TL;DR
- I sold about 15% of my stock portfolio a few days ago.
- I invested my savings heavily during in the first half of 2020, especially when the Covid-19 pandemic caused a pretty large fall in most sectors.
- I have done very well on those investments. Altogether I have more than tripled my money (as of this post).
- I feel the market might be oversaturated and I will just feel better taking some profits while I'm way ahead (even if that means missing out on more in the future).
- I will likely be keeping the money I take out now in a high-interest savings account... and it will likely stay there until I see another good buying opportunity.
- Even though I sold parts of positions I am super long on (read: TSLA), I am still super long on them.
More details
Generally my strategy for investing in stocks is to buy stock in companies I really believe in long term (e.g. Tesla) and hold them... forever. But a few days ago I sold a very modest portion of my portfolio after holding the positions for only around 1 year.
I did this solely because the positions did better than I expected in this short period of time (I more than tripled my original investment altogether, I nearly 8x'd my investment in TSLA) so I just wanted to recoup my original investment purely for physiological reasons (I will feel good knowing that I basically have all the stocks that are still in my portfolio for free).
Also, I think the stock market might be a little bit artificially inflated at the moment. Too many people who have no idea what they are talking about are giving stock advise all over social media. It's putting off bad vibes —like that old "shoeshine boy" story. Hopefully I'm wrong, but if I'm right, I will have some extra cash to invest when the market crashes... and if it doesn't crash, I'll still be happy because I still have most of my wealth in the stock market.
Some stocks I have already held for over a year and will only be paying long-term capital gains on... others I will likely pay a larger tax rate on, but I'm not worried about that. It's good to save money on taxes where possible, but I do not believe in going out of your way to do so. I'm very happy to pay higher-than-anticipated taxes... especially when I may just as well be writing off losses.
I will not feel bad about these sales, no matter what happens. Even if all these stock go to the moon. I'm treating this sort of like hedging my bets... I was lucky enough to get all the stocks that I am leaving in my portfolio for all intents and purposes... for free. I can't complain about that.
I'm planning on treating my stock portfolio as leverage. When I want to take out loans (and I plan to do so in the near future), lenders should be quite happy to see that I have a good portion or even more than I want to borrow in liquid assets.
Thank you for reading this update!
