It isn't necessarily "timing the market" to cash out gains after a historic, decade-long run. You don't have to get the top or the bottom exactly right.
I would classify cashing out as timing the market. I'm not saying it's a bad thing to sell at current prices, but who knows if we'll have another +25% year or a -25% year? My point is there's no reason to be fearful, just realize that it's all a gamble unless you have an edge.
"I would classify cashing out as timing the market."
Yes that was already clear.
"who knows if we'll have another +25% year or a -25% year? My point is there's no reason to be fearful, just realize that it's all a gamble unless you have an edge."
The point is, there's a lot more that you don't know. Maybe they just sold out at a big gain, knowing that the economic cycle is a real phenomenon, that interest rates are going up, and the yield curve just inverted. Maybe they were over-weighted in a single sub-sub-sector (FAANG tech stocks) that have had a spectacular run, and it's actually a good idea to diversify. Maybe they have plans for that money in a few years, and the recent sideways movement in the market is a good excuse to take gains. Horses for courses.
Even if you don't believe any of that, it isn't "market timing" to act on hypotheses, any more than it's market timing to sell a particular stock when the fundamentals change. You have no idea what the parent's situation or risk tolerance is, so criticizing with "don't time the market" is equivalent to "never sell", which is a comment with zero information content.
