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When to sell a dividend stock?

Started by wzhang18, October 10, 2018, 05:42:18 AM

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I have a stock that pays stable annual 5%+ dividend return (based on the price I paid for the stock). Since I bought the stock at its low price point, so the price has risen for about 20%. I'd like to sell it to reap the profit, but I also don't want to lose the stable 5% return. Part of the reason why I don't want to sell the stock is because I don't see any other stock that is at its low point so far. Given that there has been increasing speculation about another crisis, I don't want to enter the market at the high point.

What's your opinion on this?

Thank you.
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Unless you need the money why sell ? Hold it for the long term and take the dividends. 5% is pretty good...


Orphan is right.  Additionally, consider not selling the stock if the gain is not yet long term.  Also, "regular" dividends are a tax advantage form of income.  Also, if your stock is a good dividend growth stock, e.g., the dividend increases 10% a year - $0.20 per quarter this year but will pay $0.22 per quarter next year, you have another good reason to hold.


Ask yourself some questions:
1) Did anything change with the company where you expect the stock price to fall or the dividend to be cut?
2) Can you better deploy the money elsewhere?
3) Do you need the money in the near term where the market volatility is going to impact you negatively?

I have been taking some money off the table lately, often in cases where I have 50% + runs I will take my original investment off the table and leave the appreciation in shares. This takes some of the risk of the table and you still have some money earning dividends. 

I wouldn't do this with every purchase but in select situations where I am torn on if it should be a long term holding or not.
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