The strategy is our basic strategy described above: you buy all ten names, put 20% trailing stops on them, and then when you get stopped out, you replace them with current top names. So you cut your losers quickly and let your winners run.
So is this more a long-term strategy to avoid short-term capital gains? What I've seen elsewhere is to sell a percentage of the shares when they reach a certain level and then raise stop losses to break even. If I'm just holding the winners and never selling them, there's no gain actually realized. Just trying to understand what the overall strategy is for this portfolio.
No, tax considerations play no role in this strategy. And a trailing 20% stop doesn't mean you never sell your winners; it means you sell them after they pull back 20% from their highest point since you bought them. So you might hold a stock that goes up 100% before it pulls back 20%, and then sell it then.
Is there a strategy to rebalance and/or take profits on stocks that perform well, or are those sent as separate alerts?
The strategy is our basic strategy described above: you buy all ten names, put 20% trailing stops on them, and then when you get stopped out, you replace them with current top names. So you cut your losers quickly and let your winners run.
So is this more a long-term strategy to avoid short-term capital gains? What I've seen elsewhere is to sell a percentage of the shares when they reach a certain level and then raise stop losses to break even. If I'm just holding the winners and never selling them, there's no gain actually realized. Just trying to understand what the overall strategy is for this portfolio.
No, tax considerations play no role in this strategy. And a trailing 20% stop doesn't mean you never sell your winners; it means you sell them after they pull back 20% from their highest point since you bought them. So you might hold a stock that goes up 100% before it pulls back 20%, and then sell it then.
Oh, I see. Thanks for the clarification.