...If you sold everything in your microcap portfolio today how much cash would be available after commissions, ticket charges, etc...? How much investment money did you start with?
If the number you started with is more than what you can sell it for it may be time to do some pruning. Let's begin with the biggest loser. If it still has a bid could be a good time to as they say, go to cash. Other losers, I would use discretion but they too probably require liquidation which of course depends on liquidity.
So what's left, cash and a few winners, hopefully. Let's look at the winners. Any stock over 100% profit or greater with a strong bid sell to the buyers. Any stock between 20% and 80% profit requires we look at the trend. If trending higher we could add to the position if trending lower we should take the profit and add to the cash for now or cost average up a little more of the best in the litter left. (Never cost average down, rule #1)
So now we have cash and stocks trending higher. The losses will be offset by any gains taken so far or future gains, for now don't consider short vs long term gains and losses. Taxable gains covered by losses although fourth quarter is usual time to offset gains we're trying to right the portfolio rather than tax planning.
Now what do we do with the cash? Great problem to have. We may have cost averaged up and bought more of a stock we liked that was trending higher. Psychologically the cash should make you feel good you will get over the separation anxiety from selling past hopes and dreams. Let's stop for now take a deep breath and look at the cash for awhile.
In the next AMWS we will begin to spend the cash and build the portfolio.
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