Getting nervous after investing in 12 very solid U.S. stocks

Hi Folks ,

I am in my late 60s - no mortgage, no debt and a decent pension. I have been reasonably successful investing in 12 very solid U.S. stocks over the past 5 years.

Lately however I am becoming increasingly nervous about this exposure because of 2 ongoing wars and I also feel these companies cannot grow much further

is anyone else feeling the jitters ? and is it time to cash in ?

At 60 and if you feel that way, the answer is probably yes, convert to cash investments, there are some good rates available at the moment.
If you were 50, its maybe no, but it is down to the individual.
Nobody can advise or predict the future.

The first issue is whether you can handle a significant fall in the value of the shares? It seems clear that you can, so that would suggest holding onto them.

You should be fully invested in directly held shares for two reasons.

If you are unlikely to sell the shares in the future, then you should hold onto them.

When you die, your liability to Capital Gains Tax disappears.

If you sell them now, you crystallise your CGT liability.

Brendan

But a more strategic point is that it's not a good idea to try to time the market.

You have to get it right twice.

You have to get out near the top.

And you have to buy in again near the bottom.

Very hard to do.

Brendan

robert moon said:

12 very solid U.S. stocks

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One issue for you to consider is the liability for US taxes when you die.



In practice, people don't pay them. But the executor of your estate might not be comfortable with that.

Brendan

robert moon said:

I also feel these companies cannot grow much further

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I have an investment in a UK company that is in the exact same position. They have squeezed all they can out of the company and will continue to do so over the coming years. However a broker note a few months back suggested that they cannot grow much further so they downgraded their recommendation. Immediately the shares started to fall.
It is something that I never thought much about....that a company cannot grow much further.

Isn't it better to invest in the index eg
Sp500
Djia

That way at least your not exposed to individual companies

I noticed the markets last week were bracing for what the fed would do about interest rates, whether or not fed would cut rates, or indicate a direction or date at least. I didn't get an update on that.

Then Friday sp500 went up 0.4% so it's been a very good 6 months

If you believe that you have done well and that you are well ahead there is a lot to be said for cashing in your chips. Back in the early years of this century I invested in individual stocks. I made good money out of them. Could I have made a bit more ? Yes I definitely could have, if I had held them just a little bit longer. Could I have made a lot less ? Certainly, if I had held them a little longer again I would have lost a lot. The shares included Horizon, BOI, Anglo, Providence, Bula and Elan, all of which turned to dust, and a few others such as IBM, Cisco and HP/Agilent. Selling when I did was a difficult and contrarian decision, and the temptation and market wisdom was to stay invested. Something told me not to be greedy and to be satisfied with having had a bloody good return and quit while I was ahead. It’s a decision I’ve never regretted, notwithstanding the fact that a couple of those grew a lot subsequently. The thing is to make the decision that feels right for you, bank your profit and promise yourself never to have regrets.

Freelance said:

Back in the early years of this century I invested in individual stocks. I made good money out of them.

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Anecdote is no substitute for analysis.

The analysis shows that your long term savings should be invested in the the market for the long-term and should not try to time it.

Of course, some people will sell out at the right time and then try to convince everyone else that they are a genius who understands the market.

But for everyone who exits the market, there is someone who enters the market.

Brendan

With interest rates high in US , they are expected to go down
This will be accompanied with s big sigh of relief in the markets and a big rally
So the indexes will return to market highs (5400 for sp500)
As for individual shares can't be sure
For example the EV sector, Tesla in particular, will it return to its high? Can't be sure.


By the way i don't say the same for ecb rates. They probably stay higher for longer because they are lagging US rates

Thank you all most sincerely for your informed comments. I have decided to sit tight and I believe I am young enough to recover if there is a crash.

You don't say if you have other investments beyond these 12 (and your pension). If there is some anxiety I will assume these 12 are your only noteworthy non- pension investments.

How diversified are they in respect of industries? We know geographically they aren't very diverse.

There is an argument 12 units is too concentrated so close to retirement anyway, regardless of how diversified they are.

With limited info provided - I would sell and place in a diversified fund.

However if your pension is strong as you state then perhaps part of these investments are "play money" in which case sell a chunk and keep a chunk invested so it's at a level that remains interesting but comfortable.

Never any harm to review the basic risk assessments every few years or after major life change. If the market tanked tomorrow and your shares were down 50% how would you feel? And would you panic sell if it the trend and noise suggested it was going to get even worse?

You could sell 50pc of your holdings and keep the rest as is. That way you can enjoy the feeling of safety, while still enjoy the rodeo