How & when do you stop running your winners?

snookerloopy96

Apologies for the slight hijacking and off tangent question but with regards to 'selling winners' OR indeed looking at future investing what sort of stocks/funds are most likely to be affected by international events?

No doubt this is a hugely open ended question but I'm trying to slowly understand markets bit at a time, I'm far too cautious to ever go into things willy nilly and with immediate lump sums but any info/opinions are appreciated.

Aminatidi

https://forums.moneysavingexpert.com/discussion/comment/81904093#Comment_81904093

Yes it's those kind of "rules" I'm interested in.

For example the Artemis fund is up 26% in 8 months.

And that's a 55/44 multi-asset fund.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81904578#Comment_81904578

I don't see how your example relates to the sort of rule being suggested, which was to rebalance if one specific holding exceeds n% of the investor's overall portfolio?

Aminatidi

I purchased four funds in equal amounts on the same date.

The Artemis fund is up 26% the other three are each up between 14-17%.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81904708#Comment_81904708

So, instead of being 25% of your portfolio, the Artemis one will now be more like 26.5-27%? Up to you if you'd consider that significant, but doubt that such a minor variance would typically drive rebalancing - I could be wrong but imagined that the suggestion was to adjust allocation if a holding went from, say, 5% to 10+%.

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/81904578#Comment_81904578

Towards the end of the accumulation phase I had an approximately 65/35 portfolio made up of 4 funds (40/20/20/20) I would rebalance if any component deviated from their assigned ratio by +/-5%. My only really active phase of rebalancing was in 2007 to 2008

HHarry

It’s all guesswork - you might as well pick an arbitrary number.

I inherited some Fidelity Global Technology back in 2018. I know it’s high risk holding and decided about 2 years ago that when it hit £10 I’d sell an amount equivalent to my original investment (which I’ve now done) so whatever is left is ‘free money’. The price has bounced around the mid £10’s since so it looks like an inspired move - it was luck.

Why £10? No reason. It was a nice round number, it broadly tripled my investment - it was pretty arbitrary.

thunderroad88

https://forums.moneysavingexpert.com/discussion/comment/81904708#Comment_81904708

So these funds have done well over the last 8 months…unless you’re convinced the macro investing environment in which they’ve prospered is going to significantly alter, why shouldn’t they continue to perform? Besides, what would you change to? If they met your reassessed risk tolerance 8 months ago, why wouldn’t they now, given you’ve got a fairly long investing horizon. You’ll just go round in circles again like you did last time.

Now, if you’re suddenly fearful because of current events and want to take some risk off and take some of those gains, then yes, you’ll have to sell some of your winners

redux

https://forums.moneysavingexpert.com/discussion/comment/81904708#Comment_81904708

Since the notch that Trump put in value history graphs, one investment trust invested in well known UK companies is up about 30%, and another is up about 50%

I hold some of the latter in my pension, but a couple of times I've considered recommendations of the other, like two to one years ago when the first was doing a bit better than the second

This shows there aren't any rules and it's impossible to tell in advance. But over longer periods they might average out. Or they might not.

InvesterJones

https://forums.moneysavingexpert.com/discussion/comment/81904096#Comment_81904096

I'd probably start your own thread or look for similar ones. Broadly speaking you can carry out the thought experiment yourself - first what kind of 'international events' are you theorising might happen? (could be war - between who?), tariffs, shadow banking collapse etc. etc.) then consider who/what companies might be affected, then who might be affected by that etc. Then of course consider the ranks of professionals already considering such things and positioning themselves already for it and waiting to make money off people doing such theory-crafting. In the end it's simpler to consider it part of general equity risk, and allocate a portion to other asset types if it concerns you.