I Have the Worst Luck When I Sell Stocks
Seriously. People should pay me to sell a stock because that basically guarentees that the stock price will shoot up. I decided to sell some of my additional IBM ESPP shares since its been about a year since I sold the last group of ESPP shares.
The value of these shares is such a high percentage of my net worth (well above and beyond any other single holding) that I feel I need to lighten up more and more as the stock price goes up and the number of shares I have increase through participation in the ESPP. Last year I sold 200 shares at about ~$90/share. This week I sold another 100 shares for ~$109/share. Ofcourse later this week IBM's share price is up another $5/share to ~$115.
But its ok. I need to sell the stock. The business is more fairly valued than it has been in a long time and I need to adjust my holdings accordingly. The increase in stock price helps me with all the remaining shares I still own.
The ~$10,900 in proceeds from the stock sale will help get my $80,000 home downpayment savings goal underway.
Comments (7)
Consider yourself happy that it's just 5% (roughly). I sold a stock back in March that I had been holding for over a year. The price had remained completely stagnant. Nothing was happening. I sold for a lousy 1.4% profit. If I held it today, I would have a 96% profit! Ouch...
Posted by Lau | July 20, 2007 9:44 PM
I was just going the opposite direction. I bought several IPO stocks in recent years (like XFML, GRRF, and BX) and they dropped like a rock shortly after the public offering. I always tell myself to wait a little bit before jumping in, but that strategy has failed.
Posted by Sun | July 20, 2007 10:20 PM
It's really not worth worrying about things like that, there's no way you could have known about it ahead of time.
While on that note though, if you could sell USG I'd be quite grateful. It's been drooping for awhile and I could use a '2million' price jump :)
Posted by Gibybo | July 22, 2007 4:22 AM
I have seen a lot of people in this situation when I worked with a stock broker. I agree with Gibybo but studying market and daily updates about the company may give one an idea about what may happen on that day.
Posted by Personal Finance Guide 101 | July 23, 2007 7:35 AM
I know where you are coming from, IBM makes up the majority of my portfolio and when I saw it shoot up like $5 in one day, although I'm a long term holder and won't sell, it was still a damn impressive day. But don't get down on yourself you could have sold and then it take $10/share then you'd be signing a much different tune. Like your blog keep it up!
Posted by Nate | July 23, 2007 7:52 AM
Slightly off topic, but given that a significant portion of your net worth is in the stock market, do you use stop orders to protect yourself against a significant market downturn. I've been thinking about doing this, but have yet to find a good strategy on how to do it. Any advice?
Posted by Roberto | July 23, 2007 2:05 PM
Don't worry about these things. The right thing to do with an ESPP is to sell it as soon as it is purchased. What you should be after is the 15% discount (if your company offers that). Investing large amounts in your company stock is not a good idea - not only is your portfolio less diversified this way, but since you work for the company, if the company tanks you can lose not only your job but a sizeable portion of your portfolio.
Diversify, diversify, diversify.
Posted by shadox | July 23, 2007 5:01 PM