I’ve always found that buying stocks is easy while selling them requires tough decisions. I mean; when they are underperforming, you hope that they will bounce back. And when they are outperforming, you will continue to surf the wave and become greedy. On Monday, I told you what I will do with my underperforming stocks. Today, I’m looking at stocks that have been good for me so far.
In my portfolio, I have 3 stocks that have been particularly good so far (click on their name to get my previous analysis):
Chevron (CVX): +15.27%
Intel (INTC): +25.85%
Telus (T): +4.01%
The decision of selling a stock to cash in its profit and move it is a very tough one. Personally, I’m having more difficulties selling a performing stock than taking my loss and moving forward (as I did with RIM last year). As is the case for underperforming stocks, you can also set a limit in the profit you are willing to cash out and look for another profitable trade. For example, I could decide to sellINTC because it went up by more than 20%… but I won’t… because I would rather take a closer look at the future potential of a stock. Basically, I’m doing as if I was going to buy it today.
So let’s take a closer look at each of them to see if I should sell them or not.
Chevron CVX
CVX is obviously linked to oil prices. I’ve mentioned Monday that we expect another rocky year in this field but I think that it will still be a winning sector. At the first sign of economic recovery, this is the kind of stock you want to have in your portfolio. It’s a great dividend payer that will pay you to wait on the sidelines and will reward you with more added value during economic booms. I think we are closer to a growth cycle than a recession in the States and this is why I’m keeping CVX.
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Decision: CVX is a keeper.
Intel INTC
INTChas surprisingly posted high growth profits in 2011 and I think it will continue to perform well. Their first success in entering the tablet and smartphone industries could lead to interesting market shares in the future. With a great dividend payout combined with interesting markets to develop, I thinkINTCwill continue to grow in 2012.
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Decision: INTC is a keeper
Telus T
Telus results have been good and had confirmed a recent dividend increase (as previously announced by the board). The telecom industry inCanadaseems to be in a pretty good shape (bothBCEand Rogers have done well lately). With a 4% increase, it’s not the end of the world (mind you, plus the dividend, we are at +8%) so I will keep it for now too. In my opinion, I’ve just seen Telus start working for me.
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Decision: T is a keeper as well
I’m Not Too Keen On Selling As You Can See…
I don’t know if it will blow up in my face but I’m willing to take the chance and keep my 3 best performing stocks. Do you think I should sell one of them? For the time being, I think I’ll just wait a few more months and sell ZWB for another purchase… more trades to come in 2012 😉
I would also keep all of them. I would also buy more on a dip. Twenty years from now, all three will be there, in my humble opinion.
I bought some Enbridge about 18 months ago at just over 25. It’s now over 38 with a yield of 2.9% and in a mess over the Northern Gateway pipeline – so I sold it and bought TRP which has a yield of 4.1. So I now have a dividend yield of 6.4% on my original investment, not to mention a nice capital gain.
Because I, like you, invest mostly for dividends I am always wary of selling. As long as the dividend is strong and looks like it will stay that way I will most likely keep the holding. Once I own a stock I don’t like selling it no matter the price.
The wise investor never sells off his winners. You find it difficult to sell good performing stocks because you know that you don’t have any reason to part with the money bringers.
Talking about Chevron, you should look at CFW on the TSE in Canada. Jumped 12% after the oil and gas company boosted its dividend and posted a nearly fivefold jump in its fourth-quarter earnings.
Just saying!
Mike