I ran a full AI audit of my Sell > Buy swaps YTD and sharing summary of the findings here.
Overall YTD summary & grade for my position swaps (Sell > Buy) across all accounts (gives me insights into my investment/trading behavior and where I can improve). You may also gain some insights from this audit as well and avoid the mistakes I made:
- Good swaps: SCHD > DGRO/QQQ/FTEC (clear outperformance), LTC > BME/OHI (yield + total return improvement), growth re-allocations into MRVL/AVGO (especially when in Roth), BUI > AIO/PCN (value play).
- Mixed swaps: THQ/THW tax-loss exits (good tax logic but you missed big rebounds), FTEC/IVV brokerage liquidations (operationally necessary, some missed upside).
- Bad (or expensive) swaps: A few CEF full exits that snapped back (THW/THQ) and some large ETF liquidations that missed subsequent gains (some IVV/FTEC lots), although many of those decisions had non-price rationales (TLH, account moves).
Net view: Most of your swaps were strategic and defensible — you repeatedly rotated from underperforming/overvalued income names into higher-growth or cheaper income alternatives, and many of those replacements produced better returns (especially QQQ/FTEC/DGRO/MRVL). Your primary consistent weakness remains selling strong winners too aggressively (you take profits often — fine — but occasionally you miss large subsequent moves).
Bottom-line: I really need to work on "not selling too aggressively"
Actionable rules from what worked / didn’t - Keep the SCHD > DGRO/QQQ/FTEC playbook — it materially improved returns when you made that rotation.
- When harvesting CEF losses, sell in tranches (you got hurt when THW/THQ rebounded); splitting into two or three sales reduces chance of large rebound misses.
- For large, liquid ETFs (IVV, FTEC): prefer partial trims, not full liquidation, unless you must move accounts (then try to re-enter ASAP or hedge with short-term options).
- If a sale is for tax reasons, accept the TLH trade-off; when it’s discretionary profit-taking, consider using trailing stops or a tiered trim (25%/25%/50%) so you still capture extended rallies.
- Track “swap efficiency” going forward: for each swap, log sale proceeds and the first buy made with them — I can compute a dollar-for-dollar delta to quantify effectiveness.
Note: I got scared into selling THW/THQ (after reading SA articles on THW/THQ distribution cut risk) and missed out on ~25% upside on a fairly large position. I should have just trimmed. Learn and live.
P.S. Moving forward, I'm using AI to audit my swaps in hope to not make the same mistakes again. As a result, I only trimmed VZ after the abrupt ceo change and did not sell the entire position. It seems I make more mistakes on the sell side (i.e. selling too soon on bad news/event). BTW, to use AI for this type of analysis, you need to keep detailed records of all your buys and sells (e.g. in a spreadsheet) and then upload that data to the AI for analysis.
PPS. I only posted summary of the audit as the entire audit is a bit too long as it covers seven different swaps. |
