Here’s a fun scenario:
You thought a home purchase was years off. You had nothing to fear in the markets and so invested aggressively in volatile stocks for maximum growth.
Fast forward a year and you look into options like shared ownership, a family gift, haggle a pay rise, the savings your Grandma put aside for you… it might just be possible. Heck, maybe you could even bargain-hunt a spare room to let out for another income stream.
But a decent chunk of your deposit is in risky stocks. You could be making an offer in a week, or maybe six months to a year.
How would you go about liquidating cash from your portfolio?
My personal view:
Focus on the GIA since ideally you want to keep the ISA allowance you’ve filled. Start selling off stocks that have performed well so you make an instant return. Prioritise those that have gone ex-dividend. Consider the upside/downside risks of more volatile stocks.
But what then of the tech stocks? The Tesla, Google, Facebook, Palo Alto Networks that could rocket or tumble in the coming months? Do you keep the winners and cut losses on the losers or vice versa and hope for a reversal? What then when you have a pile of cash to sit on over the winter? Would you be comfortable with a lower-risk ETF for that period of time?