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Portfolio management question

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Marshall asked 4 months ago
Hi Pat,  Thanks for being a great mentor, teacher, and overall great person.   I plan on being a Mission Winners client for the rest of my life.   I have a question on how to manage positions I have in SOXL since October of 2022 with my average cost of $12.86.  I manage both my wife (age 60) and my (age 62) Roth, Traditional IRA, and non-qualified Joint Accounts as well as my daughter's (age 32)  Roth account and they all contain significant positions in SOXL.  My son (age 24) just has positions in QLD for now and I give him advice when to add.  Since then SOXL share price has greatly increased (currently share price of 65) and is approaching the Jan 3rd 2021 high of 74.21.  Currently, my wife and my account holdings have grown significantly with SOXL accounting about 66% of the total account value.   I have sold small amounts in my accounts at previous highs such as the first part of this year and have bought more to trade in and out at various times when you suggested buying and selling SMH.  I know you can't time the market and tell me when the ultimate high occurs, but I don't want to round trip and loose much of my gains.  I have thought about setting some upper alerts selling some in stair step stages (maybe up to one half) when it approaches the 74 level and some above.  Also, I'm not sure about where I should set some stop loss alerts.   I am also content to ride out some normal pullbacks, 10% correction,  but I don't want to ride down another major drop into a market correction.  Please give me your advice on how you would manage our portfolios as if they were yours.   Thanks for your help!   Marshall  
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Avatar photoOwen Staff answered 3 months ago

Hi Marshall, Pat made this video for you:  https://youtu.be/cM6Z-n-GNkc?si=1wCJ6v9S_HCCmyFB

Hey Marshall, this is Pat Walker from Mission Winners. First off, thank you for being a VIP member. I really mean that. I consider myself working for you, and I take your questions and comments very seriously. I know how tough this business can be, and I always aim to be thorough and specific in my answers out of respect for everyone.

You mentioned managing both your and your wife's traditional IRAs, and I'm glad to hear you're taking a thoughtful approach. It's great that your wife has been investing in ETFs and has a small position in TQQQ. Personally, I love QLD and SSO for their diversification and leverage in the NASDAQ 100.

It's fantastic that your son is getting started young with QLD, which represents the most innovative companies. You've done a wonderful job guiding him.

Regarding your investments, you started accumulating around October 2022 with an average cost of $12.86. Looking at the charts, you made a good move during a low point, which shows your strategic approach. It's important to stay in growth sectors like semiconductors – they're crucial to the future, with companies like Nvidia leading the charge.

Your account has grown significantly, and you're considering setting upper sell limits as it approaches old highs. That’s a wise strategy. Selling some into strength, maybe around 10-20%, guarantees a profit and reduces risk and stress. Always keep an eye on volume trends – decreasing volume on a rally might indicate weakening buying pressure.

When it comes to setting stops, especially in a taxable account, don't let tax consequences solely drive your decisions. Partial sells can help manage stress and secure profits without a huge tax bill. If your stock starts to lose key moving averages like the 8-week or 50-day, consider selling a portion to protect gains.

Managing stress is crucial in investing. Selling in increments helps maintain clarity and ensures you can re-enter if the stock bases and rallies again. Always focus on weekly and daily charts to guide your decisions.

Marshall, I commend you on investing in a major growth sector and taking a methodical approach. Remember, the best decisions come from analyzing price and volume action, not just tax implications.

Family is truly a blessing, and I'm grateful for mine every day. I hope this helps you. Let’s keep moving forward together.

Marshall replied 3 months ago

Thanks Pat for being so thorough in the video to my situation. Very helpful, and thanks for suggesting to not sell half but up to 20%, and in small increments. Again thanks for being a such good well meaning advisor. I’m learning from you an experienced shepherd so I can be a good shepherd of my flocks. Proverbs 27:23.