UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev | Next
Author: rkmacdonald Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Re: Handling stocks in an IRA Date: 2/26/2002 8:32 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
Author: emma06 Date: 2/26/02 2:26 PM Number: 33888
As a retiree with a diversified portfolio I was curious how us older folks handle buying and selling of stocks in and IRA. Are we all of the buy and hold theory ? Do any of you sell some shares in their winning stocks to take profits, only to buy back in when the stock dips below the previous sell price ?

Most successful investors will tell you not to try to time the market.

Since you mentioned that you have a diversified portfolio, then you must have a chosen asset allocation (at the minimum a percentage of stocks vs. bonds).

The general rule for a diversified portfolio is to rebalance it regularly to maintain the target asset allocation percentages. Most people rebalance on a yearly basis.

The reason for rebalancing on a regular basis is that it forces you to sell some of the assets that have appreciated to buy more of the assets that have gone down in price. This has the important effect of 'Buying Low and Selling High' that many people only dream about.

You should also rebalance the stock portion of your portfolio as well. For instance, if you have ten stocks, and you decide to put 10% of your equity money into each one, then at rebalance time, (after careful study to determine that these are the same ten stocks you want to hold for another year),you should the gains on the winners to buy more of the losers. Again, this forces you to buy low and sell high.

I highly recommend that you read William Bernstein's book, 'The Intelligent Asset Allocator'.

RK
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Looking at Currency Ratios
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement