My portfolio since ME was introduced

  • First off, apologies this is a long post. It's also a bit rambling. If you can't be bothered to read it all, the main point is that the ME probably isn't as bad as I first feared, but it's still not for me. It's sufficiently not for me that I'm taking the majority of my money out of FI.

    So about a month ago I said in a post that I felt the changes brought in with the ME had made FI a little too risky for my tastes. I also said I was looking to de-risk by selling about 75% of my portfolio over the next three months, essentially bringing it down from £16K to around £4K.

    I've now had around 50% of my portfolio up for sale for around a month and I've been able to sell and withdraw £4.5K. So pretty much on track for a 75% reduction over 3 months. All of these sales have been to the Market, not via the Instant Sell option.

    Obviously there are some players that just aren't shifting and I probably need to accept that I'm going to have to IS them at some stage. Probably after the selling side of order books gets introduced. However some players have proven to be pretty easy to sell at Market Value, although still harder than before.

    I suppose the point of this post is just to share my experience in trying to shrink my particular portfolio (I appreciate that every portfolio is unique, mine was mainly focused on top and mid price players with very few bottom of the barrel punts) and take money out. It's not been great, but it's not been awful either, much like many things in life both the doomsayers and the boosters aren't correct and the middle ground is probably right in most instances. I would however say that 3 months seems about right to sell a portfolio of this size without taking a huge hit (although the introduction of Goal Keepers may throw a spanner in the works). Something that people now need to keep in mind when putting money in.

    For me FI is too illiquid to have a large sum of money tied up in it. It's a shame as the withdrawals I've made now have my actual investment in FI at £2.5K, while my portfolio has a Market Value of £12K, so I've obviously done very nicely. Even recently, my return solely on dividends in the last 90 days is 2.28% (so 9.14& over a year). Way higher than I can get elsewhere, but I'm not in a position to be able to have £16K I need to give 3 months notice to be able to access. £5K is probably about the level I'm comfortable at. If the level of liquidity rises considerably with the introduction of sell orders I may look at reinvesting, although I'll be honest my confidence in the product as a whole has been shaken by the number of rapid changes we've experienced.

    Take from this post what you will. To get me to reinvest of a larger scale I suppose I'd be looking for better stability in terms of the rules and better liquidity in terms of the ability to cash out. However I appreciate that these things may not accord with FI's business model and I may just have to accept that for me personally FI isn't for me anymore, although I will keep a small interest in it.

    For those of you who stay the course, I'm sure you will be rewarded long term. All the best.

  • Excellent post thanks, and hopefully helps counter the common argument that “market selling isn’t possible any more”.

  • @GDS i have had similar experiences as yourself using market sell. Ive managed to sell many players via market sell since the introduction of ME and in some cases i have bought on ME and sold back to market within 48hrs. T has however got harder as time has went on because money is getting trapped. Selling to market is still very much possible though it just takes longer than before and is very dependent on the player you are trying to sell.

  • I do get where you are coming from, one of the things I loved most about FI when I started was I could get out at any moment - a small fee with IS, now its not an option. You have to time your outs like a smash and grab now.

    Any money I invest on the index now is money I "ring fence" and will not need access to anytime in the near future almost forgoten about, before hand I almost looked at it like a fancy bank account lol.

  • @Kanzz

    Yes that's 100% my stance. The small amount I'll be keeping in here is pure profit and play money.

    I need a bit more liquidity with the rest, partly because I'm self employed. While I've actually been able to keep working throughout lockdown I'm expecting the work to dry up a bit as the long term economic reality bites and I need to make sure I can access my reserves in a reasonable timeframe.

  • @GDS Know exactly where you are coming from bud, Ive been thinking about similar issues myself and the comming economic problems ahead of us.

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