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TJL
Posted: 10 February 2012 18:54:38(UTC)
#1

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I read once that it is never a bad time to take profits.
I have made loads of paper profit so far this year.
I am beginning to feel like I should bank some of these profits - not based on anything scientific, just feels like it might be the right thing to do and I don't often take money out.
What do others think?
I see on Trustnet today there are two articles side by side, one entitled 'Investors haven't missed the boat' and the other 'Dramatic correction due' - so the future is obviously as clear as mud, as normal.
Opinions gratefully recieved.
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banjofred
Posted: 11 February 2012 06:41:23(UTC)
#2

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They say ALWAYS take the profits, and I am sure we have all learned the hard way on that subject.

I would go beyond there and add cut out losers.

If you return to cash you are safe if (when) the market falls and robs you of your profits.

The only thing you lose is the potential for dividends, the selling and re-buying costs, and the possibility that the fund or share will rocket and leave you behind. You might miss a recovery

They say you have to stay in the market to benefit from its recover periods, but they they say a lot - all of it aimed at keeping your bets on the table.

I have seen funds (for example JPM natural resources,Std Life UK equity, gold funds etc) showing a lot of money in the blue, but now showing me 10% - 15% loss)

Take the profit, or at least take some profit. Which of your investments are likely to go down the plughole in the next correction?? Probably your biggest earners are the most risky.

We are all in the same boat right now watching the growth of recent weeks. Would any sane person think this can continue?

I have moved heavily into cash, but still have funds on the table. The monkey on my back is now saying keep them and buy more, and i did buy two this week due to the lure of the figures in blue

Then all went red yesterday as a little reminder of how fragile it all is.
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2 users thanked banjofred for this post.
TJL on 11/02/2012(UTC), Hilary hames on 13/02/2012(UTC)
malcolm roberts
Posted: 12 February 2012 14:28:40(UTC)
#3

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As far as advisors and market traders go its about performance and earning a wage.
Traders are never going to downgrade thier products, they will smooth everything over to get investment.
The market is in turmoil so I would go with looking for individuals looking for investment, that way you have a eliment of control over what return you receive.
Look for individuals giving full disclosure, you will be surprised what is out there.
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1 user thanked malcolm roberts for this post.
TJL on 12/02/2012(UTC)
John Osborne
Posted: 13 February 2012 09:48:45(UTC)
#4

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TJL
If you have done well this year then it is better than most of us in these difficult times and you should have confidence in your own judgement and research.
Difficult to forecast recoveries, and I find if I am in cash the stock I sell nearly always recovers, so I now avoid chopping and changing and stay invested in as wide spread of good quality stocks and funds as possible, staying away from economically sensitive or obscure areas like retail, banks etc.. If we had believed the pundits then we would be in armageddon by now.
If Greece defaults there would be a crash in EU banks and other stocks in sympathy, but then possibly relief everywhere else that some progress was at last being made.
I always ignore fund management hype, they are mostly interested in the commission. Particularly when they come out with ridiculous statements like "pockets of growth", "running naked", or worse still make a virtue out of countercyclical investment in bankrupt companies with bad business models.
I have held Jupiter East Eu Opps fund for some time. Am not selling at present as sitting on gain of nearly 100% and am not following the overall short-term pessimism, Putin has to revive growth in Russia and fund in other high growth areas.
But I admit I have more cash than usual, counting gold about 5%, am thinking nevertheless it should have been 20%. Everything with the benefit of hindsight.
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Dave Duffy
Posted: 13 February 2012 10:25:20(UTC)
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TJL

I would also take at least half of the profits, it is really hard to tell whether markets are going to bust through the resistance levels we are at right now and that will form a new support, or maybe they take a correction. It is all a game of chance, but I cashed in 75% of my portfolio in late January, ok I missed out on 2% growth since then but I am happy enough with 16% gained in 13 months. It is a sickening= feeling to watch your profits disappear but also it ain't easy to watch your recently sold investments gain in price.

You can always phase in your reinvestments (not necessarily a fixed direct debit, but try to buy when what you hope to be good opportunities occur) In this period of uncertainty I will be happy to take 3% on my deposit account until later on in the year.
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Matthew Charles Flinders
Posted: 13 February 2012 12:19:56(UTC)
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IMO the rally is still going strong, and on the further positive economical/political news i expect we will see the FTSE rally over the 6000 mark soon! From then i'd look to take profits and/or switch around stocks/funds.

If you can't afford the potential loss certainly cash in on half of your profits now.
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Tony Peterson
Posted: 13 February 2012 12:35:14(UTC)
#7

Joined: 10/08/2009(UTC)
Posts: 17
If you fail to take capital gains up to £10100 in value, and you have such gains in your portfolio already, failing to take some or all of them before April 5th will leave you, at some future date, paying tax on inflation.
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sgjhaghsdg
Posted: 13 February 2012 12:50:32(UTC)
#8

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CGT allowance is £10600 for 2011/2012 and also for 2012/2013. It's always worth realising gains to use this, and you can also use "Bed and ISA" to slowly trickle your investments across into a shelter from future tax.

As for what price to buy and sell at, you need to look at the underlying value in the company and decide for yourself whether it's over-valued or under-valued.
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Michael Edge
Posted: 13 February 2012 14:08:42(UTC)
#9

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I write this message in response to reading a message by TJL.

I, too, deliberate over the desire to take the profits accrued over a period. There are many times when I wished I had taken the profits at a share price peak only to watch the share price, and therefore my profits sink...but we can all benefit from hindsight...and be richer for the experience!

Me? I just have a bunch of blue-chip high'ish dividend paying (excl. BP gulf spill, but growing) shares in my portfolio that just sit there and grow within my portfolio. Boring and totally unexciting shares, I know, but in times of austerity and the state of the economy/Europe/World it seems to be the best method to produce a regular and reliable income - alternative views and thoughts would be welcome.

I am definitely not a Warren Buffet type, nowhere near, I am just a single parent chap trying to make his money work for him in the best possible way and I do not have many complaints at this juncture.

QUOTE: "...and I don't often take money out" In the short time I have been an investor (nearly 3 years) I have never taken any money out for my own purposes except to sell and then immediately buy another ISA position - and, goodness, hindsight would have been a huge advantage when selecting a purchase then...(if only...)

I have not really provided a different view subsequent to reading the message posted by TJL but, if there is any food for thought within this wee tome, then splendid, and good luck to you.

If someone would like to respond to this message (or any other) I would appreciate the differing views and, perhaps, advice on how to change and increase my income/Capital growth.

Thank you
MDE




I read once that it is never a bad time to take profits.
I have made loads of paper profit so far this year.
I am beginning to feel like I should bank some of these profits - not based on anything scientific, just feels like it might be the right thing to do and I don't often take money out.
What do others think?
I see on Trustnet today there are two articles side by side, one entitled 'Investors haven't missed the boat' and the other 'Dramatic correction due' - so the future is obviously as clear as mud, as normal.
Opinions gratefully recieved.
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1 user thanked Michael Edge for this post.
antigricer on 17/05/2012(UTC)
Fernworthy
Posted: 13 February 2012 14:28:59(UTC)
#10

Joined: 13/02/2012(UTC)
Posts: 4

All very interesting but rather inconclusive.

A question for all you experts out there, from someone with no expertise in the stockmarket but who does try to read what other investors say (and even act on it!)

The end of the tax year is approaching, should I invest my Isa allowance in funds/shares before the April deadline in the hope the rally continues, or forfeit the tax free allowance and wait until later in the year.

I suppose what I am saying is, Is now a good time to invest?

I appreciate investing in the Stock market should be viewed as a medium term /long term strategy BUT, invest before April, or wait?
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sgjhaghsdg
Posted: 13 February 2012 14:55:14(UTC)
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> I suppose what I am saying is, Is now a good time to invest?

Not particularly. August through to October were far better, and that's when I was moving from cash and bonds into equities like a man possessed. I chipped another lump into a SIPP in mid-December, and this did well, but the extra 20% tax relief didn't arrive until late Jan, and I've still got some of that sat as cash.

I think that UK, Europe, Pacific and EM are still under-priced but the US is fairly priced. I'm maintaining my EM and small/mid cap bias, but will probably rebalance this back in April as it's starting to even out.

If you can't decide, why not put the money into a S&S ISA any time between now and April 5th but leave it as cash until you decide how to invest?
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snoekie
Posted: 13 February 2012 15:41:32(UTC)
#12

Joined: 26/08/2008(UTC)
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I think a lot more information is required before anyone can give a half intelligible answer.

Do you need the dividend income to live on?

The size of the portfolio?

The 'losers' you have and would some of these be sold to help offset CGT bill/keep you below exempt limit?

Which assets are you proposing to sell?

I tried selling 2 investments 15 months ago, L & G and Old mutual @84p and 115, thinking they would fall so I would be able to buy back in. BIG mistake. Look where they are today., 120 & 158!

With the proceeds of that and other takeovers I bought into other shares, Afren, BP, with a hangover of cash waiting for the decent drop, and missed out in the last month or so on Aviva and BP before they rose by very respectable amounts.

What are you watching, to buy? A loaded question because circumstances/opportunities change.

I sense that at the moment the market is somewhat overcooked but if you have decent investments, they will perhaps go down but also likely to recover long term, my opinion, but I am no oracle, fallible.
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Fernworthy
Posted: 13 February 2012 16:11:03(UTC)
#13

Joined: 13/02/2012(UTC)
Posts: 4
Thanks for the last 2 replies.

One respondent suggests "now is not a particular good time" -suggesting last year April to October or December.

Another, with helpful points, states that the market is "somewhat overcooked" at present.

Any other brains out there with comments -seems from the 2 fore mentioned I should perhaps wait and see until after April.

Perhaps wait until after March 20 Greek defaullt date or has that "all been settled " (until the next crisis)
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Fernworthy
Posted: 13 February 2012 16:15:29(UTC)
#14

Joined: 13/02/2012(UTC)
Posts: 4
oh to snoekie

Any investment would be a maximum £10.5K and it would come from a solid but unspectacular building society account 3%gross.Income not necesary
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banjofred
Posted: 13 February 2012 19:36:43(UTC)
#15

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http://www.tradingeconom...ed-kingdom/stock-market

put in form 1984

Every slow climb is followed by a fast tumble, 6000 to 4000, or in the mini rallies say 6000 to 5000

Why should this Spring be any different. Athens is burning and if you think the major panics and price drops of recent times are the end of it.... well maybe you are right.

I prefer to keep mainly in cash and "safe" funds, and dabble a bit pending the next mighty crash.

then I will buy

If the crash does not happen, I still have my money,

But it will

5900 is very nice, and gives me a chance to sell out of another fund or two

6000 will be great

I remember my (previous) IFA talking of 7000

I read somewhere online that the true value of the FTSE is around 3800. Can you imagine sitting at that level for a few years?

Putting your chips back on the table and "let it ride" is a strategy that almost never wins

Sorry to be a prophet of doom, but it has taken me almost a year to get just ahead of the game, with paper profits of a few thou going up in smoke.

Similar happened in 2008

Wont happen again

Fool me once shame on you, fool me twice....er what did Bush say???

Keep smiling !
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snoekie
Posted: 13 February 2012 21:09:30(UTC)
#16

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Banjo, methinks you are right, but Ferworthy asking for pointers.

There are quite a few defensives that will yield more than 3% gross and whilst may be affected by the return of the bear, but by not so much.

I am watching quite a few, SSE, BG, GSK, Tesco (still at risk of a further drop IMO), RSA (if it drops to circa £1, BP, Centrica, and a few others, some already in my portfolios (yes plural) But I reckon, notwithstanding the view of the pundits, Aviva is too volatile and exposed if the financial market get an upheaval. I do not rule it out, but not at its current price.

Noted today that, (I) having warned of the problems with France many months ago, is the first muttering about Germany's exposure, something I mentioned months ago. Germany has been France's backer for years, so directly and indirectly Germany, for all its strength, is now in the firing line. Yes it will be able to weather the storm, but.........

Germany were one of the principal architects of the euro, and a principal beneficiary of it cheapness (with a number of weaker countries being in it helping keeping the value down) and it sits uncomfortably that they are again 'raping' Greece with their draconian demands. They have taken the benefits, but are refusing to bail out a partner in the currency it set up and allowed Greece to join, notwithstanding all their gains. They allowed the over borrowing, and they and France also broke the rules but persuaded co members to give them a get out jail free card. What point of rules if you are allowed to ignore them?

If Greece goes, the Portugal is horribly naked, perhaps even Ireland.

At the moment all the gleeful cavorting around the bonfire has mollified the markets, but all this inaction and procrastination merely makes the end problem more difficult to resolve.

Also reported today is that America is still stalling in addressing its growing debts.

Fernworthy, the fact that it is in an account earning interest is good, so if I am right, you should be able to jump in when the 'dive' occurs.

My view.
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TJL
Posted: 18 February 2012 19:45:56(UTC)
#17

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Thanks for all the replies.
I have been in NW Scotland for the last few days and away from internet access - not sure if I find that good or bad; journey home today (to Northumberland) slightly scary at times.
I am now in the nice situation of having even more paper profits than when I created my original post: I have theoretically made over £14,000 since the beginning of the year - don't know about everyone else, but that's a reasonable amount to me.
I am going to keep a close eye on things going forward, and think I might take quite a bit of profit at the slightest sign of negative developments.
Even if the markets keep rising, profit is profit, and based upon the recent past some kind of correction is probably likely (although I still tend towards the feeling that a real recovery is itching to establish itself).
Regards.
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Tony Peterson
Posted: 18 February 2012 20:07:42(UTC)
#18

Joined: 10/08/2009(UTC)
Posts: 17
I'm grateful of the earlier correction of my number for CGT exemption.

I always take profits up to my wife's and my own limit whatever. But this year, in this investment climate I would not take a penny more.
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Robert Court
Posted: 19 February 2012 10:08:53(UTC)
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I agree with Banjofred's outlook.

Spectacular gains in January/early February, momentum stalled on 3rd February, gains peaked on 9th February and have slid every trading day since then.

Took out 20% of profits and holding onto cash until 'the price is right' to re-enter at higher yields.

Could the markets move the other way and recover? It doesn't matter - there will ALWAYS be investment opportunities if you're patient and don't panic that you're losing out in the short term.

A certain amount of cash gives you the power to reinvest without having to sell off something else to get what you want; once you have zero cash there are less options available to you.

I'm sure many of us have had times when we felt:

'I'd love to invest in 'x' now..... if only I had some spare cash.'
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1 user thanked Robert Court for this post.
banjofred on 21/02/2012(UTC)
Steve123
Posted: 19 February 2012 11:02:05(UTC)
#20

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In answer to the question of 'is it time to take profits', the S&P500 has climbed to 1361 and the VIX (index of the volatility of the S&P500) is down to 17.78. This combination of high stock price and low volatility - together with the all to obvious concerns in relation to Greece - makes me think that the steam has run out of this run. I am taking some profits.
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