I don't sell overvalued positions very often myself, but it seems a pity to waste an opportunity when presented.
A couple of years ago, I sold WAB after it rose quickly in value; however, that was not based on the rule-of-thumb.
What I am monitoring now is SYY, which is in my wife's portfolio. I assume a forward PE of 16.05 as fair value (the average forward PE for the SP500), while my rule-of-thumb results in a forward PE of 18.88 for rebalancing. Just looking at SYY, the forward PE is now 18.95, so I will probably rebalance this position.
Since WBA has a forward PE of 18.56 (Yahoo Finance), my rule-of-thumb would state that WAB is getting close, but has yet to reach the breakeven point where income would not be sacrificed by rebalancing.
A couple of years ago, I sold WAB after it rose quickly in value; however, that was not based on the rule-of-thumb.
What I am monitoring now is SYY, which is in my wife's portfolio. I assume a forward PE of 16.05 as fair value (the average forward PE for the SP500), while my rule-of-thumb results in a forward PE of 18.88 for rebalancing. Just looking at SYY, the forward PE is now 18.95, so I will probably rebalance this position.
Since WBA has a forward PE of 18.56 (Yahoo Finance), my rule-of-thumb would state that WAB is getting close, but has yet to reach the breakeven point where income would not be sacrificed by rebalancing.