Sell MSFT?
MSFT is now 20% of my portfolio (betterment, 401k, crypto, etc.). It has gone up quite well: over 40% in one year. Should I sell and transfer to betterment or hold or sell periodically? What is your strategy? No trolls please. I’m a newbie.
Hold it. Satya here
Also check your etf. You may have more than you think.
Is it a small sum or large? 20% of 100k is different than 20% of 1M.
Why is that any different?
If you're happy with the current price, but think it will drop soon. You can always get a little more profit by selling in the money calls on them. Two things can happen ,A) it drops and you make money on the calls, B) it goes up the call executes but you got the price you were happy with + the call premium, just an idea to hedge your bets.
Can you do this on fidelity? I haven't looked but have thought about it before.
Irrespective of what MSFT stock might do in the future, it's NEVER a good idea to have 20% of your investment in a single stock. Diversify!
I am letting it ride - Satya has us going in the right direction. You can issue covered calls to protect your downside. Or stop / lost trade tickets. And buy as much as you can with the ESOP as that is free money with a 40% annual return (@ 10% quarterly discount).
How does 10% discount 4 times translate to 40% return annualy🙂
@Iaatu, correct I was in a hurry to a meeting and had to make the math very simple. I meant the day it vests each quarter you can sell it. Nonetheless, it is free money (well less the 10% gain is taxed at normal income rates unless you hold it).
Really depends on how risk adverse you are. Keep in mind that not only is 20% of your portfolio in MSFT. 100% of your income is in MSFT too. A bad time could impact both. Personally I'm more heavy in MS but I do sell a little every top so I don't get too unbalanced. Maybe set yourself a limit and then rebalance every 3-6 months. Whether that limit is 10, 20 or 30% is really a personal decision. If you're young? Go for it. Worst case you have many years to recover. If you're old, better to think of risk mitigation.
Sell half and diversify into mutual funds. The other half, if you trust msft so much, keep it and let it grow.
Hold
Why?