Stocks & Shares ISA - Time to Cut my Losses or Sit Tight?

NannaH

I’m definitely not selling and thankfully it’s not our main savings pot,  which is why it’s invested, albeit in supposedly lower risk funds than our pensions.  

The thought of it dropping say 50% is very hard to stomach,  but we have time on our side - the funds do look like they’ve performed less badly than the general 0-35 and 20-60 sectors this year though.  

Albermarle

masonic said:

NannaH said:

Has there ever been a period where, after initial losses on a lump sum, mixed asset funds have failed to recover in a 10 year period?  

It’s looking like I should have held on and stuck my £20k in a fixed term saver at 4%. 

I have RL Sustainable diversifed and RL sustainable managed growth.   They are currently down 21% 😨

Yes, if measured in real terms. The crash of 1973 took a couple of years to bottom out, and for a 60:40 portfolio, the recovery would have taken another 8 years. This was also a period of high inflation, so in nominal terms, the recovery would have come much sooner. Anything less than 60% equities would have recovered sooner in real terms.

Your potential saver at 4% is only going to look good if inflation can be brought under control, and the pound doesn't continue to plummet. There's still everything to play for.

The RL sustainable diversified is an approx 60:40 fund, which is down 17% in 12 months, compared to more typically 10% for a 60:40 fund. ( although over 5 years the RL fund has performed better ) The reason for the big fall seems to be is that the 40% is all UK fixed interest.
The other RL fund is 75% UK fixed interest.
I wonder what the prospect of these recovering in the next few years is ?

NannaH

Why hasn’t the fixed income proportion of the managed growth fund protected it?  

 Am I completely wrong in thinking that by being 75% invested in fixed income meant that because it was fixed, it was a safer option?   

Are people dumping them due to rising interest rates?  

Notepad_Phil

adindas said:

NannaH said:

Has there ever been a period where, after initial losses on a lump sum, mixed asset funds have failed to recover in a 10 year period?  

It’s looking like I should have held on and stuck my £20k in a fixed term saver at 4%. 

I have RL Sustainable diversified and RL sustainable managed growth.   They are currently down 21% 😨

In the past it has happened. Even with a relative good investment such as S&P500, a person could be waiting for over 25+ years before they could see a single penny profit. But they recover thereafter. I have posted this graphics before. This is fact, not opinion.

But that occasion is extremely rare. You must be among the most unfortunate people in investing to ever experience that.

Selling a good investment that has a good potential to return to green when it already fall 21% is not a good idea.  I never read any expert opinion regarding this. People might be selling at a considered loss when there is fundamental change in the investment thesis which might lead to a much higher probability to incur a significantly much heavy losses.

Also just look at the recent COVID-19 March 2020 market crash. There must be a lot of people was down for more than 21%+. But the stock market then recover with a V-Shape recovery in less than a year.

adindas, re your statement "Selling a good investment that has a good potential to return to green when it already fall 21% is not a good idea. ". From your previous belief that DCA is best during a bear market, surely you should be checking whether they would have any CGT issues in selling and provided there were none suggesting that they do sell now and then DCA back in.

I personally would not agree with that, but it is the logical conclusion from your belief.

adindas

Notepad_Phil said:

adindas said:

NannaH said:

Has there ever been a period where, after initial losses on a lump sum, mixed asset funds have failed to recover in a 10 year period?  

It’s looking like I should have held on and stuck my £20k in a fixed term saver at 4%. 

I have RL Sustainable diversified and RL sustainable managed growth.   They are currently down 21% 😨

In the past it has happened. Even with a relative good investment such as S&P500, a person could be waiting for over 25+ years before they could see a single penny profit. But they recover thereafter. I have posted this graphics before. This is fact, not opinion.

But that occasion is extremely rare. You must be among the most unfortunate people in investing to ever experience that.

Selling a good investment that has a good potential to return to green when it already fall 21% is not a good idea.  I never read any expert opinion regarding this. People might be selling at a considered loss when there is fundamental change in the investment thesis which might lead to a much higher probability to incur a significantly much heavy losses.

Also just look at the recent COVID-19 March 2020 market crash. There must be a lot of people was down for more than 21%+. But the stock market then recover with a V-Shape recovery in less than a year.

adindas, re your statement "Selling a good investment that has a good potential to return to green when it already fall 21% is not a good idea. ". From your previous belief that DCA is best during a bear market, surely you should be checking whether they would have any CGT issues in selling and provided there were none suggesting that they do sell now and then DCA back in.

I personally would not agree with that, but it is the logical conclusion from your belief.

Tax is not in the discussion. I fully agree with you where there is a tax implication of doing that but this is subject to another discussion as every person will have different tax profile.

Notepad_Phil

adindas said:

Notepad_Phil said:

adindas said:

NannaH said:

Has there ever been a period where, after initial losses on a lump sum, mixed asset funds have failed to recover in a 10 year period?  

It’s looking like I should have held on and stuck my £20k in a fixed term saver at 4%. 

I have RL Sustainable diversified and RL sustainable managed growth.   They are currently down 21% 😨

In the past it has happened. Even with a relative good investment such as S&P500, a person could be waiting for over 25+ years before they could see a single penny profit. But they recover thereafter. I have posted this graphics before. This is fact, not opinion.

But that occasion is extremely rare. You must be among the most unfortunate people in investing to ever experience that.

Selling a good investment that has a good potential to return to green when it already fall 21% is not a good idea.  I never read any expert opinion regarding this. People might be selling at a considered loss when there is fundamental change in the investment thesis which might lead to a much higher probability to incur a significantly much heavy losses.

Also just look at the recent COVID-19 March 2020 market crash. There must be a lot of people was down for more than 21%+. But the stock market then recover with a V-Shape recovery in less than a year.

adindas, re your statement "Selling a good investment that has a good potential to return to green when it already fall 21% is not a good idea. ". From your previous belief that DCA is best during a bear market, surely you should be checking whether they would have any CGT issues in selling and provided there were none suggesting that they do sell now and then DCA back in.

I personally would not agree with that, but it is the logical conclusion from your belief.

Tax is not in the discussion. I fully agree with you where there is a tax implication of doing that but this is subject to another discussion as every person will have different tax profile.

You've missed my point. You say that DCA is best during a bear market, so why did you not tell them to sell the investment now and rebuy using DCA? It's the logical conclusion of your belief as we're in a bear market.

adindas

Notepad_Phil said:

adindas said:

Notepad_Phil said:

adindas said:

NannaH said:

Has there ever been a period where, after initial losses on a lump sum, mixed asset funds have failed to recover in a 10 year period?  

It’s looking like I should have held on and stuck my £20k in a fixed term saver at 4%. 

I have RL Sustainable diversified and RL sustainable managed growth.   They are currently down 21% 😨

In the past it has happened. Even with a relative good investment such as S&P500, a person could be waiting for over 25+ years before they could see a single penny profit. But they recover thereafter. I have posted this graphics before. This is fact, not opinion.

But that occasion is extremely rare. You must be among the most unfortunate people in investing to ever experience that.

Selling a good investment that has a good potential to return to green when it already fall 21% is not a good idea.  I never read any expert opinion regarding this. People might be selling at a considered loss when there is fundamental change in the investment thesis which might lead to a much higher probability to incur a significantly much heavy losses.

Also just look at the recent COVID-19 March 2020 market crash. There must be a lot of people was down for more than 21%+. But the stock market then recover with a V-Shape recovery in less than a year.

adindas, re your statement "Selling a good investment that has a good potential to return to green when it already fall 21% is not a good idea. ". From your previous belief that DCA is best during a bear market, surely you should be checking whether they would have any CGT issues in selling and provided there were none suggesting that they do sell now and then DCA back in.

I personally would not agree with that, but it is the logical conclusion from your belief.

Tax is not in the discussion. I fully agree with you where there is a tax implication of doing that but this is subject to another discussion as every person will have different tax profile.

You've missed my point. You say that DCA is best during a bear market, so why did you not tell them to sell the investment now and rebuy using DCA? It's the logical conclusion of your belief as we're in a bear market.

reread what I am writing. Selling at 21% loss ?? I am not following your logic, sorry.

Notepad_Phil

adindas said:

Notepad_Phil said:

adindas said:

Notepad_Phil said:

adindas said:

NannaH said:

Has there ever been a period where, after initial losses on a lump sum, mixed asset funds have failed to recover in a 10 year period?  

It’s looking like I should have held on and stuck my £20k in a fixed term saver at 4%. 

I have RL Sustainable diversified and RL sustainable managed growth.   They are currently down 21% 😨

In the past it has happened. Even with a relative good investment such as S&P500, a person could be waiting for over 25+ years before they could see a single penny profit. But they recover thereafter. I have posted this graphics before. This is fact, not opinion.

But that occasion is extremely rare. You must be among the most unfortunate people in investing to ever experience that.

Selling a good investment that has a good potential to return to green when it already fall 21% is not a good idea.  I never read any expert opinion regarding this. People might be selling at a considered loss when there is fundamental change in the investment thesis which might lead to a much higher probability to incur a significantly much heavy losses.

Also just look at the recent COVID-19 March 2020 market crash. There must be a lot of people was down for more than 21%+. But the stock market then recover with a V-Shape recovery in less than a year.

adindas, re your statement "Selling a good investment that has a good potential to return to green when it already fall 21% is not a good idea. ". From your previous belief that DCA is best during a bear market, surely you should be checking whether they would have any CGT issues in selling and provided there were none suggesting that they do sell now and then DCA back in.

I personally would not agree with that, but it is the logical conclusion from your belief.

Tax is not in the discussion. I fully agree with you where there is a tax implication of doing that but this is subject to another discussion as every person will have different tax profile.

You've missed my point. You say that DCA is best during a bear market, so why did you not tell them to sell the investment now and rebuy using DCA? It's the logical conclusion of your belief as we're in a bear market.

reread what I am writing. Selling at 21% loss ?? I am not following your logic, sorry.

In that case I'm afraid it's your logic that you are not following.

You have previously said that we are in a bear market so DCA is best and will beat a lump sum investment. So suppose someone had a fund that is currently  worth £1,000 and had fallen amongst everything else. Surely you would suggest that they should sell that investment to get the £1,000 and then invest the £1,000 using DCA. According to you this would beat just putting the £1,000 back into the investment as a lump sum investment. Selling and immediately buying back into the same fund as a lump sum is essentially the same as just holding the fund, so you are not following your belief that DCA is best in a bear market.

Note, I realise that not everybody who sells a £1,000 investment will get £1,000 because of market moves, but there'll be just about the same number who'll get more than will get less and on average you would get the £1,000 (assuming zero selling costs and equal buy/sell pricing).

I will also reiterate that I personally would not agree with doing this, but it is the logical conclusion from your belief.

Albermarle

NannaH said:

Why hasn’t the fixed income proportion of the managed growth fund protected it?  

 Am I completely wrong in thinking that by being 75% invested in fixed income meant that because it was fixed, it was a safer option?   

Are people dumping them due to rising interest rates?  

All bonds/gilts etc have had a torrid time so far this year. They do not like rising interest rates and inflation. The interest is fixed but the price of the bond is not.
There have been a number of posters saying my pension is in low risk funds but has still gone down 25% etc

adindas

Notepad_Phil said:

adindas said:

Notepad_Phil said:

adindas said:

Notepad_Phil said:

adindas said:

NannaH said:

Has there ever been a period where, after initial losses on a lump sum, mixed asset funds have failed to recover in a 10 year period?  

It’s looking like I should have held on and stuck my £20k in a fixed term saver at 4%. 

I have RL Sustainable diversified and RL sustainable managed growth.   They are currently down 21% 😨

In the past it has happened. Even with a relative good investment such as S&P500, a person could be waiting for over 25+ years before they could see a single penny profit. But they recover thereafter. I have posted this graphics before. This is fact, not opinion.

But that occasion is extremely rare. You must be among the most unfortunate people in investing to ever experience that.

Selling a good investment that has a good potential to return to green when it already fall 21% is not a good idea.  I never read any expert opinion regarding this. People might be selling at a considered loss when there is fundamental change in the investment thesis which might lead to a much higher probability to incur a significantly much heavy losses.

Also just look at the recent COVID-19 March 2020 market crash. There must be a lot of people was down for more than 21%+. But the stock market then recover with a V-Shape recovery in less than a year.

adindas, re your statement "Selling a good investment that has a good potential to return to green when it already fall 21% is not a good idea. ". From your previous belief that DCA is best during a bear market, surely you should be checking whether they would have any CGT issues in selling and provided there were none suggesting that they do sell now and then DCA back in.

I personally would not agree with that, but it is the logical conclusion from your belief.

Tax is not in the discussion. I fully agree with you where there is a tax implication of doing that but this is subject to another discussion as every person will have different tax profile.

You've missed my point. You say that DCA is best during a bear market, so why did you not tell them to sell the investment now and rebuy using DCA? It's the logical conclusion of your belief as we're in a bear market.

reread what I am writing. Selling at 21% loss ?? I am not following your logic, sorry.

In that case I'm afraid it's your logic that you are not following.

You have previously said that we are in a bear market so DCA is best and will beat a lump sum investment. So suppose someone had a fund that is currently  worth £1,000 and had fallen amongst everything else. Surely you would suggest that they should sell that investment to get the £1,000 and then invest the £1,000 using DCA. According to you this would beat just putting the £1,000 back into the investment as a lump sum investment. Selling and immediately buying back into the same fund as a lump sum is essentially the same as just holding the fund, so you are not following your belief that DCA is best in a bear market.

Note, I realise that not everybody who sells a £1,000 investment will get £1,000 because of market moves, but there'll be just about the same number who'll get more than will get less and on average you would get the £1,000 (assuming zero selling costs and equal buy/sell pricing).

I will also reiterate that I personally would not agree with doing this, but it is the logical conclusion from your belief.

Say you have £100k, and selling it with 21% loss, That is £21k loss representing 21%

If you have the option:

1. You lose your £21k by selling it now and you crystallise your loss. £21k has already gone and never come back.

2. Stay investing, You might still lose a little bit part of your £21k, but the odd / probability is on your favour. You have a very good chance to make profit by stay investing. When the catalyst come, the root cause of the bear market start to disappear the movement is very steep, you miss the best days in the stock market.

I fully believe many people know what to choose.

The one you mention about is just talking about the £79k does not take into consideration the £21k you have lost on the equation and never come back. Is it not clear !!!

It is entirely a different thing when it is a new money or you have made a break-even.