When to sell long term stocks? Coca Cola, AT&T, Seagate

[vinnybagodonuts]

I've held onto these stocks and am debating whether to hang on to them or just move the money into index funds. They have all been doing well and pay nice dividends. But at what point do you walk away? Also, when I see index funds making 30% the last year or two, it seems like a no brainer. The only reason I have kept them is really blue chip/ diversity and (hopefully) consistency in uncertain times.

At the same time I feel like for these 3 companies, they are all in industries that are drastically changing. I'm up between 10-15% in total on KO and T positions and about 250% on STX.

[dandarc]

Read the stock series, then get back to us with your decision. https://jlcollinsnh.com/stock-series/

[Rob_bob]

Well it kind of depends on the reason you had for owning them in the first place.  Do they still fit that purpose? What percentage of your portfolio do they each make up?  Too high a %, sell some.

Remember they don't have an expense ratio  :)

[ChpBstrd]

Now would be as good a time as any. Sell them by writing covered calls until they are called away. This way you get paid to sell. Then buy your index fund by selling puts until assigned.

[Xlar]

Obviously you sell them at the top ;)

But more seriously, this would be my logic: Would you buy them today? If yes, then keep them. If no, then sell them immediately and invest according to your IPS.

The only complication would be if you had a weird tax situation.

[vinnybagodonuts]

Read the stock series, then get back to us with your decision. https://jlcollinsnh.com/stock-series/

Thanks will definitely give that a read

[vinnybagodonuts]

Well it kind of depends on the reason you had for owning them in the first place.  Do they still fit that purpose? What percentage of your portfolio do they each make up?  Too high a %, sell some.

Remember they don't have an expense ratio  :)

They're really only there for diversification/safety stocks, but this might as well be an index I suppose. Only exception is STX which has obviously done very well, I'm just not sure about it moving forward.

[vinnybagodonuts]

Obviously you sell them at the top ;)

But more seriously, this would be my logic: Would you buy them today? If yes, then keep them. If no, then sell them immediately and invest according to your IPS.

The only complication would be if you had a weird tax situation.

I like that idea, I would not buy any of them today, not even because they are bad investments but because I think there are better opportunities.

[Buffaloski Boris]

Obviously you sell them at the top ;)

But more seriously, this would be my logic: Would you buy them today? If yes, then keep them. If no, then sell them immediately and invest according to your IPS.

The only complication would be if you had a weird tax situation.

I like that idea, I would not buy any of them today, not even because they are bad investments but because I think there are better opportunities.

There's a similar rule that I go by: if I wouldn't buy an asset that I own today, then when do I still own it?   

[EvenSteven]

Obviously you sell them at the top ;)

But more seriously, this would be my logic: Would you buy them today? If yes, then keep them. If no, then sell them immediately and invest according to your IPS.

The only complication would be if you had a weird tax situation.

I like that idea, I would not buy any of them today, not even because they are bad investments but because I think there are better opportunities.

There's a similar rule that I go by: if I wouldn't buy an asset that I own today, then when do I still own it?

Today?

[Buffaloski Boris]

Obviously you sell them at the top ;)

But more seriously, this would be my logic: Would you buy them today? If yes, then keep them. If no, then sell them immediately and invest according to your IPS.

The only complication would be if you had a weird tax situation.

I like that idea, I would not buy any of them today, not even because they are bad investments but because I think there are better opportunities.

There's a similar rule that I go by: if I wouldn't buy an asset that I own today, then when do I still own it?

Today?

"Why" I still own it might be because of tax reasons.  It would be silly to dispose of an asset 2 days before it qualifies for LTCG treatment. But yes. If you look at the price of something you own and someone will pay you more than you'd buy it for, then why not sell it today?  You have no idea if today is the highest price you'll get for it.

I owned a stock recently that I thought was a real bargain.  High dividend yield, nice profile.  Then the earnings call came.  The stock went down like a rock.  Then I got more information on the industry that I didn't have when I bought.  Looked like a real stinker.  The price went up and I noticed the spike. I offloaded it.  Took a loss, but I won't be riding it down.  I wouldn't have bought it at the price I initially bought it, nor would I have bought it at the price I sold it.   

 

[EvenSteven]

Obviously you sell them at the top ;)

But more seriously, this would be my logic: Would you buy them today? If yes, then keep them. If no, then sell them immediately and invest according to your IPS.

The only complication would be if you had a weird tax situation.

I like that idea, I would not buy any of them today, not even because they are bad investments but because I think there are better opportunities.

There's a similar rule that I go by: if I wouldn't buy an asset that I own today, then when do I still own it?

Today?

"Why" I still own it might be because of tax reasons.  It would be silly to dispose of an asset 2 days before it qualifies for LTCG treatment. But yes. If you look at the price of something you own and someone will pay you more than you'd buy it for, then why not sell it today?  You have no idea if today is the highest price you'll get for it.

I owned a stock recently that I thought was a real bargain.  High dividend yield, nice profile.  Then the earnings call came.  The stock went down like a rock.  Then I got more information on the industry that I didn't have when I bought.  Looked like a real stinker.  The price went up and I noticed the spike. I offloaded it.  Took a loss, but I won't be riding it down.  I wouldn't have bought it at the price I initially bought it, nor would I have bought it at the price I sold it.

You misunderstand me. I was making fun of your Russian to English translation. You asked "if I wouldn't buy an asset I own today, when do I still own it?"

[habanero]

Im currently divesting most of my single - name stocks and local market index fund. I do it in a methodical way. I buy an index fund, then the day after I sell what I am gonna sell. As I buy global funds and sell local market names, there is a time lag (our market closes shortly after the US opens) and as I get the end-of-US-day price for the funds I buy I think it's better to sell at earliest the day after rather than the same day to 1) reduce the timing risk and 2) market generally goes up so on average better to sell later than earlier.

I also sell a bit less then I buy, btw to increase equity holdings in general. Any dividends I receive from my local stocks are moved into a global index fund, so this over time reduces my exposure as well.

[Buffaloski Boris]

Obviously you sell them at the top ;)

But more seriously, this would be my logic: Would you buy them today? If yes, then keep them. If no, then sell them immediately and invest according to your IPS.

The only complication would be if you had a weird tax situation.

I like that idea, I would not buy any of them today, not even because they are bad investments but because I think there are better opportunities.

There's a similar rule that I go by: if I wouldn't buy an asset that I own today, then when do I still own it?

Today?

"Why" I still own it might be because of tax reasons.  It would be silly to dispose of an asset 2 days before it qualifies for LTCG treatment. But yes. If you look at the price of something you own and someone will pay you more than you'd buy it for, then why not sell it today?  You have no idea if today is the highest price you'll get for it.

I owned a stock recently that I thought was a real bargain.  High dividend yield, nice profile.  Then the earnings call came.  The stock went down like a rock.  Then I got more information on the industry that I didn't have when I bought.  Looked like a real stinker.  The price went up and I noticed the spike. I offloaded it.  Took a loss, but I won't be riding it down.  I wouldn't have bought it at the price I initially bought it, nor would I have bought it at the price I sold it.

You misunderstand me. I was making fun of your Russian to English translation. You asked "if I wouldn't buy an asset I own today, when do I still own it?"

Ha Ha!  Oh I miss glorious Russian humor!  I toast you with vodka Comrade!     

[UnleashHell]

Obviously you sell them at the top ;)

But more seriously, this would be my logic: Would you buy them today? If yes, then keep them. If no, then sell them immediately and invest according to your IPS.

The only complication would be if you had a weird tax situation.

I like that idea, I would not buy any of them today, not even because they are bad investments but because I think there are better opportunities.

There's a similar rule that I go by: if I wouldn't buy an asset that I own today, then when do I still own it?

Today?

"Why" I still own it might be because of tax reasons.  It would be silly to dispose of an asset 2 days before it qualifies for LTCG treatment. But yes. If you look at the price of something you own and someone will pay you more than you'd buy it for, then why not sell it today?  You have no idea if today is the highest price you'll get for it.

I owned a stock recently that I thought was a real bargain.  High dividend yield, nice profile.  Then the earnings call came.  The stock went down like a rock.  Then I got more information on the industry that I didn't have when I bought.  Looked like a real stinker.  The price went up and I noticed the spike. I offloaded it.  Took a loss, but I won't be riding it down.  I wouldn't have bought it at the price I initially bought it, nor would I have bought it at the price I sold it.

You misunderstand me. I was making fun of your Russian to English translation. You asked "if I wouldn't buy an asset I own today, when do I still own it?"

Ha Ha!  Oh I miss glorious Russian humor!  I toast you with vodka Comrade!   

In Russia you don't own the vodka, the vodka owns you!

[dandarc]

Obviously you sell them at the top ;)

But more seriously, this would be my logic: Would you buy them today? If yes, then keep them. If no, then sell them immediately and invest according to your IPS.

The only complication would be if you had a weird tax situation.

I like that idea, I would not buy any of them today, not even because they are bad investments but because I think there are better opportunities.

There's a similar rule that I go by: if I wouldn't buy an asset that I own today, then when do I still own it?

Today?

"Why" I still own it might be because of tax reasons.  It would be silly to dispose of an asset 2 days before it qualifies for LTCG treatment. But yes. If you look at the price of something you own and someone will pay you more than you'd buy it for, then why not sell it today?  You have no idea if today is the highest price you'll get for it.

I owned a stock recently that I thought was a real bargain.  High dividend yield, nice profile.  Then the earnings call came.  The stock went down like a rock.  Then I got more information on the industry that I didn't have when I bought.  Looked like a real stinker.  The price went up and I noticed the spike. I offloaded it.  Took a loss, but I won't be riding it down.  I wouldn't have bought it at the price I initially bought it, nor would I have bought it at the price I sold it.

You misunderstand me. I was making fun of your Russian to English translation. You asked "if I wouldn't buy an asset I own today, when do I still own it?"

Ha Ha!  Oh I miss glorious Russian humor!  I toast you with vodka Comrade!   

In Russia you don't own the vodka, the vodka owns you!

Pretty sure that is true everywhere.

[LetItGrow]

I've held onto these stocks and am debating whether to hang on to them or just move the money into index funds. They have all been doing well and pay nice dividends. But at what point do you walk away? Also, when I see index funds making 30% the last year or two, it seems like a no brainer. The only reason I have kept them is really blue chip/ diversity and (hopefully) consistency in uncertain times.

At the same time I feel like for these 3 companies, they are all in industries that are drastically changing. I'm up between 10-15% in total on KO and T positions and about 250% on STX.

Do you have dividends reinvested? I at least took that step and route them to index fund (vtsax)

[vinnybagodonuts]

Im currently divesting most of my single - name stocks and local market index fund. I do it in a methodical way. I buy an index fund, then the day after I sell what I am gonna sell. As I buy global funds and sell local market names, there is a time lag (our market closes shortly after the US opens) and as I get the end-of-US-day price for the funds I buy I think it's better to sell at earliest the day after rather than the same day to 1) reduce the timing risk and 2) market generally goes up so on average better to sell later than earlier.

I also sell a bit less then I buy, btw to increase equity holdings in general. Any dividends I receive from my local stocks are moved into a global index fund, so this over time reduces my exposure as well.

I recently also stopped automatically reinvesting dividends and instead am using the money now for investments I actually want/ mostly index funds. Didn't dawn on me until you mentioned that this is also a way to gradually reduce exposure.

[vinnybagodonuts]

I've held onto these stocks and am debating whether to hang on to them or just move the money into index funds. They have all been doing well and pay nice dividends. But at what point do you walk away? Also, when I see index funds making 30% the last year or two, it seems like a no brainer. The only reason I have kept them is really blue chip/ diversity and (hopefully) consistency in uncertain times.

At the same time I feel like for these 3 companies, they are all in industries that are drastically changing. I'm up between 10-15% in total on KO and T positions and about 250% on STX.

Do you have dividends reinvested? I at least took that step and route them to index fund (vtsax)

Yes I recently started doing this as well, it makes much more sense.

[keyvaluepair]

Do you have an Investment Plan (IP)? What does it say? If not, make one (https://www.bogleheads.org/wiki/Investment_policy_statement).

In my case, I've still got a large exposure to MSFT due to years of Employee Stock Purchase Plan and I have been DCA'ing out of it into VTSAX and hence keeping equity exposure constant. I rebalance quarterly according to my IP (60/40 equity/intermediate bond mix).
 

[BobTheBuilder]

Now would be as good a time as any. Sell them by writing covered calls until they are called away. This way you get paid to sell. Then buy your index fund by selling puts until assigned.

Now thats a good idea. Smart and simple. Will do that with company stock once the number of stocks I got with employee discount increase to a significant amount.

[hodedofome]

Do you have an Investment Plan (IP)? What does it say? If not, make one (https://www.bogleheads.org/wiki/Investment_policy_statement).

In my case, I've still got a large exposure to MSFT due to years of Employee Stock Purchase Plan and I have been DCA'ing out of it into VTSAX and hence keeping equity exposure constant. I rebalance quarterly according to my IP (60/40 equity/intermediate bond mix).

Personally I would keep the MSFT stock. New CEO is doing well. They have a good plan and have been successful at migrating their customers to subscription and cloud. As long as this bull market is around, MSFT is a good one to hold IMO.

[hodedofome]

I've held onto these stocks and am debating whether to hang on to them or just move the money into index funds. They have all been doing well and pay nice dividends. But at what point do you walk away? Also, when I see index funds making 30% the last year or two, it seems like a no brainer. The only reason I have kept them is really blue chip/ diversity and (hopefully) consistency in uncertain times.

At the same time I feel like for these 3 companies, they are all in industries that are drastically changing. I'm up between 10-15% in total on KO and T positions and about 250% on STX.

There are stocks that have been around for years and were once very good buys. However, tastes change and technology is eating away at established businesses. If the old companies don't adjust (or buy those up and coming companies who are eating away at their business), then the old companies can be a sell IMO.

Look at retail stores. Online ecommerce is really hurting their business. Any retail store that loaded up on debt expecting the good times to last forever, are going out of business left and right. Only the ones with little debt will remain, but their sales will suffer.

Look at dairy farms. Tastes have changed, but even worse - technology is coming (and here already) that can create plant based meat and we may be able to create milk without needing a cow. If you own a dairy or cattle farm with a lot of debt, you may be out of business in 5-10 years.

Look at coal. Natural gas is getting pretty cheap, oil is getting pretty cheap, and the desire for fossil fuels is going out the window for a good chunk of the world population. Renewables are getting cheaper. Debt laden coal miners and utilities are going out of business left and right.