What to do on a 'failing' portfolio?

[Arborbridge]

Yes, I am not sure how helpful GS's distinction between buying dips and buying shares that are falling really is. They both look the same on the way down, so how do know a dipper from a faller ahead of time?

He might as well advise to buy only shares that are going to go up in the future!

Finance is full of useful cliches, all of which mean nothing unless one has the ability to apply to judge when to apply them.

Maybe the one here is the wonderful "buy on the way down, sell on the way up".

Like cutting losers and backing winners - it isn't always obvious which is which until it is too late.

Arb.

[JohnW]

I think it goes beyond getting the timing right. It's picking which of the contradictory ones to apply.
'Back winners' or 'sell on the way up'?
'The trend is your friend' or 'nobody went broke taking a profit''?
'Buy low' or 'don't catch a falling knife'?
Ignore the lot?

[UncleEbenezer]

I have approximately £60k in ISAs that I would be willing to invest. I would be looking to use the money to buy a house in about 5 years.

In that case, I would stay out of the stock market. We could easily have a bad 5 years given the current valuations. "Appropriate research" does not help unless you know more than the collective wisdom of the professionals, or have access to important information that they do not (which is illegal). Buying HL's recommended funds is not a good idea either. HL does not know which active funds will do well, and neither does anyone else. You would have done better with a global tracker.

I stayed out and saved cash while saving for a house.

This was not a good thing to do. A couple of times I had a stint "between jobs", I had too much savings to claim benefits, and the savings vanished. Meanwhile house prices shot up.

After 25 years of that I found myself in a well-paid job and started investing "like a rich person" - not least, to save tax. The job didn't last long, but the investment did. Pretty soon my assets started to look much more like a real rich person: it was much easier to save £100k in the 2010s than to save £1k in the 1980s. Within five years, the dividend income from just one section of my portfolio (the VCTs - 20% of my total) was paying the rent in full with something to spare. After about ten years of investing I bought a house for cash - no mortgage. Though financially speaking I'd still have been better-off renting, as houses are still expensive compared to equities and the latter could've paid more.

I've had some successful single-stock investments (topped by ARM which twenty-bagged for me) when I've been very confident about a company. But far too many losers there - as in the OP's "failing portfolio". On balance I've done better in managed funds including ITs and VCTs, where I have a wide spread. The latter save tax and pay very high income which usually erodes the capital value - 'cos that helps maximise the tax advantages.

[Lootman]

I stayed out and saved cash while saving for a house.

This was not a good thing to do. A couple of times I had a stint "between jobs", I had too much savings to claim benefits, and the savings vanished. Meanwhile house prices shot up.

I recall thinking way back in the late 1970s that it was a folly to try and save to buy a home. The key was to borrow and then simply wait: 90% from the bank and 10% from the bank of mum and dad.

For example my first home purchase in 1978 had risen by 50% by the time I sold it just 2 years later. The next property only went up by 20% in 4 years but the one after tripled in 6 years. All gains tax-free of course. At least three subsequent properties gained threefold or fourfold. It used to be money for old rope.

Maybe it is different now but I cannot help but feel that if the strategy worked during double-digit mortgage rates then it should still work now. The average price for a London flat is now £550,000 or so. A 1% move is £5,500. Good luck saving that fast.