I’m another new investor having only started investing late last year. My S&S ISA contains a number of funds mainly covering the UK and US with a little bit in Asia. All of my US funds are with Baillie Gifford. They cover specific sectors, but are all very US Tech heavy and I expected some of them to be quite volatile.
Like a lot of people, I jumped on the bandwagon when US Tech stock started to rise rapidly. Though I only started investing towards the end of last year, I still made some decent gains. As we’ve seen US Tech stock descend, a lot of us have seen the value of our holdings fall as dramatically as they rose. My % growth for the year has gone from over 15% to less than 5%. Most of my BG holdings are now in the red. I would’ve sold them, but I didn’t react quickly enough. Though the temptation was there to cut my losses I think it’s better to wait for them to rise again, though I am prepared for this to take a long time.
Short term: As mentioned, most of my BG holdings are now in the red. Despite the funds being actively managed, it seems BG don’t dramatically change their holdings in response to market conditions, so any recovery may take a while. I expect I will continue to drip feed these funds to take advantage of lower prices. BG American was still blue, so I’ve sold it for now. I’ll hold onto the cash from it and try to buy back once it dips further. Unlike the other BG funds, I expect American will begin to recover much sooner.
Mid-Long term: My current mid to long term plan is to move away from higher risk funds. It’s likely I will keep a couple of the BG funds, but move away from the most volatile, reinvesting in something a bit more predictable and/or that diversifies my portfolio more. Ultimately, I want to get to a stage where I’m not looking at my portfolio every evening and I feel comfortable just to leave it to do it’s thing.
All in all, I feel those of us who started investing in the last year or so have been quite lucky. We’ve seen a lot of dramatic events happen in a short space of time and it’s been a valuable learning experience. It’s helped me work out what I want from my investments and what I’m able to tolerate in terms of risk. It’s also taught me not to respond to hype.
One of the main reasons I’m posting this is I’m seeing a few panicked posts about how poorly their investments are doing. As we all know, the value of investments fluctuate. Tim Hale says we’re our own worst enemy when it comes to reacting to stuff like volatile market conditions. It’s hard to be patient when we’ve seen huge gains and losses in a short space of time, but I’m of the opinion that there’s nothing to worry about and your investments will recover in time.
What does the sub think of my plan going forward? How have you responded to the drop in the value of US Tech stock?