Topic: Wealth Management

Wealth Management Planning: Part 4 of 4…When you have found winning stocks—keep them

wealth-management-planningGetting back to the basics is the perfect way to start any new year. That’s why we’re bringing you a series of four special posts that examine the major portfolio decisions every investor needs to make. Moreover, we outline the approach we follow with our wealth management clients.

This week: How do you maximize profits from your best stocks? Avoid selling for small gains when there could be much bigger returns ahead.

This is the last in our four-part series in wealth building from our Successful Investor Wealth Management service.

Today: Get all the profits you can out of your best stocks.

One of the costliest mistakes you can make as an investor is to sell your best stocks too soon. This mistake comes in two main varieties:

  1. Routinely re-balancing your portfolio—that is, selling stocks you own that have gone up, and using the proceeds to buy more of stocks that have gone down.
  2. Selling your best stock selections for small gains—taking a 25% or 50% profit on a stock when it’s just starting out on a rise that could ultimately produce a 250% or 500% gain.


How we make the most of your investments

We put our experience to work for our wealth management clients.

When we have a portfolio in place for each client, we take an approach we describe as “buy and watch carefully.” A simple buy-and-hold philosophy is inadequate. Time and circumstances will require the re-balancing of a portfolio. This is where our experience comes in. We know that the best stocks will continue to gain value over time, even if they go sideways for a while. We guard those stocks and let them work for our clients as the gains keep multiplying.

Our clients have seen how successfully we manage their investments. They entrust us with over half a billion dollars to invest on their behalf.

If you’d like to know more, call us toll free at 1-888-292-0296, or contact us online.  Click here to learn more about Successful Investor wealth management services.


The rise in the U.S. dollar has tempted many investors to make this mistake, one way or the other or both.

As for the first variety, we’ve long advised investors to invest 20% to 30% of their portfolios in U.S. stocks. If you followed that advice, U.S. stocks could now make up 40% or even more of your portfolio, depending on which stocks (Canadian and U.S.) you bought, and when you bought them.

This may spur you to re-balance your portfolio by selling some of your U.S. stocks, and investing what’s left of the proceeds (after taxes if any, plus brokerage commissions) in Canadian stocks.

However, although the U.S. dollar has risen from $0.95 Canadian to the current $1.41 Canadian, this isn’t a record. It got as high as $1.60 Canadian in the 1990s. In fact, the U.S. currency is not far from the middle of its Canadian-dollar equivalent range of the past 45 years.

Selling your U.S. stocks today could cost you in two different ways

As for the second variety, the U.S. economy has always provided a wider range of growth opportunities than our economy. Many U.S. companies can still profit, despite the U.S. dollar rise. They can simply shift production to foreign countries.

If you sell U.S. stocks because the U.S. dollar has gone up, you may lose out on two counts—the U.S. dollar could keep rising, and top U.S. stocks could keep rising as well, without even taking your currency gains into account.

A great deal could change for the U.S./Canada exchange rate in the next few years. There is a new federal government in Canada, and the U.S. will hold its next presidential election in November 2016. The drop in the price of oil tends to hurt Canada’s dollar and help the U.S. dollar. Many Canadians think (or simply hope) that the oil-price drop is temporary, of course. But oil-price trends are notoriously hard to predict—much like currency exchange rates.

The U.S. dollar may still gain on the Canadian dollar over the next, say, six months. Meanwhile, hang on to your U.S. winners.

Part I (January 12, 2016): The best way to buy stocks profitably throughout your lifetime.

Part 2 (January 19, 2016): How to invest in stocks successfully for the rest of your life.

Part 3 (January 26, 2016): How to sell stocks most profitably.

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