxer

Peter.Siffredi said:

Thanks - all valid points! You're right I should think longer term :-).

I guess one of the main differences for me is that with an individual stock, you can look at company\business performance and make a "relatively" good assumption about future prospects, but for an index, it's a lot harder.

If I had bought an individual stock and it had lost 20% in 8 months I would be worried, but much less so with a well-diversified fund or IT.

grumiofoundation

Peter.Siffredi said:

Thanks - all valid points! You're right I should think longer term :-).

I guess one of the main differences for me is that with an individual stock, you can look at company\business performance and make a "relatively" good assumption about future prospects, but for an index, it's a lot harder.

BG global discovery is not an index fund (and is not aiming to track an index)

maxsteam

Imho, the time to sell is around the time that you decided to call it a "losing fund". Markets fell in March 2021. If you bought almost any fund in April, May or June, after that fall, you should be looking at a profit now. It's got to be your decision but I think that by labelling the fund "losing" you have made the decision.

london21

Ah yours is different to mine.

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/b/baillie-gifford-global-discovery-class-b-accumulation