Should I sell all my shares and buy an ETF instead?

Investing and Markets 📈
1

I started investing in 2017 at the age of 24 and after a few years putting all my money into £VUSA, felt as though my knowledge of the market and the time I spent learning was leading me to pick individual stocks instead.

Since mid-2019, I have bought and sold various stocks, but with a core centred around:

Aviva £AV
GSK £GSK
Legal and General £LGEN
Sainsbury’s £SBRY
Unilever £ULVR

Over that time I feel I have done fine, with all 5 stocks in the green by: 16%, 7%, 4%, 47% and 5% respectively (dividends re-invested).

HOWEVER, with a growing family and waning interest in doing the research and number-digging, I don’t feel as though I have nearly so much time to do what is needed to stay on top of the game. As a result, I continue putting my money into (mainly) these 5 stocks, and mostly based on past knowledge (not ideal). I also know that the FTSE 100 (the market I have best knowledge of) is historically flat and I can’t see that changing in the short or mid-term as a whole.

As per the name of this thread, I therefore wonder if I’d be better off selling out of all my individual shares (they’re in an ISA so I wouldn’t be subject to tax) and buying, and then lumping my monthly budgeted amount, back into £VUSA, £VWRL, or something similarly simple and low-risk.

What would you do in my position?

  • Keep picking individual stocks
  • Sell it all and stick to ETFs
0 voters
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Given that right now £ is near historic low, you can use IWDG too for Developed market ETF. But it doesn’t mean that £ won’t go any lower. I personally do 50-50 between VWRL and IWDG.

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For me, this is key. There’s an opportunity cost with picking stocks. I’d rather spend time with family and friends than poring over reports etc.

Also, time spent on research in the hope of eking out a little outperformance can be better devoted to increasing earnings in my view.

But it doesn’t have to be black and white in terms of stocks vs passive trackers – you could also look at active funds or trusts to complement ETFs.

It’s a lot less of a timesink to select stock pickers. While many underperform, some do consistently outperform their benchmarks too.

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To second the excellent previous replies, with a growing family (jeez, I’m with you in that) spending time and emotional energy over individual stock picks makes little sense, in my opinion. Assuming you haven’t got a 20% credit card bill (I’m sure you don’t) max out your various tax reliefs in which ever way you want. I just do a few indiv stocks now, more out of interest and because I work (very roughly) in that market place so nice to know broadly what’s happening. ETFs are fabulous and low cost, but really dull!

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5

Most (if not all) of those 5 stocks are high dividend paying shares - I hold Aviva, GSK and LGEN in my dividend income portfolio.

Current dividend yields:
Aviva - 7.67%
GSK - 4.4%
Legal and General 8.78%
Sainsbury’s 4.91%
Unilever 3.74%

Most people hold these for dividends, not for capital growth so it really depends on what you want from your shares. The income can always be ploughed back in to the same share to grow the dividend but if you’re looking for capital growth, perhaps it is worth just selling and lumping it all in a global ETF like VWRL.

Good luck whatever you decide :slight_smile:

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Hmmm just my thoughts.

Maybe if you into blue chip stocks you could go for a hybrid approach.

Keep your current blue chip stocks and place new money into ETFs only.

At some point the ETF positions will far outweigh the stock positions.

A nice little 3rd option

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I do this in my SIPP. I have an internal rule that I only maintain ETF positions only in that account.

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I do agree though that ETFs are the good in between

If you don’t want to do robo investing and want to stick to DIY, but also your time is valuable and research for stock picking isn’t preferable of circumstances have changed than ETFs, and for some people preferences investment trusts might be a good in between option.

Also index funds deserve a mention as well

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SPXL - SPDR S&P 500
Invesco FTSE All-World [FWRG]
are cheaper than £VUSA, £VWRL

not sure if SPXL is available in the FT app
I’ve invested in FWRG

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Why not do both? I’m gradually rebalancing in favour of ETFs as I bought far too high a proportion of UK stocks at the beginning but I’m not selling any of my stocks other than reducing holdings in ones that I’m extremely over-balanced on, I’m simply buying ETFs with a view to the portfolio rebalancing over time. I’m buying mostly S&P500 but also some other ETFs as well such as USDV, GBDV to add onto the holdings I already have in FTSE, European and Emerging Market ETFs.

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