Investment withdrawal advice please :)

[MinesaTomCollinsplease]

Hi all, looking to ask for advice from the knowledge and experience on here.

I have some money in an investment fund. It's gained over the last few months or so. I know that investing is a long ball game but could I withdraw the gain from the fund, leaving the original sum plus what it would have accumulates in a savings fund? I hope that makes sense.

I'm looking to protect the gain that's been made.

Any advice would be gratefully received.

Thank you.

That depends what wrapper you hold the fund in. You probably can, but it's not a particularly good strategy.

Thank you for taking the time to respond. I will look into that aspect.

Yes you can but depending on your circumstances and how much you withdraw you may have a capital gains tax bill if it’s not in a wrapper

You are missing out on the benefits of compound interest if you do this.

Yes but there will be a potential CGT implication if it wasn’t in an isa and if it is in an isa then it’s a bad move unless you transfer it into a cash isa.
i actually sold all of the US bonds in my portfolio last week and moved the money into my cash isa instead. They were crap investments anyway and I don’t want to directly support the US government,

I know it's tempting to 'protect the gain' but it's not a great strategy for long term growth. If you keep the capital the same size, compounding will not have as much of an effect as if you leave it alone and let it do its thing. Rebel Finance School is great for explaining the power of compounding.

Thank you all for explanations and advice - this is much appreciated.

The recommendation is useful thank you.

This has some good explainers, too. https://www.thefireplace.info/wiki/Main_Page although they've not covered compounding yet.

Thank you for the further recommendation:)

There’s a saying…

The best investors are dead investors.

This means the best investors do not buy and sell frequently. They buy and hold. and hold. and hold. You just have to learn to live with the ups and downs.

Yes but at some point you might need it. I actively de risk money I might need in the next 5 years. It depends on a lot of things.

I actively de risk if I can see issues emerging but I follow my portfolio daily.
I withdrew my US bonds deliberately due to the US actiions over Greenland - partly because due to them forming part of various ETFs for “stability” I had a fairly large holding proportionately which wasn’t great for my portfolio anyway, partly because if I wanted security I can get a better return shifting that bit into my flexible cash isa but mainly because I feel very strongly that we shouldn’t just go along with appeasing Trump.

Technically, you cannot just take the gain. You would have to sell all of your investments to realise all of your gains. This doesn’t matter if you want to move into cash anyway.

You can however, just sell an amount of units/shares that represent the value of your gain - but your actual gain will only be the difference between the purchase and the selling cost.
Effectively, it is the same but your actual gain will only be a proportion of the sale price and potentially less tax will be due.