Should i withdraw investment from robo-advisors after earn a certain amount and invest again?

I am investing in etf and unit trust via robo-advisors for a few years. I have a return of $3000 totally for two robos.

Should i withdraw the investment from them after earn a $3000?

This is to avoid when economic is bad, the return is $0 or lower than $3000. If i withdraw after i gain a certain amount, i can ensure at least i earn some money in a certain years.

After withdraw, i will immediate invest all including the return after receive the fund.

What do you think?

3

Discussion (3)

What are your thoughts?

Learn how to style your text

Jared Lee

16 Sep 2021

Finance at Murdoch University

No, that's called trading and you're timing the market which defeats the purpose of the robo.

How sure are you that you'll be able to time exactly the market top/bottom? sell today and in the next month equities could gain another 5% and you'll lose out on the gains.

When the markets are bad, just invest more (or the same amount and you'll get more units anyway) because based on historical data, it has been shown that equities are up about 80-90% of the time. So it pays to have a long bias and a long-term horizon.

One strategy if you really really really want to lock in those gains, just sell and cover your cost basis:

I.e Initial investment of $1K, now your total investment is $2K, just sell $1k to cover the initial amount you put in and keep the $1k invested. Slight downside protection while still having some exposure.

Disclaimer: Not investment/trading advice, do your own due diligence

Reply

Save