Talk Personal Finance – January 2016
Wow! So far, the stock market this year has been off to a rough start. Although the bear market is always welcomed in my books as it presents buying opportunities, it can be quite problematic seeing how I do not have any cash position to capitalize on that. Ouch….
Bamboozled by insufficient cash position
Most of my funds are already invested into stocks leaving me with no money to utilize. The simple solution would be to sell some of my current holding but unfortunately a large portion of it is tied into the energy sector which is deep into the red.
As soon as there is any slight evidence of recovery I will have to sell off some of these shares even if that means taking some loss. Having money tied up that could have better use to it would be the smarter decision.
My next goal
In the meantime, I will look towards maxing my RRSP and start making better investment decisions here on out. I am thinking about leaving it configured as passive because so far my investment in index funds outperform my stock selections by miles.
Just out of curiosity, where do you draw the line in selling an underperforming stock?
Here are my interesting reads for the month:
I Use Craigslist for Property Rental – Well Rounded Investor
Living outside the norm – Tawcan
Canadian Banks – US Investors Should Look Out For This Threat – Roadmap2Retire
Invest In My 401k Or Save For a House Downpayment? -Financial Samurai
Thanks for mentioning the Cdn banks article, Jeff. I have a fairly decent cash position but still waiting for bargains. I think this market will still give us some good prices over the coming days.
Best wishes
R2R
Nice! Unfortunately even if it does I cant purchase it. I should put the 2016 contributions in my TFSA and use that money though.
The comment on the cash position is relevant to us as well.
Most of our invest-able assets are invested. this leaves no that much room to jump in when there are bargains.
In July 2015, I started to put aside some extra cash of our monthly investment. I wait to jump in at a certain price that I have set with myself. this price was not reached yet this week, and with the bull that is back from winter holiday, it is not in sight yet.
Yup, I think its a good idea to have some cash position for when good bargains come around. I will try to sell when I can.
Thanks for sharing some great reads. I enjoyed the R2R article about Canadian banks. I hold TD, BNS and RY and feel confident in their ability to weather the current headwinds they are facing.
Regarding your question. I would only consider selling if I no longer believed in the company or sector that it was operating. Over 8+ years I have had many stocks that “under performed” only to watch them go up inevitably over time. You can always look at my portfolio where I highlight gains/losses for each stock. I don’t care if a stock doesn’t perform well in the short term or relative to an index. I just want (growing) dividends over the long haul.
Indeed! I am looking for short term growth, so far its not doing so well. Not sure if I have the patience to wait for a few years for the energy sector to recover though.
Thank you for mentioning. I think DivHut hits all the points.
I need to develop some criteria.
I bought COP at $65, it went up to $85 before decemding to $67, then went back up to $71 last year. I sold it at the news that Buffett sold all of his oil position even at a big loss as he was just buying them in the summer of 2014.
I bought VZ at $49, it went to $53 before it went down to $43, but I keep holding on. The stock is yielding at 5%, the customer base is great, the service is good, even I, a frugal person couldn’t get away from not using their service. Their customer service was thanking me for 8 years of loyalty and counting. (Dang! That’s $130/mo for 8 years). Anyhow, I’m not selling because as long as their is no disrupting or breakthrough on the tv or cable internet, or cellphone service in the next 10 years or so, I’m not selling. If VZ goes back to $30s, I’d buy some more.
Unfortunately my energy stocks isn’t going anywhere and I’ll be looking to sell them soon to make better investments.