12-24-2013, 11:04 AM
I realized that the dividend reinvestment phase must be handled differently while managing my fiance's portfolio. She has a moderately large inheritance, but a relatively small salary, so regular contributions are not possible.
For awhile, I was reinvesting some her dividends into small cap stocks, like I would my own portfolio. However, I had that uncomfortable nagging at the back of the head that something was wrong. Then I realized that I was putting her into more risky stocks with a much smaller ability to recover. Now I am moving her out of the small stocks whenever the price rises or it look like the risk is increasing.
Investing is a learning process.
For awhile, I was reinvesting some her dividends into small cap stocks, like I would my own portfolio. However, I had that uncomfortable nagging at the back of the head that something was wrong. Then I realized that I was putting her into more risky stocks with a much smaller ability to recover. Now I am moving her out of the small stocks whenever the price rises or it look like the risk is increasing.
Investing is a learning process.