“Should I take some profits?”
It is one of the most common investor questions, usually asked when markets have been kind for a while.
It feels sensible — no one ever went broke taking a profit, as the saying goes. But if you sell too soon, you can quietly strangle your long-term returns.
Knowing when to take profits is not about predicting markets, it is about following a process.
Humans love to feel in control. Selling after a gain gives a quick burst of satisfaction and the illusion of good timing.
The problem is that investments do not move in straight lines. The best days often follow the worst ones, and stepping out at the wrong time can mean missing the compounding effect that drives real wealth creation.
The best way to take profits is systematically, not emotionally.
Rebalancing achieves this by trimming what has grown and topping up what has lagged.
If equities outperform bonds, you sell a little of your winners and reinvest in underperformers to restore balance.
This keeps risk in check and turns volatility into opportunity.
It feels counterintuitive, but that’s the point — it removes emotion from the process.
There are valid reasons to sell:
You need the money for planned spending or retirement income
Your risk tolerance or life goals have changed
A position has grown too large and dominates your portfolio
Tax-year planning, using capital gains allowances or rebalancing between wrappers
Taking profits is not wrong when it serves a purpose. It is only wrong when it serves your ego.
If your plan is long-term, and your portfolio remains aligned with your goals and risk level, there is often no reason to touch it.
Doing nothing can be the most powerful move of all.
Remember, investing success rarely comes from action, but from patience.
Sarah invested £100,000 in a global equity fund five years ago.
It grew to £160,000. She felt tempted to “take profits.”
Instead, she rebalanced — selling £10,000 to top up her bond fund.
When markets dipped the following year, her balanced portfolio fell less sharply, and she reinvested at lower prices.
Over time, she benefited from smoother returns and lower stress.
Taking profits is not about timing markets, it is about maintaining structure.
Use rebalancing, not emotion, to guide your decisions.
The best investors are not those who trade the most, but those who trust their plan the longest.
If you would like to review your portfolio structure and see how to manage gains efficiently, book a 20-minute investment review with The Wealth Coach.
Nic Round is a Chartered Financial Planner and Chartered Wealth Manager, authorised and regulated by the Financial Conduct Authority.