Here's the problem. You
bought a stock many years ago that is now worth 10 times what you paid
for, but in the last 5 years rate seems to be super glued to the wall. You've always been a proponent of "buy and hold" and this file seems to bear out the wisdom of that strategy. But now you're not sure - maybe it's time to move on to something else.
The question you keep asking yourself the same question thousands have asked before - when I know that this powerhouse has run out of gas and it's time to sell?
Here's needed some help with both sides of the coin:
1. "Buy and Hold" does not mean "till death do us. "Every investment strategy consists of three basic components:.. Buying, spacious, and selling Obviously, you buy and hold parts worked well, the stock was a good choice and has significantly increased in value, despite what probably some volatility along the way. It seems like you've gotten out of the "growth" phase of the Security With the lackluster performance of recent years, the stock may have matured and simply will not repeat its past performance as Paul Simon would say.. "Time to to sell, Nell. "
2. Is there a dividend yield is high enough to preserve the security? Figure out your dividend yield based on your original purchase price. If the 5% or more, which is not a bad annual return for a high security with a future appreciation potential. A company that has a record of dividend increases is more reason not to sell.
3. You know if the price decreases not above move, bragging of your average annual return. If you are up 200% on a stock of more than 5 years, boast an average 40% average annual return makes for a good story. If you're still an increase of 200% in 10 years, in all likelihood someone a better story.
4. Something overheated has a cooling off period. After a long run, the weekly closing price of a share sometimes within a few percentage points below the average volume. According to technical analysis, as this takes time, the stock can easily form a new base price. With an increase in the volume, the stock may "break out" and continue to rise. In the event that the share price falls (especially in the latter stage bases), since this is a danger sign could mean institutional money is moved away from the stock.
5. No matter how much you want, you can not change society change. Change in business fundamentals, management and business strategy can all affect the price of a stock. Sometimes it's a change for the better, sometimes not. You have to realize that nothing you can do will change this change. Sentimentality does not have much space in the stock market. If the foundations are not what they used to be, then that's the way it is. Look at yourself in the mirror.
6. Tell the truth - this is really all about the capital gains tax? We all like to play with ourselves, psychological games so do not be ashamed to admit it. If you add your net worth on paper, it looks higher than before tax after tax, right? Unless you plan to die with all your paper profit on the "step up" in basis to receive, recognize the difference between a game and reality.
If you're on the fence about whether to hold or sell, take the time to explore your options and decide your best course. Indecision will get you nowhere.
Glenn ("Chip") Dahlke, a senior contributor to the Living Trust Network, has 28 years in the investment business.
He is a Registered Representative of Linsco / Private Ledger and a principal with Dahlke Financial Group. He is licensed to securities transactions with persons who are residents of the following states: CA. CT, FL, GA, IL. MA, MD. ME, MI. NC, NH, NJ, NY.OR, PA, RI, VA, VT, WY.
The question you keep asking yourself the same question thousands have asked before - when I know that this powerhouse has run out of gas and it's time to sell?
Here's needed some help with both sides of the coin:
1. "Buy and Hold" does not mean "till death do us. "Every investment strategy consists of three basic components:.. Buying, spacious, and selling Obviously, you buy and hold parts worked well, the stock was a good choice and has significantly increased in value, despite what probably some volatility along the way. It seems like you've gotten out of the "growth" phase of the Security With the lackluster performance of recent years, the stock may have matured and simply will not repeat its past performance as Paul Simon would say.. "Time to to sell, Nell. "
2. Is there a dividend yield is high enough to preserve the security? Figure out your dividend yield based on your original purchase price. If the 5% or more, which is not a bad annual return for a high security with a future appreciation potential. A company that has a record of dividend increases is more reason not to sell.
3. You know if the price decreases not above move, bragging of your average annual return. If you are up 200% on a stock of more than 5 years, boast an average 40% average annual return makes for a good story. If you're still an increase of 200% in 10 years, in all likelihood someone a better story.
4. Something overheated has a cooling off period. After a long run, the weekly closing price of a share sometimes within a few percentage points below the average volume. According to technical analysis, as this takes time, the stock can easily form a new base price. With an increase in the volume, the stock may "break out" and continue to rise. In the event that the share price falls (especially in the latter stage bases), since this is a danger sign could mean institutional money is moved away from the stock.
5. No matter how much you want, you can not change society change. Change in business fundamentals, management and business strategy can all affect the price of a stock. Sometimes it's a change for the better, sometimes not. You have to realize that nothing you can do will change this change. Sentimentality does not have much space in the stock market. If the foundations are not what they used to be, then that's the way it is. Look at yourself in the mirror.
6. Tell the truth - this is really all about the capital gains tax? We all like to play with ourselves, psychological games so do not be ashamed to admit it. If you add your net worth on paper, it looks higher than before tax after tax, right? Unless you plan to die with all your paper profit on the "step up" in basis to receive, recognize the difference between a game and reality.
If you're on the fence about whether to hold or sell, take the time to explore your options and decide your best course. Indecision will get you nowhere.
Glenn ("Chip") Dahlke, a senior contributor to the Living Trust Network, has 28 years in the investment business.
He is a Registered Representative of Linsco / Private Ledger and a principal with Dahlke Financial Group. He is licensed to securities transactions with persons who are residents of the following states: CA. CT, FL, GA, IL. MA, MD. ME, MI. NC, NH, NJ, NY.OR, PA, RI, VA, VT, WY.
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