Bottled out - taken my gains
Discussion
After a few weeks of dithering, I've lost my bottle this morning and sold all my equity fund holdings. They took a big hit a couple of weeks ago (halved my gains for the year) but have somehow crept back up until last night they had their highest valuation. Put in instructions to sell this am. My funds were highly diversified in sectors and geographies, but my experience of dips is that markets truly are global, sneeze in one location and the whole world catches a cold.
I just feel that a significant correction is around the corner - nothing but bad news about Brexit, global trade wars, unstable government, sterling & yuan taking a hammering, QE being phased out...and yet UK and US markets are very close to all time highs. Last time I felt like this was just before Greece bailout crisis and my (ex) IFA insisted I stayed in - one week later all my holdings were -15% or worse. That was painful when my instincts were to cash out, and then get back in at a lower price.
Even the bond fund managers are telling people not to invest in them, I might dabble in a bit of gold for the first time ever, and I even looked at the NS&I rates this morning! Will be happy to get back into equities when I feel like there's better growth opportunities about.
How's everyone else's sentiments on the markets at the moment? I know the old "time in the market better than timing the market" adage but I've failed to have the courage of my convictions before, and regretted it.
I just feel that a significant correction is around the corner - nothing but bad news about Brexit, global trade wars, unstable government, sterling & yuan taking a hammering, QE being phased out...and yet UK and US markets are very close to all time highs. Last time I felt like this was just before Greece bailout crisis and my (ex) IFA insisted I stayed in - one week later all my holdings were -15% or worse. That was painful when my instincts were to cash out, and then get back in at a lower price.
Even the bond fund managers are telling people not to invest in them, I might dabble in a bit of gold for the first time ever, and I even looked at the NS&I rates this morning! Will be happy to get back into equities when I feel like there's better growth opportunities about.
How's everyone else's sentiments on the markets at the moment? I know the old "time in the market better than timing the market" adage but I've failed to have the courage of my convictions before, and regretted it.
I agree with you entirely. A lot of factors at play at the minute that I see a crunch point coming soon.
I’ve sold U.K. property, sold a lot of equities, leVing only defensive stock in the game. I don’t like being in cash, particularly with interest rates what they are, but I have a lot of concerns with the market, house prices and the U.K. economy in general. My only regret is not buying euros earlier, although I think we may even look back on these times at 1.13 and think they were favourable against Sterling in 12 months time..
I’ve sold U.K. property, sold a lot of equities, leVing only defensive stock in the game. I don’t like being in cash, particularly with interest rates what they are, but I have a lot of concerns with the market, house prices and the U.K. economy in general. My only regret is not buying euros earlier, although I think we may even look back on these times at 1.13 and think they were favourable against Sterling in 12 months time..
I should add I’m also hovering over the sell button daily for the FTSE on a Spreadbet account as I can see a fast drop from these record highs when the state of the economy does not align itself at all in reality with the figures.
U.K. businesses and individuals alike have binged on cheap debt for 10 years and don’t appear to have built anything of value with that debt. For the reasons you outline, I see trouble ahead and no war chest for a debt ridden society (both business and personal) to ride it out.
U.K. businesses and individuals alike have binged on cheap debt for 10 years and don’t appear to have built anything of value with that debt. For the reasons you outline, I see trouble ahead and no war chest for a debt ridden society (both business and personal) to ride it out.
NickCQ said:
At the moment I don’t have a problem holding FTSE 100 as it’s effectivey a short sterling position with some global macro. Famous last words...
To be fair, FTSE100 is a global index in terms of exposure anyway, and proportionality v high in oil and gas anyway. It’s market sentiment that might effect the 100 more than the underlying financial results being effected if the U.K. has a collapse. The 250 on the other hand..xeny said:
Shnozz said:
For the reasons you outline, I see trouble ahead and no war chest for a debt ridden society (both business and personal) to ride it out.
Surely at that point you'd position for another few rounds of QE?Shnozz said:
NickCQ said:
At the moment I don’t have a problem holding FTSE 100 as it’s effectivey a short sterling position with some global macro. Famous last words...
To be fair, FTSE100 is a global index in terms of exposure anyway, and proportionality v high in oil and gas anyway. It’s market sentiment that might effect the 100 more than the underlying financial results being effected if the U.K. has a collapse. The 250 on the other hand..Simpo Two said:
PhilboSE said:
After a few weeks of dithering, I've lost my bottle this morning and sold all my equity fund holdings.
CGT liability or not enough for that to be a factor? (or in ISA?)Yes I do understand the inconsistency of my position; if I'm sure there's a correction coming then I should get out of the ISAs and SIPP as will and buy back in cheaper...I should grow a pair.
PhilboSE said:
Yes I do understand the inconsistency of my position; if I'm sure there's a correction coming then I should get out of the ISAs and SIPP as will and buy back in cheaper...I should grow a pair.
Well all it means is that you've hedged your bets, no bad thing just in case you guessed wrong!xeny said:
Probably I'm doing it wrong, but I've always planned to do transient equity exposure reductions in what's in ISA wrappers rather than a taxable account (right now that only gets sold from to harvest CGT allowance).
What am I missing?
If the mix in his ISA was similar to that in his other stuff then nothing! We just have a mindset that ISAs are precious and mustn't be touched when in fact they're just a bag of stuff you can shuffle about internally.What am I missing?
'Bag of stuff' - investment vehicle, sorry chaps.
Simpo Two said:
PhilboSE said:
Yes I do understand the inconsistency of my position; if I'm sure there's a correction coming then I should get out of the ISAs and SIPP as will and buy back in cheaper...I should grow a pair.
Well all it means is that you've hedged your bets, no bad thing just in case you guessed wrong!xeny said:
Probably I'm doing it wrong, but I've always planned to do transient equity exposure reductions in what's in ISA wrappers rather than a taxable account (right now that only gets sold from to harvest CGT allowance).
What am I missing?
If the mix in his ISA was similar to that in his other stuff then nothing! We just have a mindset that ISAs are precious and mustn't be touched when in fact they're just a bag of stuff you can shuffle about internally.What am I missing?
'Bag of stuff' - investment vehicle, sorry chaps.
Perhaps better to have sold just enough to use available CGT allowances then reduce exposure further within the tax wrapper if that’s what’s trying to be achieved.
As for selling and rebuying - well, statistics do not support your abilty to do that with any great success. I would suggest whatever is done next, one goes into it with a clear strategy; is it a trade or an investment? What is the term? Maximum loss etc
It all sounds a bit emotional/reactive.
There are some worrying indicators out there; not least the narrowing US 2-year and 10-year note spread, but going liquid is a risky strategy in itself.
Edited by DoubleSix on Saturday 21st July 16:38
DoubleSix said:
He’s hedged his bets by selling chargable assets and hanging on to the non-chargeable assets... hmmm.
Whilst this is not my area, if my fag-packet maths is correct he'll be paying somewhere between 10-20% CGT so his ex-investment/s would have to drop that much before he's actually ahead...Simpo Two said:
Whilst this is not my area, if my fag-packet maths is correct he'll be paying somewhere between 10-20% CGT so his ex-investment/s would have to drop that much before he's actually ahead...
Don’t know his specific circumstances (use of spouse allowances, previous losses carried forward etc). But in essence what your saying is factually correct, in that incurring a hefty tax loss is no better than the equivalent investment loss - except the later normal attracts other friction costs on top!DoubleSix said:
....going liquid is a risky strategy in itself.
This is a fundamental point. Yet few people appear to understand that running for safety can be the biggest investment risk of all.- When interest rates (after tax, where applicable) are lower than inflation then holding cash guarantees you will lose money (real value). Not nice.
- Once you're holding cash (and losing money) you eventually have to make a decision to invest again - from a standing start! Leaving the same very difficult questions of what to invest in, and when.
For many people it's safer to be an "investor" (steady, long term) than a "trader" (short term, speculative).
PhilboSE said:
Simpo Two said:
PhilboSE said:
After a few weeks of dithering, I've lost my bottle this morning and sold all my equity fund holdings.
CGT liability or not enough for that to be a factor? (or in ISA?)Yes I do understand the inconsistency of my position; if I'm sure there's a correction coming then I should get out of the ISAs and SIPP as will and buy back in cheaper...I should grow a pair.
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