Sunday, January 26, 2020

Selling my losers

   This post is a continuation of the $50 a month stock challenge I started October 14, 2019.  Click on, "No Commission Stock Trades", on the right side of the page to read from the start.

 Yesterday I discussed the possibility of selling my Verizon (VZ) stock at a loss and my reasoning behind it. If Verizon does not recover, I will have to hold it over 2 more months until the next dividend.

     $0.61 dividend is about 1%, that is 1/2% a month or 25% of my monthly goal of 2% for every dollar I have invested in VZ.

     I make money in the stock market by buying and selling the ebbs and flows of the stocks I select and collecting the dividends where applicable.

     Selling stocks at a profit is easy, actually it is not as simple as that. Several factors must be considered, can I make more by holding longer, is my money better off in this stock as opposed to selling it and buying another, what are the tax implications, and the list goes on.

     Selling profitable stock strokes one's ego, "I TOLD you so". Selling losing stock  also strokes one's ego, "look, I am humble enough to admit I got this one wrong", but smiling as your account continues to climb.

     Give your trades a chance to recover but not to the detriment of achieving your goals. The true measure of your stock picks is the money you are making, nothing else matters.

     If you only sell your winners, pretty soon your portfolio will only contain LOSERS with no money to reinvest. Please re-read, as it is that important to your success!

     By selling your "under performers" (sounds better than losers)  while maintaining your goals, you will continual to have fresh money to invest in order to reach your goals. That is the old adage, "It takes money to make money".

     I wish I could buy only winning stocks but I am only human (some people I know will find that debatable) but as long as I achieve (or exceed) my goals, I am happy.

     It really makes no difference WHEN you sell a stock at a loss (a loss is a loss) but psychologically it helps when a charge-off (loss on a trade) is off-set by large enough gains to still achieve your goals.

     There is another side, "Keeping under performing dividend stock can be advantageous". We will save that for another discussion.

Disclaimer, I am not a professional.

your comments are welcome and appreciated.





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