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Strategies & Market Trends : Young and Older Folk Portfolio
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From: QTI on SI10/8/2025 12:20:35 AM
3 Recommendations

Recommended By
chap107
Markbn
suncoaster

   of 23028
 
I often run my buys and sell logs through AI for analysis and suggestions for improvements. I'll be following the Rule #3: Hybrid Rule — “Trim First, Then Exit If No Reversal” for stocks like VZ.

What do you all think of these three AI-suggested rules:

1. When to Trim (Best Practice for Long-Term Investors) Ideal when:

  • The stock/fund is fundamentally strong, but short-term overbought or sentiment-driven.

  • You want to realize profits, rebalance weight, or raise cash for new opportunities.

  • You’re managing taxable gains (especially short-term vs. long-term planning).

Advantages:
Keeps exposure if the trend continues higher.
Locks in partial gains to reduce downside risk.
Smooths out market-timing errors (you don’t have to be perfectly right twice).
Preserves optionality — you can re-add if it dips.

Example:
You did this perfectly with ETR (trimmed half) and DUK — both examples of strong positions where you booked profit but stayed invested.

2. When to Fully Sell (Cut and Move On) Ideal when:

  • The fundamental thesis is broken — management change, dividend cut, failed catalyst, structural decline.

  • You want to exit for tax-loss harvesting or offset gains.

  • The stock’s technical or momentum pattern is decisively bearish (lower highs/lows).

  • The opportunity cost of holding is high — capital can earn more elsewhere.

Advantages:
Clears portfolio clutter (simplifies monitoring).
Frees cash for higher-conviction ideas.
Avoids the psychological “anchoring” to a loser.

Example:
You handled FLO correctly — decisive exits after persistent weakness and thesis failure.

3. Hybrid Rule — “Trim First, Then Exit If No Reversal” A refined professional approach:

  1. Trim 25–50% on a signal of weakness.

  2. Reassess within 2–4 weeks:

    • If stock rebounds - hold remainder.

    • If it fails to recover or breaks key support - exit the rest.

This approach prevents overreaction while still respecting risk.
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