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Take profits?

Discussion in 'Investing Strategies' started by Haumea, 2nd May, 2018.

  1. Haumea

    Haumea Member

    18th Apr, 2018
    Hi all,

    My better half and I have a small portfolio of shares (just 6 US companies) in an SMSF. Now it's coming up to the annual anniversary of buying them and they have performed pretty well. Worst share performance was 4.5% over the year (Facebook), sold that one before the data scandal hit. I notice FB now above our sellling point, ha!

    Anyway the others that we still hold are all sitting at minimum 30% gain. I appreciate this is pretty good going, but it's making me nervous as well (too good to last).

    So much is written in the financial press and mainstream media about stock picking, asset allocation, short term trading. Very little about the situation I face - how to preserve the profits. I've thought about trailing stops, selling part of each share parcel, pulling initial investment out and letting the "gains" run forever. Then the problem is where to put that cash...and round I go again, analysis paralysis.

    Also I sometimes think that maybe I shouldn't mess with a good thing. But back in the 2000 tech wreck I just held on, and lost a substantial amount.

    So I'm throwing the question out there - anyone lucky enough to have good gains, how do you manage them?
    twisted strategies likes this.
  2. Hodor

    Hodor Well-Known Member

    17th Sep, 2016
    Maybe look at the core and satellite portfolio concept.

    You would have core holdings in low cost diversified funds/ETFs and then satellites where you stock pick. You never sell your core positions so only limited types of investments are suitable

    If you want to protect capital you need to sell some of what you have. It will possibly not provide the best $ outcome (then again it might), that's why it is important to have a plan you can stick to.
    twisted strategies likes this.
  3. Hosko

    Hosko Well-Known Member

    25th Sep, 2016
    If you forget what price you purchased at and the current profit levels, what would you do with the stocks at current levels?
    If you had the cash would you be buying the stock? Would you not go near the stock because it is overpriced? The answers to these may give you an idea what you might do.
    And nice work.
    Hodor and twisted strategies like this.
  4. twisted strategies

    twisted strategies Well-Known Member

    3rd Nov, 2013
    my opinion might not be so helpful to you , but

    before i buy a share one hurdle i set myself , is do i want to hold ( some of ) that share forever .. if no , i look elsewhere
    i MIGHT break that rule chasing the CBA spin-off Colonial First State ( keep then Colonial sell the CBA say 3 years later but i am still wrestling with that one

    what do you call 'share performance ' i consider div. returns more important than share price movements ( within reason )

    next do you need to sell all that share ( instead of sell some, keep some )

    i look for ( roughly 120% gain then try to sell 40% and keep 60% .. obviously better if i can do it )

    nice result so far, just the same

    but maybe your plan needs better definition to work better for you

    buying and selling yearly will make your broker rich , but what about you ??
    are you happy basically trend trading ( not a bad style but does it suit you ... and whatever suits you is the right answer )

    good luck