Cashing in on portfolio market gains
Cashing in on portfolio market gains
I am retired with a healthy IRA. I am considering cashing in gains from the past 12 months and placing the money in a money market fund. The purpose would be to have a cash reserve in my IRA to buy more shares during market dips. Since I am no longer contributing to the IRA, I have no other means of taking advantage of market declines. My dividends and capital gains are all reinvested. The IRA is my long term bucket. Thoughts?
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Re: Cashing in on portfolio market gains
Sounds like a fantastic anti boglehead idea! Go ahead and try timing the market. Be sure to update the thread when you get back in.
Re: Cashing in on portfolio market gains
Do you have a Investment policy statement? What does it say?
If you don't have one, why not?
What's special about cashing in the last 12 months?
Why not cash in the past 5 years or 10 years? Or maybe cash in the gains of last week.
What metric are you are using to determine the time period of gains to "cash in"?
I'm retired for 6 years now and my IPS is my signature below.
That's all I need.
If you don't have one, why not?
What's special about cashing in the last 12 months?
Why not cash in the past 5 years or 10 years? Or maybe cash in the gains of last week.
What metric are you are using to determine the time period of gains to "cash in"?
I'm retired for 6 years now and my IPS is my signature below.
That's all I need.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
- markgardner
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Re: Cashing in on portfolio market gains
To be successful with market timing, you need to get two things right: when you get out of the market and when you get back in. Ask yourself what you know to be able to do this successfully that other investors don't. If your investments are for spending needs that will arise in the next five years, you should not be in the market. If you are investing for a decade or more, then stomach the volatility and risk and do nothing besides rebalance periodically to your target allocation.
Re: Cashing in on portfolio market gains
Agree with others above, it's not a good idea to try to time the markets. If you had said, you've hit your asset allocation upper limit on your stock % that allows you to sleep at night and are rebalancing by selling some shares to get back into range, that's different. Or if you had said, you are tax-gain harvesting and expect to have so much room within your 2025 Federal tax bracket that your realized Long-Term Capital Gains for the shares you are selling will be taxed at 0%, that's different (although it's risky to do that so early in the year when the future course of the year is unknown). But you didn't say either of those things, so it looks like market-timing. Penalty flag.
Re: Cashing in on portfolio market gains
Ok but the market goes up more than it goes down so it’s just as likely that even after dips you’ll be buying in for more than you sold at.d2sutton wrote: Tue Jan 21, 2025 10:29 pm The purpose would be to have a cash reserve in my IRA to buy more shares during market dips.
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Re: Cashing in on portfolio market gains
If you are retired and you are invested 100% in stocks, then I think this is perfectly fine. If stocks keep going up you can just leave it there and spend it eventually. If stocks go down, well, you may even want to spend it in that case too. Who knows. Your choice.d2sutton wrote: Tue Jan 21, 2025 10:29 pm I am retired with a healthy IRA. I am considering cashing in gains from the past 12 months and placing the money in a money market fund. The purpose would be to have a cash reserve in my IRA to buy more shares during market dips. Since I am no longer contributing to the IRA, I have no other means of taking advantage of market declines. My dividends and capital gains are all reinvested. The IRA is my long term bucket. Thoughts?
I am taking you 100% at your word here. "Cash in gains" means gains. 12 months means 12 months.
This time is the same
Re: Cashing in on portfolio market gains
If they're NAV gains that's not necessarily a bad idea, next time you look those NAV gains could be gone.d2sutton wrote: Tue Jan 21, 2025 10:29 pm I am retired with a healthy IRA. I am considering cashing in gains from the past 12 months and placing the money in a money market fund. The purpose would be to have a cash reserve in my IRA to buy more shares during market dips. Since I am no longer contributing to the IRA, I have no other means of taking advantage of market declines. My dividends and capital gains are all reinvested. The IRA is my long term bucket. Thoughts?
If you're reinvesting all distributions you will be buying low when your funds take NAV losses, obviously if you sell shares your distributions will be lower.
The big caution here involves opportunity risk, you could be forfeiting total return in exchange for whatever a MMF is paying.
Good Luck.
Last edited by KEotSK66 on Wed Jan 22, 2025 1:41 pm, edited 1 time in total.
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Re: Cashing in on portfolio market gains
Cashing out gains with the intent of buying lower is not something I’d try. When will equities be lower? How much lower before you buy back in? Will you have the gumption to do it when markets are careening?d2sutton wrote: Tue Jan 21, 2025 10:29 pm Since I am no longer contributing to the IRA, I have no other means of taking advantage of market declines. My dividends and capital gains are all reinvested. The IRA is my long term bucket. Thoughts?
If you’re reinvesting dividends and capital gains you’re buying more shares throughout the year. Sometimes at lower NAVs. Charlie Munger has said, “Don’t interrupt the compounding machine unnecessarily”. I wouldn’t do what you propose.
- dogagility
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Re: Cashing in on portfolio market gains
This. That pesky market trajectory goes up too much.jjj_22 wrote: Tue Jan 21, 2025 11:39 pmOk but the market goes up more than it goes down so it’s just as likely that even after dips you’ll be buying in for more than you sold at.d2sutton wrote: Tue Jan 21, 2025 10:29 pm The purpose would be to have a cash reserve in my IRA to buy more shares during market dips.
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Re: Cashing in on portfolio market gains
Locking in gains on average means locking out more future gains.
It sounds as though you lack an asset allocation. Are you in a target date fund or managed fund, or have you picked your own investments? If you are in a target date or managed fund you already have an asset allocation. You should check to see if it makes sense for someone in your age and situation.
Pick an asset allocation that works for your age and situation, then that will tell you how much money to move out of your investments (if any at all). Do not pick an asset allocation based on fear or greed (i.e. don't say "this market sure seems hot, so instead of this asset allocation that makes sense for someone my age, I'll pick an asset allocation that makes sense for someone who is 104 years old). For an easy starting point, do 120 minus your age in stocks. So if you are 50, put 70% in stocks and 30% in fixed income. If you want cash, feel free to make 5-10% of the fixed income portion a money market fund like VUSXX.
It sounds as though you lack an asset allocation. Are you in a target date fund or managed fund, or have you picked your own investments? If you are in a target date or managed fund you already have an asset allocation. You should check to see if it makes sense for someone in your age and situation.
Pick an asset allocation that works for your age and situation, then that will tell you how much money to move out of your investments (if any at all). Do not pick an asset allocation based on fear or greed (i.e. don't say "this market sure seems hot, so instead of this asset allocation that makes sense for someone my age, I'll pick an asset allocation that makes sense for someone who is 104 years old). For an easy starting point, do 120 minus your age in stocks. So if you are 50, put 70% in stocks and 30% in fixed income. If you want cash, feel free to make 5-10% of the fixed income portion a money market fund like VUSXX.
Re: Cashing in on portfolio market gains
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- asset_chaos
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Re: Cashing in on portfolio market gains
I guess I don't see much of a point. Mostly you'll sell shares today and buy them back some other day. Ok, you're probably hoping that the dollars you sell the shares for today will buy a few more shares some other day, but most of the shares you buy back will just replace the ones you sold. And there's no guarentee that the market won't keep rising, then crash, but not back to the price it is today. Look, I see the point or the hope of the maneuver, I just don't see it's much of a point to gain---even if it all works out. If it were me, I'd do nothing with financial maneuvering and enjoy my retirement. And, as I'm retired too, that is what I'll do.
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Re: Cashing in on portfolio market gains
Good challenge and no I don’t have an IPS. So I will create one. May ask your investment breakdown for a 70/30 portfolio? Is is a 3-fund portfolio?MnD wrote: Tue Jan 21, 2025 10:41 pm Do you have a Investment policy statement? What does it say?
If you don't have one, why not?
What's special about cashing in the last 12 months?
Why not cash in the past 5 years or 10 years? Or maybe cash in the gains of last week.
What metric are you are using to determine the time period of gains to "cash in"?
I'm retired for 6 years now and my IPS is my signature below.
That's all I need.
Re: Cashing in on portfolio market gains

It's not market timing if it's a permanent reduction in the stock allocation. Or if it's an act of rebalancing out of stocks into bonds.LoveTheBogle wrote: Tue Jan 21, 2025 10:33 pm Sounds like a fantastic anti boglehead idea! Go ahead and try timing the market. Be sure to update the thread when you get back in.
Re: Cashing in on portfolio market gains
But OP has admitted they don't have a plan. They just see that stocks are high and want to cash in...selters wrote: Sun Feb 02, 2025 4:48 pm
It's not market timing if it's a permanent reduction in the stock allocation. Or if it's an act of rebalancing out of stocks into bonds.LoveTheBogle wrote: Tue Jan 21, 2025 10:33 pm Sounds like a fantastic anti boglehead idea! Go ahead and try timing the market. Be sure to update the thread when you get back in.
- dogagility
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Re: Cashing in on portfolio market gains
Using a phrase like "cashing in" sounds like the OP thinks investing is gambling.
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Re: Cashing in on portfolio market gains
Having just sold my house, I am glad I took "excess" profits (I was above where I had planned on being) a few years back and spent them on the house. I got to enjoy the improvements and then they helped sell the house. Folks could see it was updated and well taken care of.
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Re: Cashing in on portfolio market gains
This thread has been moved to the “Personal Investments” forum. Moderator Pops1860
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Re: Cashing in on portfolio market gains
Your plan might be okay as long as you promise to never buy back into the market unless you profit by the transaction by whatever measure you choose (choose ahead of time, that is.) That might be a long time. So what's your plan, in a quantitative sense?d2sutton wrote: Tue Jan 21, 2025 10:29 pm I am retired with a healthy IRA. I am considering cashing in gains from the past 12 months and placing the money in a money market fund. The purpose would be to have a cash reserve in my IRA to buy more shares during market dips. Since I am no longer contributing to the IRA, I have no other means of taking advantage of market declines. My dividends and capital gains are all reinvested. The IRA is my long term bucket. Thoughts?