Either way, taking profits is never a bad thing.....
I just wanted to respond to this. ITs repeated so often, people seem to take it for a Truth. It is not a Truth.
If you're unhappy with Apple's management and have been waiting while to get out with a profit, then that's fine...
However, taking profits can lead to bad portfolio management. Fisher says you should only take profits when 1) The company management changes for the worse or fundamental market conditions (say a war) change. or 2) You have somewhere else to grow the money.
For instance, did you have a destination for that money, or is it sitting as cash earning nothing now?
Taking profits because one company is too big a percentage of your portfolio ends up pruning the flowers and cultivating the weeds.
Taking profits also opens you up to increased fees and tax liability-- if your profit is only %20 or so, it could all be wiped out in taxes-- you get taxed more for your profit than you get a deduction for your losses.
And finally, the danger with taking profits, even if you plan to get back into the company, is that you never know when the company's going to have a sudden run up. More often than not, you are better off leaving your money in the stock than getting in and out and trying to time the market.
Just my opinions on good investment strategy. Good books on this are "Buffettology" by Mary Buffett and "Common stocks for uncommon returns" by Philip Fisher
Dragonfly |
