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Individual Stock Portfolio Investment Planning

Summary:
Early last year when studying my portfolio I decided my two biggest positions (Apple and Google – those ready the blog won’t be surprised due to my 10 stocks for 10 years posts) continued to warrant the large portion of the portfolio they held. I also decided that I would systemically sell say 1% of Apple and 2% of Alphabet a year (the Apple dividend was also paying about 1% – actually it was more then but is much less now). That was just a long term plan that helped me think about the long term portfolio management. But that, like all investment decision, was subject to revision. As both continued to soar I decided it made sense to sell more but maintain a similar plan, just maybe selling 2% and 4% a year (or something). Basically I still like them as investments. I still feel

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Early last year when studying my portfolio I decided my two biggest positions (Apple and Google – those ready the blog won’t be surprised due to my 10 stocks for 10 years posts) continued to warrant the large portion of the portfolio they held. I also decided that I would systemically sell say 1% of Apple and 2% of Alphabet a year (the Apple dividend was also paying about 1% – actually it was more then but is much less now).

That was just a long term plan that helped me think about the long term portfolio management. But that, like all investment decision, was subject to revision. As both continued to soar I decided it made sense to sell more but maintain a similar plan, just maybe selling 2% and 4% a year (or something).

Basically I still like them as investments. I still feel both companies long term prospects are excellent. I do also feel both are pretty richly valued. They certainly do not seem to be the huge bargains they were 15 years ago. At first my main reasons for slowly selling some was mainly that the portions of the portfolio were growing a bit too high. At this time, that has become even more true. But also the prices are also getting very rich. Selling at these prices seems pretty attractive.

At these prices if I sold more now and then prices decline I can have already cashed in my planned yearly sales (based on my original plan) and therefore could hold off for several years (instead of selling at those reduced prices). And if the prices continue to go up, well I still own a lot of them and so I will profit handsomely in that case.

I have a new 2nd largest holding – Sea Limited ($SE). It is a Singapore based company that I am very high on for the long term. I bought a fair amount, all in that last year. But nowhere near enough to be my second largest holding. However my originally purchases were in the $50s and $60 and today, less than a year since my first purchase, it is at $217. It is a richly valued stock but I believe the potential is still very promising I have no plans on selling any of this anytime soon. It is volatile, it is down 5% today.

It is useful to think about the long term and even to make tentative plans. But, as an investor, adjust those plans as conditions change. I see such plans as helpful thoughts and reminders, not plans to follow automatically.

I do continue to find that the existing prices in the market make finding great investments difficult. I am normally very “over-invested” in the stock market. I have been trying to reduce how over-invested I am. I am doing that a bit less successfully than I would like. But I am raising some cash. I do remain over-invested, which is fine for me, but I also am a bit more over-invested than I think is warranted. I will continue to try to raise some cash. It is a bit difficult for me as I am naturally drawn to make investments when I see available cash to invest.

Related: Retirement Portfolio Allocation for 2020Long Term Changes in Underlying Stock Market Valuation


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