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Strategy - cash out the profits
20 Apr 2021 (361 views)

Several people asked me why I do not cash out on the profits in my portfolio.

Actually, I do cash out and sell the stocks that have gone become overvalued. I reinvest the proceeds in other stocks that are under valued.

I do not wish to keep cash, as it does not have any return. 

I am able to find undervalued stocks to reinvest the cash proceeds from selling the overvalued stocks. 

There is a risk that the undervalued stocks will also suffer a big drop in the event of a severe market drop. This crash is likely to be temporary. The market will return to a more normal level after the crash. This may take a few weeks or months.

The undervalued stocks have good earnings and a good dividend yield. Even if the current stock price shows a loss compared to the average cost of my holdings, I am prepared to hold the stocks and get a good dividend yield.


 


Strategy - cash out the profits
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Several people asked me why I do not cash out on the profits in my portfolio.

Actually, I do cash out and sell the stocks that have gone become overvalued. I reinvest the proceeds in other stocks that are under valued.

I do not wish to keep cash, as it does not have any return. 

I am able to find undervalued stocks to reinvest the cash proceeds from selling the overvalued stocks. 

There is a risk that the undervalued stocks will also suffer a big drop in the event of a severe market drop. This crash is likely to be temporary. The market will return to a more normal level after the crash. This may take a few weeks or months.

The undervalued stocks have good earnings and a good dividend yield. Even if the current stock price shows a loss compared to the average cost of my holdings, I am prepared to hold the stocks and get a good dividend yield.