Monday, June 9, 2008

Selling? Attitude Maybe Everything

What if you got a stock that is not doing well, but you hate to sell and incur a loss. Maybe the first thing you need to do is change your attitude, or how you view this stock and your portfolio. When considering changes to your portfolio, especially selling, the question you need to ask is “What is best for my portfolio from here?”

I usually sell a stock and buy another one when I think that from now into the future I will be better off with this trade. That is I want to replace a stock in my portfolio with something I like better. This is a positive change.

I keep an eye on my investments. One stock that I have not been pleased with lately is AGF Management (TSX-AGF.B). The price of this stock is back to where it was in 2001. This stock has multiple voting shares. This means that because a family owns some of the company via multiple voting shares, they have effective control of the company. I do not mind multiple voting shares as I have done well by some companies with this structure for their shares. However, this stock has not done well. I have had this stock since 2001 and according to Quicken; I have made less than 2% average per year since then. This is probably due to the dividend. I know that it is on good dividend paying stock lists, such as S&P/TSX Canadian Dividend Aristocrats and Mergent’s dividend achiever list, and it is a good dividend paying stock, but you need something more. Also, just being on of the lists does not make it a great stock.

Tomorrow, I post my spreadsheet on this stock and talk about what will replace it. If I am going to sell this stock, what would I like better?

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