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I’m not cut out for individual share ownership. Through pure happenstance I’ve ended up holding shares in two separate companies, and the problem is I now feel obliged to make judgement calls. Should I keep them, sell them, how are they faring against their competitors? It’s all a bit of a hassle.
Compare that to my retirement portfolio, stuffed full of index funds representing thousands of individual businesses. I never give those a second thought. So why can’t I extend the same indifference to two measly company shares?
The sensible move is obvious: sell up and reinvest the proceeds into an index fund. But that’s where FOMO is gumming up the works. A quick look at Google Finance tells me both are doing rather well — one has returned 55% over the trailing twelve months, the other 35%. And that little voice in the back of my mind keeps whispering: “what if they do it again?”
I’d never think like that about my index funds. With those, I just accept whatever the market delivers, good or bad, and get on with my day.
I can’t imagine the stress of actively managing a basket of 30 or 40 individual holdings. I’d spend a quarter of my day staring at a screen. Individual share ownership is clearly not my hobby.
And yet, thanks to that stubborn irrational streak, I’m not doing the sensible thing. I’m holding on, letting two positions consume 95% of my investment headspace, despite comprising less than 0.1% of my total wealth. Whatever they do will have absolutely zero effect on my net worth.
What’s really amusing, if I’m being honest with myself, is that my excuses have a remarkable ability to shapeshift with the seasons. Two years ago, when both shares were underperforming, I held on because it felt wrong to sell at a loss, I’d wait for a recovery. Now they’ve recovered rather nicely, I’m holding on because it feels wrong to sell winners. I’d hate to miss what comes next. I have a creeping suspicion that next year, whatever happens, I’ll have an equally airtight excuse at the ready. If nothing else, I’m consistent in my inconsistency.
I consider myself a rational investor and a reasonably sensible person. I’ve written all of this out, diagnosed my own irrationality in some detail, and arrived at the perfectly logical conclusion that I should sell. I won’t, of course. I’m a little bit weird that way. But it has to be said: it was a very sensible conclusion to reach.
I’d consider selling half of them, or a fourth, or some other fraction. That way, you can lock in any gains you’ve attained while still leaving yourself open for additional gains in the future. It’s a lite version of rebalancing your portfolio.
I’d consider selling half of them, or a fourth, or some other fraction. That way, you can lock in any gains you’ve attained while still leaving yourself open for additional gains in the future. It’s a lite version of rebalancing your portfolio.
As you said, you are being irrational. These 2 stocks are so insignificant to your portfolio, why waste a minute of time thinking about them? I own ETFs, but have a handful of stocks that I’ve owned for a long time, Google, Amazon, Netflix, Visa, Berkshire and some others. The gains are so great that selling them would generate a big tax problem. My kids will inherit them and get the step up in basis.
I had a few shares of company stock (RSUs) that vested last week. I sold them immediately and moved the cash to my Roth IRA.
The stock had tripled in value since it was awarded, but it’s all a shell game.
The company looks good on the street because they’re outsourcing to India and laying off thousands of expensive US employees. The quality of the service provided is declining rapidly. I’m curious to see how much the C-Suite crew can pump up the stock before they cash out and jump to their next company.
Of course, now that I just got rid of it, they decided to divert 5% of last year’s bonus to stock, so I’ll have to look at it again for another three years. At least I’ll be retired by the time it vests.
I also have 9 shares of Lucid and 9 shares of Rivian, just because I like their vehicles and spent $100 on each company within my Roth IRA a while back.