Okay, we all have stocks which are not doing well and stocks which are doing very well.
As I wrote before, for me it's always very hard to pull this trigger and sell my winner...
I know that lots of dividend stock investors think that we need to buy and keep stocks forever.
But observing my dividends stocks coming through ups and downs I still feel like I do need to sell my winners.
Like for example. I remember how just not long time ago my shares of KMI were $600 up and running strong. I was thinking to sell but got greedy.
Another recent example is FTR - went down to $3 in 2014, then up to $8 in 2015 and then down to $3 and now it's up to $5 again.
I did sold some of my stocks but usually right after I sell they would go up and then I would feel like oh, yeah, I could just keep them.
So my boyfriend suggested me an interesting idea - to sell only part of my stock total, which equal to the gain and keep initial amount I invested. This way if stock would go down, I already got some earnings out, if stock would go up, I would not feel as bad as if I sold all of shares.
I really like this idea and I might try to use it.
Greed is bad. Always take the gain if you're thinking of selling, gut instincts usually work. Over the last year, this stock has been on a downward trajectory and I don't see anything that would change. Citigroup downgraded this to a sell this month with a price target of $4. Frontier's revenue declined last year. If you have gains and need to offset them with a loss, I would take the loss. But that's only my opinion.
ReplyDeleteHello Anonymous, thanks for sharing your opinion. I think if I would sell losers it would be to offset winners sales and then buy back losers with hope they will come back one day... Best wishes.
DeleteIt's not a bad strategy at all to sell some and hold some. Just make sure not to forget that you can "average down" by selling all of it and then when it's at the bottom, you can by back in at the lower price ;)
ReplyDelete-Dividend Monster
Hello Dividend Monster, thanks for sharing your opinion! yeah, my initial strategy was to sell all of winners and then wait and buy again when they are down. Apparently, I didn't follow this one. Now I am trying to start with strategy # 2 - to sell some and will see how it works. Maybe one day I will be comfortable to sell it all and then wait and buy it again.
DeleteGood luck to you.
Why not use trailing stop loss orders? The order moves up as the stock moves up. If it begins to fall, you get stopped out. That way you lock in gains but don't lose the opportunity on the up side.
ReplyDeleteNot a bad way to go as you can harvest only the profits from each stock and leave the original invested amount to grow again in the future. Another way is to sell the original amount invested and keep only the profit invested. This way you are playing "with the houses money" and not your own should a dramatic decline occur. You know the saying, no one every goes broke taking a profit." Selling is not a bad thing, just rare among long term dividend investors.
ReplyDeleteHello DivHut, thanks for sharing your opinion. It might be a good idea too - to sell original amount invested, it can work for some stocks. Best wishes
DeleteBe careful selling partial positions as it can really be a pain come tax time. Luckily programs like Turbortax make it a lot easier but if you do them yourself it's a real nightmare.
ReplyDeletePersonally I don't plan on selling any of my winners, I'm an investor not a trader but I don't fault you for doing so at all. You have to do what makes you comfortable.
Hi Captain, thanks for your warning. I don't worry so much about taxes, I have an accounting degree and I used to work for HRBlock, so taxes are not a problem for me. Also some of my stocks in IRA and Roth accounts, so this would not even matter for taxes. But for the ones I sell with profit, I am thinking so sell some of losers to offset earnings and then buy them back in couple of months.
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