I Just Sold This Dividend King
Imagine your portfolio is like a garden that you've carefully tended to over the years.
Each stock represents something you planted with the hopes of seeing it flourish and bear fruit. Yet, as any gardener knows, nature doesn't always follow your plans. Sometimes in the midst of the summer squash and Swiss chard there are weeds that pop up, and you've got to get rid of the weeds.
As the head gardener of my portfolio, I recently found myself facing such a situation, and had to let go of one of my positions — one of my longest held positions, actually. I made the difficult choice to part ways with MMM for a significant loss (about 33% to be exact), which caused me to defy Warren Buffett's #1 rule of investing: "Never lose money."
As a practitioner of the buy-and-hold investing philosophy, you'll understand that selling out of a stock is a hard thing to do. Your intention is to hold your investments for the long haul, perhaps forever. This commitment stems from thorough research that fuels your confidence in the stock's potential as a lasting, growing asset.
However, sometimes the stocks you invest in turn out to be weeds. Sometimes they don’t live up to your investment thesis, and sometimes you realize that you didn’t even have a strong investment thesis to begin with.
So with that said, what ultimately made me decide to sell MMM? There were three reasons, really, which I tell you all about in this video here. In essence, though, I think my experience with this dividend king should serve as a reminder of a couple different things.
First and foremost, you shouldn’t blindly invest in a company just because you see someone on the internet talking about it. Platforms like YouTube, Twitter, or newsletters are great places to get ideas, but you must perform your own independent due diligence.
In other words, the fact that Ryne is buying (or selling) a stock doesn't necessarily mean you should do the same in your portfolio.
Second, it's important to remember that there will be times where you’ll be wrong. Not every investment will go the way you plan, but that’s okay. Even if you make a bad call every now and again, it shouldn't completely wreck you in the long run.
Although easier said than done, try to embrace the missteps as stepping stones on the path to financial freedom. Just as a garden flourishes through careful tending, your investment acumen grows with each experience, both positive and challenging.
With that, I want to hear from you. What was the last stock you sold out of in your portfolio, and why did you sell it? Write to me here and let me know. And a big thank you to the 28 readers who responded last week. You rock! 🙌
In case you missed last week's newsletter, you can read it here.
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ICYMI
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I don't often sell stocks, and hate when I do, but I just sold one of the dividend kings in my portfolio. In this video, I'm telling you all about it.
CAREFULLY CURATED
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WHAT I’M LISTENING TO
DD191~ Meet the $96K SCHD Investor | Dapper Dividends
TIP567: The Evolution of Value Investing w/ Brian Feroldi | We Study Billionaires
WHAT I’M READING
A bull case for Apple (AAPL).
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Why an investment into SCHD is a bet on America.
Charlie Munger's latticework of mental models.
Altria Group (MO) is smokin' - time to buy?
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