How to make your portfolio better? Here's one tip.

Eric Seto

Jul '23 • Long term investing ideas

When you are investing, it is often easy to keep your losses and cutting your winners.

In the end, we are only humans and it is easy to be attached to losses.

So what can you do?

Let's say you bought Estee Lauder and you are down 20% since purchased. Sucks.

You want to avoid selling at a loss. But you don't want to keep holding onto a stock that is losing money.

So what do you do?

You can net off your losses against capital gains. If you have any capital gains you can realize - for example - a stock near a top - you can take the profit as well as the loss so you're not paying any taxes. This is especially important if you are trying to reallocate your portfolio.
Now you freed up your capital, you want to invest in a new opportunity.
Look at the current loss you have (Let's say it is Estee Lauder -20%, you go through your stock list to find a stock that has the potential to make +20%.
This means that by waiting for Estee Lauder to bounce from -20% to 0%, it would be the same as waiting for the new stock to go from 0% to +20%
This is important because now you are free to choose another stock that has POSITIVE momentum
For example - at this point in time - you find VRTX has an upside potential of +20%. Then, you're good to go to swap it.

What does this mean?

It means you are no longer attached to losing stocks. It means you are free to swap from a negative momentum (often downtrend stock) to a positive momentum stock (where you can get to a profit faster).

Cheers,

Eric Seto, CPA, CIM

In August, my goal is to help 20 people without a financial background to master investing

Investing Accelerator is designed for people without a financial background. Here's the link to the webinar: https://bit.ly/3i9QT1V

We focus on developing financial independence, where you have the ability to invest to earn a higher return.

The goal is to achieve 30% return per year.

In the first phase, you will learn long term investing and targeting 30% for tax free compound growth. This will help accelerate your overall wealth.

In the second phase, you will learn monthly passive income to provide a more predictable cash flow (target 30% per year) which can cover your expenses such as mortgage, utilities, car payments. This will help accelerate your retirement goals.

If you are interested, then let's hop on a call to see if you can benefit from the strategies in Investing Accelerator and get 30% per year.

During the call, we will map out exactly how you can achieve 30%, what you are lacking, how you can improve.

Here’s the link to schedule a call: https://bit.ly/3QiR3T5

15 comments