05-09-2014, 02:27 PM
(05-09-2014, 02:00 PM)cannew Wrote:(05-09-2014, 11:37 AM)EricL Wrote: However, in situations where a position has become obviously grossly overvalued I think its prudent to trim back and put the money to work elsewhere. Finally, if I'm relying on my investments for income in retirement, I think its good to spread out the risk and would probably be more active in keeping things somewhat in balance.
Seems like your statement is at odds with your end goal: "relying on my investments for income in retirement". By selling you loose the income the stock generates and then have to find a replacement that will be just as good.
To clarify, my intent with the comment was that if I'm near retirement and a position has grown to be 25%+ of my portfolio and looks to be overvalued, I think its probably a good idea to sell some of that position off to a more balanced weighting and invest those proceeds back into another similar yielding stock.
There are plenty of stocks out there offering 3%+ yields with a long history of dividend growth, I don't think it would be difficult to find another place to invest the proceeds to provide a similar income.
Obviously there are other considerations if you are investing in a taxable account versus an IRA, but generally those are my thoughts on the subject.