7Mês·

When strategy and return mean two different things...

I am once again faced with a decision on which I would be pleased to hear a few opinions from the community. It's about my most successful position $BMPS (+0,98%) where I currently have a 315% profit and a div. yield-on-cost of just under 45%. An investment that has really worked out spectacularly so far. Now, of course, the position has become very large and the high dividend is also contrary to my actual strategy of focusing on share price growth. I have therefore considered reducing the position a little and taking around €700 out of €4200. On the other hand, I still think the company is a really good investment and think to myself that I can actually let it run purely to build up assets and you don't want to punish the portfolio stars and buy something that isn't going so well... how do you proceed when you get / would get into such a situation?

11 Comentários

KevinE@KevinE

7Mês

If I have shares, I buy for a maximum of €10k, but generally let profits run. However, if the share's profits rise so much that an individual share accounts for more than 5% of my portfolio, I would also sell part of it to reduce the risk.

In the past, it was always enough for me to only buy other stocks in my portfolio to keep the weighting within limits.

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Chris@Multibagger

7Mês

Unfortunately, I only recently discovered the share and have taken a small position for my medium-term portfolio. So I will keep it and gradually build up the position. Of course I can understand your thoughts. I can also answer them relatively simply. There would be exactly one reason for me to reduce or sell such a position. I would have to have identified a title where I believe the chapter will perform better in the future.

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GHF@GHF

7Mês

Your problem is easy to understand. In principle, I would reduce positions that have become so large that they dominate the entire portfolio. However, you now have a phenomenal dividend yield on this position. That's why I wouldn't reduce the position now without necessity, you won't find such a cash cow again so quickly.
Why not set a stop loss or trailing stop loss on part of the position? This way you can keep your cash cow running, but at the same time have a hedge.
However, I am unsure about the planned takeover. This could well mean a weaker share price for a few months.

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Pedro M.@serkeftin

7Mês

For me, $BMPS was one of the best decisions and I am even thinking of increasing the position. Now after the dividend, the price is very attractive again!
And I could say the same for other Italian banks...

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Alfred@Alfred16

5Mês

I wouldn't let any of it out of my hands. I don't understand why you always want to sell good investments that are still promising in the future. The bank is on a good path again, they have done their homework and it would not be logical for me to sell now. For example, I only got in a week ago because I didn't know this share yet. I was repeatedly advised to sell Nvidia ... I'm glad I didn't, it's also by far my biggest position, and of course I'll let it run for the next 3 to 5 years.

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7Mês

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DieEnte7@DieEnte7

7Mês

@lawinvest I'm super happy, but at the same time I wonder whether an Italian regional bank that was on the verge of bankruptcy in 2020 must have the same share in my portfolio as Google 😅

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Chris@Multibagger

7Mês

@DieEnte7 I don't know which broker you are with, but if he allows a trailing stop loss as an order, I would otherwise use it. Enter an SL for the number you want to sell and a TSL, which you can specify in € or %. This way you take further increases with you and your SL rises with it.
However, this small regional bank is currently aiming for a takeover and if it works out, it would become No. 3 in Italy.

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