So, when is the right time to sell off my unit trust?
The answer is “it depends“. And I will elaborate further below.
Table of Contents
[Disclaimer: I am not a certified financial planner. My sharing is purely based on my own research and personal experience. To make the best financial decision that suits your own needs, you must conduct your own research and seek the advice of a certified financial planner if necessary]
5 situations I consider the right time to sell off my unit trust
These are the 5 situations where I consider will be the right time for me to sell off my unit trust and redeem my cash:
1. The fund is not performing
The first reason is when the unit trust fund is not performing. It is important to give the unit trust fund sufficient time based on the fund factsheets.
Different unit trust has different risks, objectives and duration of time needed to show profits.
So, I am considering redeeming my unit trust investment when I had given sufficient time but if the fund is still not performing.
2. The fund performance does not meet my expectation
The second reason is when the fund is performing but the performance does not meet my expectation.
After holding the unit trust for some time and if I had given the fund sufficient time but if the unit trust performance still does not meet my expectations, I might consider cashing in or switching to other funds.
3. I found a better investment opportunity
If I found a better investment opportunity, I might consider redeeming my unit trust investment and investing it in the new opportunity.
Especially when:
- the unit trust fund does not perform
- the performance does not meet my expectation
- it involves high investment fees
In fact, I have done this in 2019 when I redeemed one of my unit trust investments and invested in StashAway Malaysia, a Singapore-based robo-advisor platform.
So far, I am happy with my StashAway Malaysia performance.
If I had maintained that particular unit trust, not only it is not performing but I might lose some of my profit made earlier due to the annual fees.
4. I made my goal profit
Since I made my first unit trust investment, Public Dividend Select Fund back in 2005, I have seen many up-and-down moments with my unit trust investment.
Looking at the unit trust performance chart, I sometimes regretted not selling the unit trust fund when the price was at its peak. But, who knows if the price will increase further, right?
Then I learned the importance of setting clear goals for a unit trust investment.
So, the next time a unit trust investment reached my goal profit, I am considering selling it and redeeming my cash.
5. I need the money
The last reason for me to cash in my unit trust investment is when I need the money.
This is the situation where I will not care how much the current unit trust price is, but I just want to sell it and redeem my cash.
I am aware this is not a good strategy because I should only invest the money that I do not need in the long term.
So, let’s hope I don’t need the money.
Final thoughts
At the moment, I am still holding the majority of the unit trust investment I started in 2005.
As time goes by, I learned that there are a growing number of opportunities to invest my money. Thus, I am also seeking other ways to grow my wealth.
Hopefully, an investment with lower fees and better return on investment.
How about you? When would you consider the right time to sell off your unit trust fund?
Image Credits
Image by Mediamodifier from Pixabay
