I put in $60k in ETFs 17 months ago. I’ve seen a return of 31.7% as of today (i.e. +$19k). Do I just leave it? It is tempting to withdraw…
Should I Withdraw My ETFs?
mendyl on 11/03/2024 - 18:49
Comments
- 1
- 2
@Gekov: sooo he jumnped on the S&P500 after most others had already called the Bull market which the majority were already predicting a good month to 6 weeks early, absolute genius. I guess with market time like that it explains why he doesn't have such a huge net worth.
@Gekov: Check your Caps key, looks like it gets stuck occasionally
FYI:
Listening to GaryK's latest Investors Edge show today (Thu 14 Mar) and he's called a (possibly short term) top in the semiconductor index last Friday and a new breakout in commodities, esp. gold.
Interesting …
He's also reiterated that he DOES NOT PREDICT MARKETS as some wannabe gurus do [AND FAIL] but "follows the bouncing ball"
"Check your Caps key"
What's with this widespread CAPS PHOBIA thingo?
je ne sais quoi …
Where is the poll?
When you sell you will have a capital gain, so your 31.7% gain will be lower.
If it is a well diversified ETF I would leave it.
If it is a concentrated thematic ETF, then it may be time to rotate out.
Generally you should create a well diversified ETF portfolio, and never sell, unless you really need the funds. CGT really impacts returns.
He held it for 12 months+ so does have a discount on potential cgt (maybe he also has a creative family trust arrangement too for further cheeky reductions in payable tax)
Tax is still tax, reducing it from 50% to 25% on the profit doesn't make much of a difference in this case. OP probably would have saved 15k on interest if they put it in the offset to begin with.
The market never goes down.
Buy ten houses in Sydney 50 years ago instead.
Buy ten Bitcoins (or 1000, doesn't matter given that the closing price for Bitcoin (BTC) in 2010 was $0.30, on December 31, 2010) only 14 years ago instead.
I compared gold to cryptocurrency yesteday. I hate to say this, but precious metals are for losers. In the last gold/silver 10 years they have only appreciated by 18.5 %. Better just to hold on to ever depreciating fiat currency and collect bank interest on it. When you purchase cryptocurrency, you are essentially purchasing nothing, yet you can make over 50x as much profit as purchasing something tangible like a gold bar. It's a crazy world.
Precious metals are meant to be a hedge against total economic oblivion. Not a standard investment expected to gain better than others.
If you bought all the bitcoins when they were 0.00001 cents each you'd probably change history and permanently crash the market and they would stay 0.000001 cents each forever no matter how much effort people put into mining them.
why would it crash the market when it wasn't traded anywhere near the scale it is today already at a miniscule valuation with so much more to be mined?
@May4th: Butterfly effect or something. Bitcoin has an intrinsic value of nothing at all, we live in the universe where it hasn't crashed yet but in most other universes bitcoin is already a memory, just a meme of some fad that didn't take off.
People are always inventing new crytocurrencies, but 70% of them are worthless after a few years. NFTs were cool a few years ago, but most have no value now. Purchasing alt coins is extremely risky behaviour, the equivalent of injecting drugs purchased from a stranger.
That said, a few lesser known crytocurrenices have performed even better than Bitcoin over the last year, like ShibaInu and DogeCoin. People like dogs :)
Bitcoin is at an all time high right at this very moment, $110,000 AUD per coin. I should have purchased some more when it was only $60,000, I would have made a 70% profit, but then almost half of that would go to the government.
yay baby - hindsight is 20:20 !
It may already be too late.
Why not sell a portion eg $19k worth
Put the profit in the offset and continue with your intial investment?
Because maybe there is a bear market and his capital will be reduced by 29k
If it were me, I wouldn't try to time the market and leave it in to compound. Peter Lynch's Magellan Fund was the top performing fund for decades, yet the average person that invested in his fund at the time still lost money. Why? Because people tried to time the market and most ended up buying at the highs and selling at the lows.
It's a personal decision.
Long term stocks should outperform what you'd offset from your offset.
It's impossible to tell if stocks will keep going up another 100% this year or will go down 50% though. So best to not overthink it.
I personally wanted some interest relief, guaranteed returns and to change my portfolio so sold about 33% of my etfs earlier this year and changed the remainder to a different combination.
Nice to have the money and profit secured and not paying as much interest. Of course I would have made more just leaving it in the share market though, so it's a good example of it's hard to time the market.
"it's hard to time the market"
But not impossible.
GaryK on the Investor's Edge shows how it's done.
Requires a lot of research and analysis.
He's successfully timed the market over the two years I've been following him, both short and long term tops and bottoms.
What are you trying to accomplish?
Trading is a gamble and will incur CGT.
If you really need the money then you don't have a choice but to remove it.
If you're trying to build yourself a future then set the divi's to reinvest and ignore it. And occasionally top it up when you have a spare 5k or something.
Nobody went broke by taking a profit.
(Something I probably don't heed)
Why didn't disclose what is the ETF name? It's like posting a bargain "bought X at 50% off" what X? Secret. Duh… Okay…
Depends
I'd sell enough to cover the offset account. Saving 5.94% is like earning 11.2% if you're on the top marginal tax rate
Hodl
You need to keep it in assets, governments around the world are pumping their money and devaluing their currencies. And if you withdraw you're going to have a big tax bill.
Money pumping goes straight into equities, trickles down into business and finally workers at which time it ends. Rate cuts + money printing = moon
If I were you I'd take 70% of it as profit because it's been more than 12 months so doesn't that mean you pay a discounted CGT and you get to minus the capital losses? I'd keep the remaining 30% in the trading account, find a stock or ETF that I'd like to invest in/trade and hope to increase the 30% to 50% over the next 12 months.
lol it's a pyramid scheme
No, that's the housing market.
HODL man. I bought AMD at like $15, sold it all at $35. Now it's $200.
it's a question of whether you think you can beat ~7.5-8% in ETF growth this year (your mortgage interest payment is after tax). the answer is likely yes in this environment, however putting it in offset is a much lower risk proposition. there's also tax implications for selling. and consider the opportunity cost - if you have better use for the money elsewhere
Time in market is usually more important than market timing.
Can you accurately predict major falls in share markets, and when the market suddenly bounces back? No, of course not. Neither can analysts. If they could, they wouldn't spend their time analysing and going on Youtube and TV to share their predictions, they'd be too busy making massive amounts of money.
Only you know your financial goals, what else you need the money for, any tax implications, your age and risk profile, etc. In other words, should you sell? Well… it depends :-)
Bezos is selling
Only withdraw if you are planning to retire or under hardship.
Your ETF amount is not large and only 17 month.
The effect of compound interest can only be seen in 10 years
https://www.moolanomy.com/wp-content/uploads/2019/07/SP-500-…
Money in the offset compounds as well, it's just compounding savings not compounding earnings.
It's reducing your compounding debt.
And you don't have to pay tax on it.
Yes
Depending on your tax circumstances or how close you are to retirement, it will vary slightly.
You'll have to pay CGT if you cash it out now, and if you are earning decent salary, up-to 1/3rd of your profit will go to tax.And as others have said, time in the market generally beats timing the market. If you are in your 20s or 30s, keeping these ETFs long term and only cashing it out later in life might save you from paying some of those tax $. Of course unless you need the money now to boost your offset and get closer to that mortgage-free lifestyle.
Has Bitcoin given higher returns?
What coins have the best return in recent years?I wanted to buy in when it crash (during the FTX collapse), but missus didn't want to….
Calculate the probable days you probably have left in life and your wish to pass on.
Then study the socialistic impact and come to the conclusion to start spending!A bird in the hand is worth 2 in the bush.
Stick it in your offset.
Yes you'll have to pay some capital gains tax, but you are effectively locking in a guaranteed 5.94% return on that money if it is in your offset.
If you keep it in ETFs/ shares etc, you are merely hoping that you'll return that or better.
In fact, it has to be better than that because you'll be paying CGT on any profit.
(What would the maths on that be?
50% CGT discount on shares held >12 months, if i recall correctly.
Your marginal tax rate, assume about 1/3 of income in tax, then halve it for the CGT discount.
So 6%, add 1/3 of that, * 50% = 7% required to break even.
Happy to be corrected by anyone)But you'll miss out on the compounding of those ETFs!
Well you'll be compounding your savings in your offset, so it cancels out, so it doesn't hold weight as reason to keep it in the ETFs.But these ETFs/shares might go to the moon! I'm resigned that i have neither the time, insider knowledge, or "luck" to winning the lottery of miraculous diamond hands in the share market to become a squillionaire.
I'll let you make that call on yourself.Yes, it's the low risk low reward option. But you're in ETFs, they're already low risk low reward.
i had the same thought when I sold half of my NVDA at 480 this year. it's 900+ now, win some lose some
You made the wrong decision of looking at the price after you sold them!
I've sold up, and ignored the news and not logged back in since!
It's heart breaking enough seeing a chocolate bar with a dollar off the day after I buy one, and wouldn't be able to let it go with shares/ ETFs.yes it's like checking up on how your ex is doing..don't do it folks!
ETF grew 37% - offset costs what - 8-9% ?
if that happened next year, putting it into offset might cost you a lost 28-29%pa
but prolly won't happen - my ETFs grew 7, 19 and 22% last year. Or average maybe 16%.
Chances are the ETF will continue to do better than putting in your $50K offset.
Keep track of AMIT annual cost base adjustments for ETF tax tho' - that's a little wriggly.
May I know which ETF are you investing or are worth investing? Looking for 5%+ return.
Poll required…
The relevant etf or sector would also help with making a semi informed guessHey guys I put $1 in an ETF and after 10 minutes it jumped to $1.5M what should I do?
What ETF has increased that much?
This sounds dubious at best.
NDQ is up about 50% since October 2022. VGS is 33%.
Heaps have, particularly if decent percentage is in US companies due to tech companies and us$ going crazy. VGS, NDQ, VTS would all be up to 30%+ (NDQ over 50% from memory).
yes
Kenny's cutting in
What an utterly daft post.
Quite seriously if you have to post this up - you should not be allowed to have $60k to invest or should not have invested in the the FIRST PLACE.
Yes, pull it all out the sky is about to fall.
No, leave it - another bull run coming.
Pick whichever one you prefer as you seem to be doing this randomly and not following a plan, so why start now?who hurt you?
Lol certainly not you friendo ;-)
HODOR. Apes strong together.
- 1
- 2
@Gekov: YEP.
GaryK details how he has held his S&P500 index position for 17 weeks from (14 Nov 2023) of the new bull market so far without having to even think about selling!
All detailed in his latest Investors Edge Show of 12 Mar 2024.
Listen for yourself … https://garykaltbaum.com/
A MASTER OF MARKET TIMING!