Author Topic: Just starting, should I sell shares in individual companies I own?  (Read 1650 times)

platosforms

  • 5 O'Clock Shadow
  • *
  • Posts: 5
Investing in the Vanguard Total Market Index Fund is what I want to do going forward, but I own shares in a number of individual companies and don't know if I should sell all those, some of them. In varying amounts, I own Apple, Disney, Costco, Tesla, and AOL. I think I definitely want to sell AOL and Costco, because the former has fallen while the latter's been pretty flat. The other three, though, are outperforming the S&P and I, personally, think they each have a bright future.

What are your thoughts? Should I go all in with the Vanguard Total Market Index Fund or hold on to these few companies, at least until they stop outperforming the market?


Cheddar Stacker

  • Magnum Stache
  • ******
  • Posts: 3714
  • Age: 41
  • Location: USA
Re: Just starting, should I sell shares in individual companies I own?
« Reply #1 on: July 25, 2014, 09:10:25 PM »
No no no. You bought them for a reason. If that reason is still valid hold it, at least until its a long term gain. Nothing wrong with identifying a few individual stocks and taking some risk. My only caveat would be if you are too heavily weighted in any one particular stock you should diversify.

Another Reader

  • Walrus Stache
  • *******
  • Posts: 5031
Re: Just starting, should I sell shares in individual companies I own?
« Reply #2 on: July 25, 2014, 09:12:53 PM »
In general, there is nothing wrong with owning a few individual stocks as a small percentage of your portfolio.  If you sell the losers and go with Vanguard in the future, you will learn a bit about market behavior from the stocks you keep.  For example, Tesla is what is called a "story stock" and will likely educate you about volatility.  If you invest in your tax deferred accounts at work, your IRA's, and your taxable accounts, eventually the individual holdings will be eclipsed by your fund holdings.  Those funds will do the heavy lifting for you.

MichaelR

  • 5 O'Clock Shadow
  • *
  • Posts: 52
Re: Just starting, should I sell shares in individual companies I own?
« Reply #3 on: July 26, 2014, 12:58:25 PM »


Owning individual stocks is not all bad but it is not the tried and true route to FI. Some experts in the market do well with this. Grunts like me will never do so. 

Whether to sell depends somewhat on where you are on the FI timeline. If it is a long way off then holding what you have is reasonable. Personally I would sell those that will return me a profit and put that in to index funds. I would keep the less profitable and hope they turn a corner at some point.