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Thinking of selling shares and going into gold and cash

Stocks and Shares ISA , Choosing funds for ISA's, risk factors for funds etc
Investment strategy discussions not dealt with elsewhere.
TopOfDaMornin
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Thinking of selling shares and going into gold and cash

#343965

Postby TopOfDaMornin » September 30th, 2020, 2:32 pm

I recently sold a flat I previously owned and about 1 month ago, I bought in equal amounts the following:

Baillie Gifford US Growth Trust
Fundsmith
iShares Edge IV World Momentum Factor UCITS
Blue Whale Growth
Lindsell Train UK Equity
S&P 500 Index
FTSE All-World UCITS ETF (USD) Distributing – GBP


With other shares e.g. HYP, my approach is to ignore market noise and remain fully invested. Based on past experience, I cannot time the market. However, there does seem to be growing noise and economic factors that indicate a very uncertain future and possible recession with large stock falls.

For those reasons I am considering selling the above 7 funds/trackers and moving into to safer alternatives like cash.

What are your views? Anyone else moving into cash until this ‘big crash’ happens?

TDM

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Re: Thinking of selling shares and going into gold and cash

#343971

Postby swill453 » September 30th, 2020, 2:39 pm

What factors do you see now that weren't there a month ago?

Scott.

TopOfDaMornin
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Re: Thinking of selling shares and going into gold and cash

#343975

Postby TopOfDaMornin » September 30th, 2020, 2:59 pm

swill453 wrote:What factors do you see now that weren't there a month ago?

Scott.


A second lockdown has come about, some say this was already on its way 1 month ago.

There is an increase in the number of job losses, again, this may have been obvious 1 month ago but it is actually happening now e.g. Shell.

Still no antidote for the virus.

TDM

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Re: Thinking of selling shares and going into gold and cash

#343985

Postby tjh290633 » September 30th, 2020, 3:39 pm

TopOfDaMornin wrote:
What are your views? Anyone else moving into cash until this ‘big crash’ happens?

TDM

In every previous crash since 1974 I have remained fully invested throughout. It did no harm to do so.

The problem with moving into cash or gold is that of when to move back out of it again.

TJH

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Re: Thinking of selling shares and going into gold and cash

#343987

Postby TUK020 » September 30th, 2020, 3:42 pm

TDM,
I would be wary of going from "all one way" throwing a switch to "all the other".

The portfolio you described seem to be all variations on long term growth in global markets.
Perhaps you should consider an asset allocation model of moving a portion into gold and into cash, so that you can do a more modest re-balancing exercise as/when a crash occurs.
Less exciting than an 'all the way' bet, but considerably lower risk.

I run about 5% of my portfolio in gold ETFs, and a bit more than 5% in cash & bond ETFs.
I am trying to slowly build my cash portion by not reinvesting all my dividends, so as to have some powder dry if markets take a plunge.
If they don't plunge, and keep recovering, then this becomes my cash de-risk buffer for moving into retirement.

No idea what investment horizon you are looking at

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Re: Thinking of selling shares and going into gold and cash

#343998

Postby dealtn » September 30th, 2020, 4:29 pm

TopOfDaMornin wrote:
What are your views? Anyone else moving into cash until this ‘big crash’ happens?

TDM


I know I can't time the market.

I believe I can outperform the market.

I am (nearly always) full invested.

I don't have any intention of moving into cash partially, let alone fully.

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Re: Thinking of selling shares and going into gold and cash

#344023

Postby LooseCannon101 » September 30th, 2020, 5:59 pm

I am fully invested - a global equity investment trust - buying, holding and dividend re-investment for the past 20 years.

Most years there has bad news, but almost as suddenly the wind changes. The media - TV, radio and newspapers are either gloriously happy or extremely despondent regarding e.g. the global economy, the next president of the United States, Brexit and interest rates.

Selling one's shares every time rain is forecast is good for your stockbroker, especially if you buy them back the next day when the outlook is blue skies and sunshine.

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Re: Thinking of selling shares and going into gold and cash

#344032

Postby BT63 » September 30th, 2020, 6:17 pm

TopOfDaMornin wrote:I
What are your views? Anyone else moving into cash until this ‘big crash’ happens?

TDM


If a 'big crash' is so obvious, maybe everyone else is under-invested in anticipation and maybe it won't happen. Markets seem to be very good at catching out as many people as possible.

Early this year I said on these forums that I thought FTSE would drop to 4000-4500 at which point I would buy aggressively. It hasn't happened.

However, I appreciated that I might be wrong because timing the bottom is a mug's game.
So I've been accumulating a little each month to slowly run down the cash reserve.
The lower the FTSE goes the more shares I buy each month and when FTSE rises I reduce my buying.
At FTSE 6500 I would stop buying. At FTSE 4000-4500 I would invest the cash reserve over a period of about six months.
With FTSE around 6000 my slow rate of buying would take a couple of years to invest all the cash reserve.

Often I have a strong view on where markets are headed but at the moment I have no idea.
There are too many unknowns and conflicting forces.
Brexit, recession, low interest rates (soon maybe negative), helicopter money (bounceback loans, furlough, gov't borrowing/spending), FTSE is not particularly expensive and greatly lagging other major indices so maybe some catchup potential.

So I'm planning to mostly sit tight with about 50% UK shares+funds, 30% gold, 10% international equity funds, with the 10% cash slowly being invested.

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Re: Thinking of selling shares and going into gold and cash

#344039

Postby Mike4 » September 30th, 2020, 6:50 pm

BT63 wrote:So I'm planning to mostly sit tight with about 50% UK shares+funds, 30% gold, 10% international equity funds, with the 10% cash slowly being invested.


If I may drag the topic off at a tangent briefly, is there a "Gold" board for my questions perhaps?

I'm always curious about how to buy gold and not suffer horrendous losses in terms of VAT, storage costs, retailer margins, loss of dividend. Does one buy gold in times of stability and low prices and hope for the meteoric price rise that happens once in a while when a crisis hits, and hope that wipes out the overheads involved?

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Re: Thinking of selling shares and going into gold and cash

#344051

Postby Mike4 » September 30th, 2020, 7:42 pm

ReallyVeryFoolish wrote:Likely a physical gold (as opposed to a synthetic) gold ETF rather than physical gold. I held one priced in GBP but lost interest in it after a couple of years going nowhere. Ofcourse, I would be well in profit now. I conclude that for now, the gold boat has sailed. To mention, others buy shares in gold miners as a leveraged play on the gold price. Too risky for me. HTH.

RVF


Thanks. Yes I agree the gold boat has sailed but it might return to port once Brexit and COVID have both finished playing out. Maybe in a decade or so. It cme back after the 1970s oil crisis and one or two others over my lifetime IIRC.

I can see the miners are a derivative of gold price but what is an ETF? When my associates i.e. plumbers, who have no interest or knowledge about investing are chattering on forums about buying gold and Tesla, I can see in the near the future the only way is down. (Was it Buffet who noticed this effect?) It always strikes me as near impossible to buy a kg of gold and stick it in a desk drawer for one's descendents. There is of course the risk of buying a kg of gold plated copper too, as that bank found out recently!

So just to be clear, I was thinking about how to invest not because I plan to invest now, but so if/when the market returns to a level I think looks good value, I know how to do it. Trying to learn the mechanics long in advance when there is no current temptation to dive in strikes me as a reasonably Foolish thing to do.

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Re: Thinking of selling shares and going into gold and cash

#344060

Postby BT63 » September 30th, 2020, 8:11 pm

Mike4 wrote:
BT63 wrote:So I'm planning to mostly sit tight with about 50% UK shares+funds, 30% gold, 10% international equity funds, with the 10% cash slowly being invested.


If I may drag the topic off at a tangent briefly, is there a "Gold" board for my questions perhaps?

I'm always curious about how to buy gold and not suffer horrendous losses in terms of VAT, storage costs, retailer margins, loss of dividend. Does one buy gold in times of stability and low prices and hope for the meteoric price rise that happens once in a while when a crisis hits, and hope that wipes out the overheads involved?


Last time I bought some gold was a top-up in 2014 and there wasn't any VAT (silver may have VAT to pay but it's a much more speculative metal that tends to lag gold then amplify gold's moves). I usually deal in physical coins with Baird & Co. Many people prefer ETFs.
For quantities of around £5-10k dealers will sell you gold for about 3% over spot price and buy it back for about 2% below spot price.

As for meteoric rises, in the last 20 years it hasn't really been the case. As for crises, gold often drops in the early stages but reacts to the inevitable monetary stimulus. Gold's behaviour has been more of it tracking the increase in money supply, rising government debts and low/negative yields.

Hopefully that gives enough information and I'll say no more on this topic so as not to annoy the moderators or go to far off topic. There is a gold/mining/metals discussion board lower down LemonFool's home page.

Mike4
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Re: Thinking of selling shares and going into gold and cash

#344069

Postby Mike4 » September 30th, 2020, 9:03 pm

BT63 wrote:
Mike4 wrote:
BT63 wrote:So I'm planning to mostly sit tight with about 50% UK shares+funds, 30% gold, 10% international equity funds, with the 10% cash slowly being invested.


If I may drag the topic off at a tangent briefly, is there a "Gold" board for my questions perhaps?

I'm always curious about how to buy gold and not suffer horrendous losses in terms of VAT, storage costs, retailer margins, loss of dividend. Does one buy gold in times of stability and low prices and hope for the meteoric price rise that happens once in a while when a crisis hits, and hope that wipes out the overheads involved?


Last time I bought some gold was a top-up in 2014 and there wasn't any VAT (silver may have VAT to pay but it's a much more speculative metal that tends to lag gold then amplify gold's moves). I usually deal in physical coins with Baird & Co. Many people prefer ETFs.
For quantities of around £5-10k dealers will sell you gold for about 3% over spot price and buy it back for about 2% below spot price.

As for meteoric rises, in the last 20 years it hasn't really been the case. As for crises, gold often drops in the early stages but reacts to the inevitable monetary stimulus. Gold's behaviour has been more of it tracking the increase in money supply, rising government debts and low/negative yields.

Hopefully that gives enough information and I'll say no more on this topic so as not to annoy the moderators or go to far off topic. There is a gold/mining/metals discussion board lower down LemonFool's home page.


Thanks.

It's vaguely on topic as its mentioned in the thread title, I'll assert!

Last time I had my attention drawn to the price of gold was when that nice Mr Brown was flogging off our reserves at an all time low of around $200 an ounce IIRC. At the time I thought I should be buying the stuff but I had other fish to fry. Now it is $1k an ounce higher is it not? That counts as a meteoric rise in my book. ;)

I'll go and have a look for the *right* board, thanks for the pointer.

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Re: Thinking of selling shares and going into gold and cash

#344073

Postby BT63 » September 30th, 2020, 9:27 pm

Mike4 wrote: At the time I thought I should be buying the stuff but I had other fish to fry. Now it is $1k an ounce higher is it not? That counts as a meteoric rise in my book. ;)


How much have house prices increased?

How much has money supply increased?

How much has debt increased?

A lot of things are floating higher on the rising tide of money supply/debt-creation/quantitative easing.

20 years ago FTSE began at bubble valuations so the tide of money hasn't been as supportive. Gold was the opposite so it benefitted from both undervaluation and money/debt supply.

It may soon be the case that everything floats higher as C19 causes governments to continue monetary stimulus. I don't hold bonds because I am concerned about their low/negative yields in what might eventually become an inflationary environment.

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Re: Thinking of selling shares and going into gold and cash

#344079

Postby shetland » September 30th, 2020, 10:10 pm

Mike4 wrote:
BT63 wrote:So I'm planning to mostly sit tight with about 50% UK shares+funds, 30% gold, 10% international equity funds, with the 10% cash slowly being invested.


If I may drag the topic off at a tangent briefly, is there a "Gold" board for my questions perhaps?

I'm always curious about how to buy gold and not suffer horrendous losses in terms of VAT, storage costs, retailer margins, loss of dividend. Does one buy gold in times of stability and low prices and hope for the meteoric price rise that happens once in a while when a crisis hits, and hope that wipes out the overheads involved?


Well that killed off the OP’s thread !

If you want to discuss anew topic then start a new thread

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Re: Thinking of selling shares and going into gold and cash

#344081

Postby Mike4 » September 30th, 2020, 10:27 pm

shetland wrote:
Well that killed off the OP’s thread !

If you want to discuss anew topic then start a new thread


And yours is the most off topic post in the thread so far.

Use the report facility rather than start a meta discussion about a thread you disapprove of, in the thread itself.

I hold the OP's discussion subject was weak and had run out of steam anyway before I started the tangential discussion.

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Re: Thinking of selling shares and going into gold and cash

#344100

Postby gryffron » September 30th, 2020, 11:49 pm

BT63 wrote:It may soon be the case that everything floats higher as C19 causes governments to continue monetary stimulus. I don't hold bonds because I am concerned about their low/negative yields in what might eventually become an inflationary environment.

Indeed. "Cash" is not a particularly safe investment when govts across the globe are printing money like it is going out of fashion.

Gryff

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Re: Thinking of selling shares and going into gold and cash

#344116

Postby TUK020 » October 1st, 2020, 7:55 am

Mike4 wrote:
ReallyVeryFoolish wrote:Likely a physical gold (as opposed to a synthetic) gold ETF rather than physical gold. I held one priced in GBP but lost interest in it after a couple of years going nowhere. Ofcourse, I would be well in profit now. I conclude that for now, the gold boat has sailed. To mention, others buy shares in gold miners as a leveraged play on the gold price. Too risky for me. HTH.

RVF


Thanks. Yes I agree the gold boat has sailed but it might return to port once Brexit and COVID have both finished playing out. Maybe in a decade or so. It cme back after the 1970s oil crisis and one or two others over my lifetime IIRC.

I can see the miners are a derivative of gold price but what is an ETF? When my associates i.e. plumbers, who have no interest or knowledge about investing are chattering on forums about buying gold and Tesla, I can see in the near the future the only way is down. (Was it Buffet who noticed this effect?) It always strikes me as near impossible to buy a kg of gold and stick it in a desk drawer for one's descendents. There is of course the risk of buying a kg of gold plated copper too, as that bank found out recently!

So just to be clear, I was thinking about how to invest not because I plan to invest now, but so if/when the market returns to a level I think looks good value, I know how to do it. Trying to learn the mechanics long in advance when there is no current temptation to dive in strikes me as a reasonably Foolish thing to do.


Wisdom Tree Physical Gold ETF
https://markets.ft.com/data/etfs/tearsh ... AU:LSE:USD

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Re: Thinking of selling shares and going into gold and cash

#344132

Postby tikunetih » October 1st, 2020, 9:37 am

TopOfDaMornin wrote:With other shares e.g. HYP, my approach is to ignore market noise and remain fully invested. Based on past experience, I cannot time the market. However, there does seem to be growing noise and economic factors that indicate a very uncertain future and possible recession with large stock falls.

For those reasons I am considering selling the above 7 funds/trackers and moving into to safer alternatives like cash.


Think on this...

1. Your normal investment method is vLTBH, plus your past experience is that you cannot successfully time purchases/sales, yet you now wish to give it another attempt - ignoring your past experience - with, presumably, a large chunk of your portfolio.

- Do you see the inconsistency here? ;)


2. You've recently exposed, presumably, a large amount of additional money to market risk - your new purchases - and are experiencing some initial buyer's remorse afterwards as volatility, sentiment and newsflow has you questioning whether you've acted wisely/hastily.

- These feelings are entirely normal in such circumstances. ie. move along, nothing to see here.


3. Quoting Howard Marks:
    First-level thinking says, “I think the company’s earnings will fall; sell.” Second-level thinking says, “I think the company’s earnings will fall less than people expect, and the pleasant surprise will lift the stock; buy.”
In your case:
    TopOfDaMornin, whose past experience indicates they cannot time the market successfully, says, "there does seem to be growing noise and economic factors that indicate a very uncertain future and possible recession with large stock falls. For those reasons I am considering selling the above 7 funds/trackers and moving into to safer alternatives like cash." Second-level thinking says, "Following a very large recovery rally, sentiment deteriorated and negative newsflow began dominating during a market pullback/correction, causing investors without market timing skills to become worried and want to sell out in large size; consider buying".


None of us know with certainty what markets are going to do next, but relying on gut/feelings/methods that have not previously worked for you (ie. your prior market timing attempts) doesn't sound like the most sensible/rational way for you to approach things

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Re: Thinking of selling shares and going into gold and cash

#344143

Postby dubre » October 1st, 2020, 10:30 am

The trouble with voicing an opinion on investment is that confidence levels of error are pretty high.

However, I would not have bought any of the 7 mentioned funds at that time ( excepting perhaps Lindsell Train). If I had made the decision to buy at the time I would not sell now.

I bought Centamin( a gold miner) two years ago at 105p. It is not a bargain now at 203p?

When to sell is always the most difficult decision for me.

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Re: Thinking of selling shares and going into gold and cash

#345272

Postby Bubblesofearth » October 5th, 2020, 9:23 am

TopOfDaMornin wrote:For those reasons I am considering selling the above 7 funds/trackers and moving into to safer alternatives like cash.

What are your views? Anyone else moving into cash until this ‘big crash’ happens?

TDM


Isn't the time to rebalance when the asset you are moving out of has risen and the one you are moving into has fallen? Rather than the other way round?

BoE


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