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A Fool (subscriber to RYR and SA) seeks support from fellow retirees:

My dad, a great businessman and stock picker (and generous!), bought Hershey years ago in my name, along with several other solid companies (no funds). Until his death in May/04, he managed the portfolio with great success.

Knowing absolutely nothing about investing when he died, I have taken it on myself to learn, learn, learn everything I can, to try to make some informed decisions, especially since I am retired and this is my sole income source for the rest of my life. Motley Fool has been my greatest teacher here and I am really enjoying the process.

Now, I have a very large position in HSY which represents waaay too many eggs in that sweet basket. After watching it ride up last year, I now see it coming back down. If I weren't already so heavily invested, I'd probably see this as an opportunity to buy more shares in what I still believe is a great company.

However, given my situation, I've decided to gradually sell some HSY using dollar cost averaging, in order to buy a few TMF recommendations, both to diversify and to get to a better asset allocation (am 95% invested in just 4 stocks!).

Yesterday, I placed a limit order to sell at $55.00. I know how bad (and futile) it is to try to time the market, but I don't want that order just hanging out there as HSY continues to decline (closed at $54.40 today). Don't know whether to re-do the order with a limit of $54.00 or wait and see if it gets to $55~~?

Long story, but would appreciate the support of the usual Foolish wisdom here.

Thanks in advance ~~Good Year Wishes to All!

P.S. have also posted this on HSY board
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I sold my HSY a couple months ago.
When a stock goes down when the market is up as it has been the last week, that is not a good sign.
I think you have the right idea, but unless you are selling thousands of shares, limit orders may not cut it. You also don't want to place your order overnight so that you get the opening price of the day. Usually it is better to give the market a little time to absorb overnight news and get its bearings.
Best wishes, Chris
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Yesterday, I placed a limit order to sell at $55.00. I know how bad (and futile) it is to try to time the market, but I don't want that order just hanging out there as HSY continues to decline

Drastically reducing your exposure to four stocks that make up 95% of the portfolio you are depending on for your retirment is not market timing, it is good common sense.

In 2000 we had 25% of our portfolio in DW's company stock. It declined 95%. Fortunately the other 75% of our portfolio enabled us to retire anyway, but don't make the same mistake.

Since your basis in HSY is what it was worth at the time of your father's death, your capital gains hit won't be so bad (I'm saying this without knowing anything about HSY's performance since then). Run, don't walk, toward diversification.

If you are not experienced at stock picking, I wouldn't rely on TMF or anyone else for advice on individual stocks. Either get into index funds, find a manager with a great long-term track record, or keep your money in cash until you have learned enough to do it yourself with confidence.

--fleg
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Howdy:

HSY is traded so heavily that you don't have to worry if you place a "market order" part way through the trading day. You'll get a 'fill' on the order within seconds.

On small cap lightly traded stocks, one must be more careful.

wayne

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HSY is traded so heavily that you don't have to worry if you place a "market order" part way through the trading day. You'll get a 'fill' on the order within seconds.

-----------------------

I never use market ordersto buy or sell. If I want to buy something at the current price, I look at the bid/ask and place a limit order at the ask price plus or minus a few pennies. I usually get a fill within a minute (for any issue with a decent float anyway). I just don't trust market orders that can be subject to breaking news or as some would say can be manipulated in favor of the market makers. Its just makes sense to me to know the price before I buy something.
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Thanks, fleg, Chris and others who responded so well!

This afternoon, I talked with one of the very helpful reps at Fidelity where my account is, and she explained that a Trailing Stop Loss order would enable me to benefit from an upward turn in HSY should there be one (as there was, for example between November 17 when it closed at $53.14 and December 5th's closing price of $55.41).

This was new information and made sense, so I changed the order and used a trail amount of $1.00 with today's close of $53.26, on a "Good 'Til Cancelled" basis. Although my aim to diversify is strong, I don't want to panic.

Guess I'm a hands-on learner, and I'm also open to further feedback from fellow-Fools.

earthelder





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Guess I'm a hands-on learner, and I'm also open to further feedback from fellow-Fools.

earthelder


You're going to do fine. Take it easy, don't get rushed into something because someone bugs you and remember at all times: the objective of investing is that you sleep well.

Where to diversify? My advice is don't get caught in the stock du jour unless you're willing to constantly check on the market like a day trader. I like stocks that I can essentially forget about. Honestly, I check my portfolio every few months and, as for day to day ups and downs, I don't care.

Best advice I got on stocks was don't play the game of chasing the highs and lows. You decided on a selling point and that's perfect: sell at that point and go on. Beware those who say you 'could have' if you stayed in the market. One of my investing rules is always sell to an eager buyer. So he makes a couple of dollars, good for him, but I made what I wanted. 'Could have' is a stupid.

What you're learning is to trust your own feelings. I read this analyst and that analyst but when the rubber hits the road it's how my gut feels that I listen to.

Realize there's some very knowledgeable people posting here and how they got that knowledge was by getting a whack upside the head and learning from that so you don't have to.

I'd advise getting TMF's paid-for services. One essential reason is that you can use this as a gauge. TMF isn't always right but they're more often right than wrong. The point is see TMF's choices and see how your own gut feels.

It seems I am stressing this gut feeling and I am. You have to live with your choices and, if you feel in your self that the choice goes against what you believe then don't do it even though the stock does rise. Realize you know more than you know and living with what you know is important.

MichaelR


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Michael, like you, I have lived all my life listening to and acting on that "still, small voice". Some of my choices have had difficult outcomes, but life is not about avoiding difficulty. Rather, I choose to learn and grow from each life experience.

Since this portfolio passed into my hands a year and a half ago,I have subscribed to three different TMF newsletters (still take RYR and SA), talked to half a dozen money managers/advisors, read numerous books, and still, until recently, got "word" not to touch a thing.

During this time of study, "risk tolerance", which had no reality for me, has become an authentic guage of my own fear-greed syndrome. I feel it arising and choose not to act from that place.

So, thank you for your words of encouragement. Are you familiar with a small journal called, "Heron Dance"? If not, from your TMF profile, I get a sense you may find it companionable. You can find it onlineat www.herondance.com.

earthelder

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