Are we getting close to market correction?

Mark - my current strategy is based around the fact that I'm very over allocated to one or two funds, and I'm using the returns of those funds (both income and growth) to increase my holdings in other funds to balance my portfolio.

Once I've built up my overall portfolio to where I want it, I will then continue to cream off the profits, but this time I will use the proceeds to invest in more real estate.

Once I've got my real estate holdings to where I want them, I will probably start taking the profits and pay down my debt levels a bit further, so I can maintain a lower LVR overall.

Then once I'm comfortable with how that's all going, I will probably start all over again, increasing my fund investments within my new, lower LVR levels. Then more property, then pay down debt, then more funds at a lower LVR, etc etc.

But in general with selling off some of the funds - it's not much different to Steve's strategy with the NavraInvest funds ... sell when it's up, and buy when it's down. Lock in some profits, and take the opportunities to buy back in cheaply when the market softens.

The key is that I'm only selling off a set percentage of my holding in that fund (5 - 10%, depending on the fund), I'm not liquidating the entire fund ... so I still get most of the benefits of future growth.

 

... but I'm not trading individual shares here ... I'm investing in managed funds. I'm investing in funds that I believe will continue to perform well in the long term, even if there are market downturns in the short term that hurt returns.

As such, I'm not about to sell out of a fund to "cut my losses short" if I still fundamentally believe that there is a reason to be in that fund. Rather, I will be taking the opportunity to buy more and increase my returns when it DOES go up.

I don't need to manage the risk as much, because I'm not investing in a single stock, I'm investing in a fund which has exposure to a lot of stocks and does most of the risk management for me !!!