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What stocks to sell?
Old 04-22-2014, 04:53 PM   #1
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What stocks to sell?

I have 6 stocks that I own 3 are up 3 are down. I have some other stocks that I want to buy, So would I be better off selling the ones I'm losing or gaining on. The money I'm playing around with is only 3% of my portfolio.
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Old 04-22-2014, 05:04 PM   #2
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Whether you have a particular name at a gain or a loss is irrelevant. Sell the ones that have the least upside.
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Old 04-22-2014, 05:37 PM   #3
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This early in the year. I'd agree with Brewer. However, if you have stock which you've owned for less than a year and which is currently trading at loss, I think it is important to harvest any tax losses. This is especially true in Nov. and Dec.
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Old 04-22-2014, 05:40 PM   #4
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I have owned them for almost a year all six of them.
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Old 04-22-2014, 06:04 PM   #5
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Well if that is the case I'd be inclined to sell the losers. I figure a year's time is typically long enough to figure if my reasoning for buying the stock in the first place was sound.
Once you sell it you can buy it back in 31 days if you still think it is the best use of your funds.

If you have stocks which are up and it is close (<2 months) to qualifying for long term capital gains, it is almost always worth hanging on to them for until they've hit the 1 year mark in order to qualify for the much more favorable tax treatment.

Figuring out when to sell is part art, part science and a lot of discipline. In general before you buy stock you want to have a firm price target in mind. I think this stock that is selling for $50 is actually worth $80. When it gets to $80 you should generally sell unless something dramatically has changed that makes you think it is worth more.
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Old 04-22-2014, 06:10 PM   #6
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Clifp,
Thanks for putting it that way I just bought them playing around and now I didn't know how to get out. Now I have a much better idea thank you
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Old 04-22-2014, 06:12 PM   #7
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When you purchased these stocks, you should have beforehand WRITTEN DOWN the scenarios and prices at which you would buy, hold, sell or whatever. And that should have included both when they gained and when they lost money.

More amusing to me is that you haven't told us the names of the stocks nor the type of account they are held in. For example, there is no tax-loss harvesting in some accounts.
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Old 04-22-2014, 06:14 PM   #8
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I don't want to know the name of the stocks.. But if they are in IRA than most of my advice is irrelevant capital gains and such.
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Old 04-22-2014, 06:18 PM   #9
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Everything is in my Vanguard brokerage account.
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Old 04-22-2014, 07:51 PM   #10
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Everything is in my Vanguard brokerage account.
Which Vanguard brokerage account are you writing about? My spouse has a Vanguard brokerage account in her Vanguard IRA. One could have Vanguard brokerage account in their Roth IRA, traditional IRA, inherited IRA, joint account, individual taxable account, etc.

I recommend selling all the losers in order to avoid the loss aversion trap no matter what account they are held in.
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Old 04-22-2014, 08:00 PM   #11
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It's in my individual taxable account
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Old 04-22-2014, 08:29 PM   #12
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Based on what you have written, I would sell all 6 stocks and not buy anything again until you have learned up enough to a proper job of this.
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Old 04-22-2014, 09:06 PM   #13
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Now Now Brewer people have to start somewhere...

Buying 6 stocks at .5% of your portfolio is I think the perfect way to start. You can read all the books you want but at some point you got buy some stocks and figure out if buying individual stocks is right for you..

Hell the first thing I bought was when I was 16 were Chrysler bonds. I thought the 10% interest rate was terrific. I had no clue about credit ratings, call provisions, or how badly Merril Lynch fleeced individual investors to buy a couple of bonds back in the 1970s. But I learned when Chrysler was going struggling to avoid bankruptcy, that there was no such thing as a risk free investment that paid big bucks.

It is like what I tell beginning players learning to play poker. "There is no losing poker sessions, just different prices for your lessons".

The valuable lesson that Snow is learning is that successful stock picking requires being right twice, first knowing what and when to buy and second selling.

I suspect for most everyone selling is far more difficult than buying.
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Old 04-22-2014, 09:31 PM   #14
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Now Now Brewer people have to start somewhere...

Buying 6 stocks at .5% of your portfolio is I think the perfect way to start. You can read all the books you want but at some point you got buy some stocks and figure out if buying individual stocks is right for you..

Hell the first thing I bought was when I was 16 were Chrysler bonds. I thought the 10% interest rate was terrific. I had no clue about credit ratings, call provisions, or how badly Merril Lynch fleeced individual investors to buy a couple of bonds back in the 1970s. But I learned when Chrysler was going struggling to avoid bankruptcy, that there was no such thing as a risk free investment that paid big bucks.

It is like what I tell beginning players learning to play poker. "There is no losing poker sessions, just different prices for your lessons".

The valuable lesson that Snow is learning is that successful stock picking requires being right twice, first knowing what and when to buy and second selling.

I suspect for most everyone selling is far more difficult than buying.

If OP were close to the start of accumulation, I might agree. For someone at or near FI, this is not the case.
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Old 04-22-2014, 09:46 PM   #15
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sell two losers and double down on the one loser you think will rebound. Sell two winners and double on the one you like best. Use the proceeds from the other winner to research and choose a new investment.
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Old 04-23-2014, 12:06 AM   #16
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Another idea is to quit listening to random advice and make up your own mind.
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Old 04-23-2014, 11:02 AM   #17
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most people don't like hearing this
I just took some of this money to play with the see if I can do anything with it part of the gambling in me. I don't go to casinos anymore I thought this would be a good way to help me lol.
So now I found other stocks I would like to buy and I was needing some help what was the best way to do this.
Already sold off 2 of the losers
Thanks everyone
Snow
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Old 04-23-2014, 02:57 PM   #18
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I have not entered the individual stock arena, at times though one gets the idea that this or that company might be worth owning.
Any online reading or book recommendations to help one get a leg up on stock selecting/buying/holding/selling?

I remember my mega corp had an after hours investing club, everyone would research a stock and present it for consideration, is this a viable learning avenue that anyone has tried?

Here is one online article I found, the main thrust is don't bother.
You Purchased a Stock: Now What? | latticeworkwealth
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Old 04-27-2014, 07:38 PM   #19
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I would tend to agree with clifp. Sell any losers to harvest short-term tax loss write-off (full tax rate, assuming you are over 15% tax rate). Then keep any winners past 1 year so you pay long term cap gains at 15% rate. If you do both in this tax year, you can offset the profit with higher tax % advantage loss.
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