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Learning, Sharing, and Teaching => Investor Alley => Topic started by: hgjjgkj on September 21, 2018, 08:24:45 AM

Title: Choosing what assets to sell
Post by: hgjjgkj on September 21, 2018, 08:24:45 AM
I have an opportunity coming up where I will need some money for a "major purchase" (~15k on a portfolio of 200K).

I am basically 85% SPY and the rest some more speculative ETFs in commodities and international equities. SPY of course is doing great, but I have some individual stocks up 50%, others down 20% for some perspective.  When thinking about how to sell to generate 15k, what should I do?

I could sell my most recent SPY purchases, create a small short term gain penalty, but lower my average cost. I could sell some of my down investments for the Tax loss, however I haven't really lost faith in any of my investments. I could also sell out of my best and only individual stock pick, but its Apple, and they appear to own an infinite money machine.

Any advice?
Title: Re: Choosing what assets to sell
Post by: MustacheAndaHalf on September 21, 2018, 09:12:07 AM
SPY is a great investment - check out SPIVA's data on how often it beats active management.  The S&P 500 beats about 80-85% of active funds over various time frames.

But then you invest in individual companies and speculations... just like an active fund.  In your brief overview, "commodities" sounds like the least appropriate investment.  Over decades, stocks tend to beat commodities.  I'd suggest selling commodities.  It might go up this year, but over the next 10 years SPY is much more likely to be a better investment.

It sounds like you're weighing this "$15k" "opportunity" against other investments.  Which leads me to believe this "opportunity" could be speculative as well.  If you can limit the amount of money you use to speculate, and index the rest, you'll avoid the pitfalls of being an active manager (80%+ of whom can't beat the S&P 500).
Title: Re: Choosing what assets to sell
Post by: hgjjgkj on September 21, 2018, 09:45:00 AM
I agree with you. This 15k is an investment in a family business where they are experts in the project. I personal believe the risk to this 15k is less than investing in a glamor stock. I think while yes in these parts all investments other than Total stock ETF is speculative, I do believe it is less risky than say loading up on TSLA or something.

So you would create a "pecking order" of:
Stocks at a loss or those that are overweight
ETFs that are at a loss that are not SPY