Last Monday (Oct 31, 2016) I sold my Enbrdige shares and took profit. When you hold stocks it is important to take profits periodically.
I have owned Enbrdige since February of this year ( 2016) . You can find the original article I wrote about Enbridge here .
I also reported on progress on how this share was doing in June. You can find that here .
There were a few reasons for taking profit (selling):
- I was targeting a return of approximately 30% in this stock and I was at a point of about 27.8% return on ENB.
- I wanted to hold a higher percentage of my portfolio in cash so that I would have some capital to purchase stocks if the results of the US election were to cause a negative movement in the markets.
- In order to get some more capital I had to sell some of my positions. Enbridge was doing the best out of all my individual holdings and I wasn’t expecting it to move by large magnitude in the future as such it was time to sell.
- Always keep track of your exit targets for any position you hold. It is easy to get greedy and lose the gains you have made. Or get defensive and not cut your losses in time to minimize the unrealized loss.
- My holding period was about 8 months. I was initially targeting a year, but I have reached close to my target and it was time to sell.
- This was one of the happier exists – sometimes you have to sell with a loss and that will happen if you trade. That one is even harder to do – will write future post on such a case.
Some interesting statistics about this gain:
I made a capital gain of 24.39% and a dividend gain of 3.45% . I was happy with both. I was pleasantly surprised by my dividend gain – it was not something I normally focus on, and this gain has me thinking more and more about dividend paying stocks !
The point I would like you to keep in mind is that you always have to take profits – identify exit criteria and follow through – don’t get too greedy or hold for the sake of going back to your original price if you encounter a loss. It can hurt, but better to cut your losses .
Also a stock can reach a peak and fall back over a period of time. If you don’t take profits along the way – you may end up with not making any money from capital gains for a long period of time !