SMT Sell now to utilise CGT or wait?

ANGLICANPAT

My original plan was this year,  to  further reduce  my  c13yr grandchilds  SMT fund ,atm in a GA  (and buy global tracker ISA (or maybe something less racy) with money )    utilizing this years cgt allowance .(aiming to have everything in ISA form in short a time as poss to transfer to Fidelity )  -- Folk say dont sell and realize a big  loss but  I have no idea whether SMT will go up , down or die,  and a global fund could also do anything in same time frame, so Im not clear on whether Im right in thinking to just go ahead and take a chance on prices and use up  this years cgt allowance,  or if I should  just hold onto  SMT  in the hope of a recovery and dont worry about the lost allowance for the 21/22.   Is it as Im thinking , just a gamble either way or is there anything  else I should be considering as well  please ?

NoviceInvestor1

Any active fund is a gamble really, you could toss a coin....

masonic

Impossible to say what will give the best outcome, but another option on the table would be to Bed&ISA SMT, then switch to a tracker later. You won't be realising a loss at this time, and might have an opportunity to sell when sentiment is better.

Thrugelmir

Biggest mistake investors often make is to become emotionally attached to investments. Waiting for a share to return to past highs. We all get investment decisions wrong. Learning to accept them and take the hit on the chin, before moving on. Is a skill worth learning. Toughens you up. Just life. 

ANGLICANPAT

Thanks all.  .  Not  troubled about the big hit  , just wanted to be sure there wasnt an angle I hadnt considered/didnt know about  which was less of a gamble than another . 

Audaxer

ANGLICANPAT said:

Thanks all.  .  Not  troubled about the big hit  , just wanted to be sure there wasnt an angle I hadnt considered/didnt know about  which was less of a gamble than another . 

SMT is still up 118% over the past 3 years, so not much of a big hit if you have been invested in it for at least that length of time. However as masonic says a Bed and ISA might be a good idea if you don't want to sell at this time.

Steve182

I'm not overly concerned with selling SMT to optimise CGT right now.

I'm concerned that SMT  SP could halve in the next 3 months thanks to the actions of Mr Putin, or if I sell now it could gain 50% while I hold cash if issues in Europe are resolved.

I should add that I'm more concerned about the wellbeing of several million Ukrainians than the performance of my investment portfolio! 

adindas

NoviceInvestor1 said:

Any active fund is a gamble really, you could toss a coin....

Very bold and misleading statement. If your statement was true then you would not find any active funds survive over a few decades. Why would sensible people want to buy active funds with higher fees but only performing worse then an index fund with less fees ?. Plot both of them during a reasonable amount of time and compare it and see whether you still come up with that conclusion. Here is just one example SMT (blue) vs FTSE 100 (green) over 5 years period.

Any investment in the stock market will involve some level of risk (call it gamble if you want). But for good funds, higher risk will normally come with higher reward. It is up to you to decide your risk attitude. Come back to this thread (say in one year time) and see how SMT will perform.

The fund like SMT contains a lot amount of high growth stocks which are normally not performing well in the bear market, high inflation with high interest rate, high degree of  FUD (fear, uncertainty and doubt) in the market. But when they recover they also recover with multipliers. Just wait until all of this is over (and compare with the performance with the index fund, especially if you only buy this sort of fund during “the significant dip”, to be combined with drip-feeding DCA down) from that point and not blindly buying it at point even at the peak.

This is my result of my SMT by Combining "Timing the Market buy the dip and Drip feeding DCA down)" during the dip. I have set up a limit buy order for 2 shares to be triggered around @GBX1020 e.g the new low.

adindas

Steve182 said:

I'm not overly concerned with selling SMT to optimise CGT right now.

I'm concerned that SMT  SP could halve in the next 3 months thanks to the actions of Mr Putin, or if I sell now it could gain 50% while I hold cash if issues in Europe are resolved.

I should add that I'm more concerned about the well-being of several million Ukrainians than the performance of my investment portfolio! 

If Russia invades Ukraine, most stocks will tank anyway. The exception is probably only stock highly connected to industries like War Machines, Gold, Oil & Gas, Food & Staples

But what are the other alternatives, Bonds, T-Bond, Gilts ? It is a certain money losing strategy considering inflation.

The possibility that Russia will invade Ukraine is probably much lower now

https://www.marketwatch.com/story/u-s-stock-futures-jump-on-report-some-russian-troops-are-heading-back-to-base-11644914890

U.S. stock futures jump as Russia says some troops are heading back to base

https://www.cnbc.com/2022/02/14/stock-market-futures-open-to-close-news.html

Dow futures jump more than 400 points as Russia pulls back some troops from Ukraine border.

NoviceInvestor1

adindas said:

NoviceInvestor1 said:

Any active fund is a gamble really, you could toss a coin....

Very bold and misleading statement. If your statement was true then you would not find any active funds survive over a few decades. Why would sensible people want to buy active funds with higher fees but only performing worse then an index fund with less fees ?. Plot both of them during a reasonable amount of time and compare it and see whether you still come up with that conclusion. Here is just one example SMT (blue) vs FTSE 100 (green) over 5 years period.

Any investment in the stock market will involve some level of risk (call it gamble if you want). But for good funds, higher risk will normally come with higher reward. It is up to you to decide your risk attitude. Come back to this thread (say in one year time) and see how SMT will perform.

The fund like SMT contains a lot amount of high growth stocks which are normally not performing well in the bear market, high inflation with high interest rate, high degree of  FUD (fear, uncertainty and doubt) in the market. But wait until all of this is over (and compare with the performance with the index fund, especially if you only buy this sort of fund during “the significant dip”, to be combined with drip-feeding DCA down) from that point and not blindly buying it at point even at the peak.

This is my result of my SMT by Combining "Timing the Market buy the dip and Drip feeding DCA down)" during the dip. I have set up a limit buy order for 2 shares to be triggered around @GBX1020 e.g the new low.

I don't think it's either bold or misleading whatsoever, it's 100% accurate - any active fund is a bet.

You are betting that the fund is going to outperform the market. The fund is betting that the stocks they buy are going to outperform the market and grow their earnings/valuation quicker than the consensus opinion of all market participants. Fund managers will often be asked about their big bets, people will talk about factor bets (i.e. growth, value, quality etc). Picking SMT is a gamble, in the way any other active fund is a gamble. Not only that but the odds of winning are factually and statistically very low. What aspect of that is misleading? 

You ask the question; Why would sensible people want to buy active funds with higher fees but only performing worse then an index fund with less fees ?

Statistics show that most active funds underperform the index. The answer is those sensible people are betting they can beat the odds. 

By the way are you really using the FTSE 100 as a comparative benchmark for SMT!? Very strange choice. 

Thrugelmir

SMT is itself a FTSE 100 constituent.