BMD reaching 5 yr limit- Sell or Hold?

[Shinyuk]

I Have some BMD reaching the 5 yr limit in Feb. Approx 10% of my total holdings in this VCT post the merger with Baronsmead 5. I don't really need the money but a nice Rolex is tempting!
Seriously, I'm unsure of the climate for Gen VCTs with the new rules in place and wondered what other fools are thinking?

[Kidman]

There is an argument that one should sell when the five years are up and then re-invest in what one believes will do the job for the next five years. That way one gets another slice of tax relief. The rules say that one can't re-invest in the same VCT within six months but that option is unlikely to be available with BMD.

In the case of either of the Baronsmead VTs, I would caution against selling a complete holding so that one stays on the register which could be helpful if one wants to take part in a future fund-raising.

[Karellan]

Personally I have never sold a VCT as they are more valuable to me as part of my (balanced ???) portfolio. There is a sort of scarcity value in them as they dont grow on trees and are not always available when you want them. I want a stream of dividend income to spend , if I keep selling them then my dividend income will go down.

I feel that as most of them have kicked out dividends above the expectation norm that they now dont owe me anything. Some have paid me more than I paid for them and I still own their capital !

As with all investment things can change but thats where I am.

[BusyBumbleBee]

I'm unsure of the climate for Gen VCTs with the new rules in place and wondered what other fools are thinking?

I too am a bit unsure as to what is going to happen. I am not selling any (having got rid of Downing) and I am cutting back on the DRIS. For example British Smaller Companies VCT has just declared a large dividend but most of the performance of this VCT comes from the one investment they have just sold. So I have dropped out of their DRIS until they prove they can invest under the new rules (and get rid of their HUGE cash pile)

The risk/reward profile has undoubtedly changed and the overall out performance of all stocks and shares since the Brexit vote - and the Trump vote - worries me. Am accumulating cash to invest when the market comes off the boil. And I can wait to invest in VCTs until they are selling at distressed prices again. If I am wrong, I won't have lost anything but only time will tell.

[Shinyuk]

I Think I'm with you on this BumbleBee. I share the same concerns. I probably will sell (It's only a small part of my holding). Better to liquidate and hold a bit more cash IMHO.

Thanks for the feedback fools.