Hey all,
Asking you all to gaze into your crystal balls and share your insights here!
I need to liquidate my shares for a large purchase in the next 3 months. I'm down $14,000 on the original $60,000.
It's all in VAS.
Would you wait and ride out the market, or sell and bank the $14,000 capital loss to offset for future capital gains?
How do you guys think through these dilemmas?
Thanks
Its fairly obvious and I think OP knows
Market is definitely in downtrend.as it has been all year.
But doesn't go down in a straight line just to suck optimitic people in.
Actually you get traders shorting the market and every now and then, they all rush to close out thier short positions by buying back the shares at a lower price.
This causes what in known as a "Short squeeze" and can drive prices back up a long way as traders shorting the market scramble to get out.
These short squeezes, if not optimistic buying, present good opportunities to sell..
Expert advice suggests the market wont bottom for another 18 months to 2 years.
In fact we could see further big falls before the end of this year when the "Get out now" mentality takes over.
Sell on any strength in the market as the smart money is doing
Wow a real life billionaire
can't tell if this is a troll comment or if you're actually being serious lol
Lol another reddit trader. Short squeezes are few and far between, only happening where liquidity is low. Aka small cap stocks.
You have just displayed your complete lack of knowledge in this area.
I wont explain but anyone that understands will have a good giggle at your comment.
HINT: Check our definition of "Small cap stocks":
Expert advice says you can never predict when the market will top/bottom with certainty. Your prediction of 18 months to 2 years is based on nothing. Obviously we're in a bear market now but any attempt to time the market will probably leave alot of people missing out on the rebound that will happen when these underpriced shares correct back to their fair price.
these underpriced shares correct back to their fair price.
Well there's two (or more) people involved in any exchange. What make's you certain you're on the right side of the two by claiming something is "underpriced"
@idjces: Shares might go down in a recession but unless the world ends tomorrow good quality companies will continue to operate and their value in the long run will increase and therefore are undervalued vs their future earning potential. During a bear market shares also carry much more risk and therefore are valued less than in times of economic stability.
Another "Know it all"
I have not picked the bottom
I have simply suggested a time frame for staying cautious.
But as I said: this comes from an expert. Not from me
Do some research and you will find that historical data confirms the advise given.
This is a big boom well overdue for a big bust.
The time for ultra low interest rates is well and truly over.
All prices must now reajust to "Normality" and this will take time to play out.
As has been suggested - 18 months to two years.
There will be bear market rallies along the way.
And then there will be new lows to follow.
Your advice is sound, but it depends.
Depends on which stock he's using, how soon he needs the funds, and his appetite for risk. If he's made losses with big corporations/"safe bets", chances are that his funds will bounce back after a while. But the smaller players have a lower probability, but the nature of their volatility means they can bounce back sooner and bounce back higher. Hence, it comes down to his risk-appetite.
OP has stated that its all in VAS which is the Vanguard Australian Shares Index ETF (ASX: VAS)
Such ETFs track the index as close as possible - up AND down!
Only a fool stays in a down-trending market
Check out the S&P500 this year
https://www.google.com/finance/quote/.INX:INDEXSP?window=YTD
Are you trying to suggest that VAS will have a short squeeze? Diamond hands OP!
Dont know the exact mechanics of short-selling but usually a trader will short particular shares - NOT ETFs
\The ETF will simply follow the market down PRECISELY!
Sell sell sell
You can use DCA for selling as well if you don't have a crystal ball.
DCA works for buying. But when you're selling, sell the same number of shares each period.
If you sell the same dollar amount each period, you will sell fewer shares when they're higher-priced, and more shares when they are cheaper. Not what you want to do.
If your large purchase is for certain then sell now. Nobody can predict what is going to happen.
The efficient market hypothesis means all the information on what is going to happen in the future is already baked into the current share price.
hypothesis
Exactly that.
You can't explain this: The propensity for U.S. stocks to log the bulk of gains when the cash market is shut overnight has had investors scratching their heads for years. Now there are exchange-traded funds in the works that seek to let investors cash in on the phenomenon.
just wait until the very last minute and then sell. either way you'll probably make a loss.
VAS was at a higher level between May '19 and Feb '20 and then again for Nov '20 until now-ish. VAS listed in May 2009. So a capital loss is far from a sure thing.
Furthermore in terms of an investment loss before tax, VAS paid $6.25 in this year alone. $2.32 in 2021 and $2.67 in 2020. So even if you bought in Feb '20 you would have recovered your money in distributions.
In fact you probably had to buy after April '21 to make an investment loss before tax.
This is the way it works, sell now and it will make a 200% increase return in the next few months. Sell later and it will make a 200% loss on return in the next few months. It's just how the universe works, unfortunately.
Totally, my last two sell orders saw the market bounce back 2% - 4% the days after lol
Create an Inverse-LemonShapedRock ETF and you'll make a fortune!
Just let me know when you sell and what shares. I'll buy them to balance out the universe. Or would it drop another 200% and make things unbalanced :/
Yup, the universe is quantum
Do it now, before WWIII breaks out.
Sell all your AUD too
Alternatively do it later when Russia-Ukraine is resolved and WWIII didn't break out
Yesterday.
Last year.
Buy high, sell low
Thats the only way to go!
I can turn that $2mil you have there into 5 figures, ez.
Found the crypto investor
ouch.
sell 1/3 every month for 3 months
We're heading into a recession
it's going to get worse before it gets better
Reminds me of my time in Afghanistan where the assessment was that it was going to get worse before it gets worse!
Congratulations on your escape from the Taliban.
can i please borrow your crystal ball when youre done
Don't need a crystal ball to notice the international economy is sick with debt.
Even the most bullish investors are starting to get cold feet. :)
If it was certain it would be priced in by now. I don't feel particularly either way about it - but would I would not be willing to say is "X event is sure to happen".
how are you down 25% on vas, isn't it asx shares
peak is $97 current is $82 thats 18%, 18% of 60K = 10.8k
putin will die soon, and ukraine - russia war be over, asx boom
Putin is only 70 and can afford the best healthcare in the world, on account of being the richest man in the world. Who knows how long he will live.
being rich doesnt stop terminal cancer, and the people that care for him will eventually not want to care for him, ie like hitler
I just hope that, as he slips into the dementia senility that comes just before shuffling off of this mortal coil, he magically forgets all of the fancy radioactive toys that he has pointing towards literally every one of us on his way out. The worst case scenario is if Putler knows his time is up, and is solipsistic enough to figure that if his world is ending then it's only fair that everyone else's does, too.
As long as you are in the position to magically cause him dementia, you may as well just assassinate him and let the Russian top command all suspect each other of doing it. It's what Tom Clancy would do anyway.
Yeah but one of those world-class doctors could inject him with anything…
And that doctor would be a hero martyr.
I had some in IVV before then sold and bought into VAS, so the loss is including the IVV loss.
yeh just sell 1/3 at a time, dont stress too much, ive lost loads worse if makes you feel better
That's two transactions then, you don't get to roll your losses over on your taxes, the capital loss already occurred when you sold IVV. so you shouldn't think about them like that
but somebody will replace him
Sell now, and open a new high interest savings account to get a promotional rate for the next few months
Probably the safest option here.
Speak to the better half if you have one and see what the answer is.
Speaking from lived experience? Follow AndyC1's advice.
add a poll
dump it
I'm 50/50 on this but from everything i look into, I'd probably sell it. If you want to hedge your decision either way, sell once a month until it's all sold. (as someone above already mentioned)
I dumped everything pre June 30 of this year.
I share your pain. My VAS holdings are down 11.89% from Nov last year. Psychologists say we feel a loss 3 times that of a win, so I'm holding on for better days. Clenching a stick in my mouth eases the pain.
I mean if you're buying into ETF's it's always about a long-term hold no?
You don't buy into it expecting a quick flip so makes sense… and not like many other stocks are doing any better.
Just sold 50% now.
Everyone watch the market bounce tomorrow!
Thanks mate
damn bro, Ukraine just ended the war
Damn! I read this too late to buy VAS before markets closed for the day.
Phew, only up 0.24%.
He stopped the market from doing a huge crash today.
Real heroes don't wear capes
They wear their underwear on the outside!
You have a special power. VAS rallied in the morning trade, up 0.17%
Casino have coolers. ASX now has one too.
I’d definitely wait or do it now.
Really depends on what stocks you have. Different stocks will react differently in this volatile market.
How can you be definite on two decisions?
It’s called Schrödinger‘s trade
I can make you small fortune OP……, as long as we start with a large fortune.
No one can time the markets. This goes for both buying and selling. Doesn't matter if you're a mum and dad investor or a person with a multi billion dollar portfolio.
It will probably going to get worse before it gets better. May 2023 might be a good time to buy back in if you sell now… However, you mention you are moving to another asset class.
I'm looking at the yield curve for my inspiration if you were wondering where my estimate came from.
How do you guys think through these dilemmas?
Over here at OzB, we all have credit cards with "price protection" insurance. 😊
The dilemma of loss aversion…
I'm riding it out, DCA all the way for the next few years and hope to come out on top.
Majority Traders i respected/followed are quite bearish except crypto guys 😄 My hunch it's still going down til fed says no more rate hike (provided no more "surprises")
Why would you sell at all?
Right now you haven't actually lost anything at all. If you do sell then you will have lost.
Keeping them is an investment to your future. And now is a great time to buy as all the shares are on sale.
You haven't said what you're going to buy, and that may change the advice. Especially if it's a high-yield investment BMW /s
More profitable to use the funds elsewhere at this point in time.
It's likely more profitable to keep them where they are.
Selling them now actually loses money, keeping them still earns dividends.
Buying more now is most likely a very good idea. The Australian economy will most likely recover within a couple of years, buying shares when they're cheap is the best time to get them.
Wherever this "elsewhere" is has to be exceptionally outstanding to make up for the instant 20% loss on sale.
This is all fine in theory, but his investment horizon is 3 months.
It’s not more profitable to sell at a loss then try and make money back elsewhere.
He needs the money for personal reasons
Hodl
Use your time machine and go back and don't invest, or take it out before it started going down if it went up a bit first.
Depends on what you're purchasing now. If it's a high yield investment like a BMW or TESLA then it's better to hold on to your shares instead.
hodl!
I'm in the same boat, and I'm holding tight to mine. I think the market will continue to drop, but I haven't got the balls to sell them until I really need the money. Good luck with your purchase, and at the end of the day, it's just money. You can always find ways to make some more down the road.
Is everyone selling cause they think war is close?
Nah, it's a culmination of things, war is only one factor, but I don't think Russia VS Ukraine will go on for much longer, it's supply chain issues, money printing/inflation, rising interest rates, the jobs market, property, energy, some people are talking deflation now… So many factors are now coming to a head, most people are expecting things to get worse in the near future, I'm just waiting to see what's going to be the final card that topples the stack and causes a recession/depression/market crash.
Cathie Wood is heavily invested in tech, her portfolio has been hit due to the rate rises which is why she and many others in tech are talking about deflation.
https://markets.businessinsider.com/news/stocks/cathie-wood-…
https://www.reuters.com/markets/us/arks-cathie-wood-calls-fe…
ETFs in general are better if you don't expect to pull out in the short term. But then again sometimes life happens and you need to cash it in.
Why do you need to sell within 3 months?
Now