I feel like the best strategy for big winners like AMD is to generally ask yourself first a few questions.
A. Has the investment thesis changed?
B. Is the investment in a tax advantaged account?
C. Do you know where you will invest the profits? (Cash is generally not a good answer)
If you answered YES to any of the above questions, then you should either sell all of your position, or aggressively cut.
If you answered NO to any of the above positions, but the stock has grown to such a large % of your portfolio that you can't sleep easily at night, then you should institute a DCA OUT strategy. Set up a formula that is robotic, emotionless, and easy for you to follow, that will allow you to trim your position overtime. Plenty of posts advocate for selling your entire position, but unless you have enough reasons to do so (ie answering yes to all 3 questions above), then selling your biggest winners actually works contrary to compounding. It takes money to make money.
The best strategy for big winners
byu/Opposite_Buffalo_649 instocks
Posted by Opposite_Buffalo_649
1 Comment
I will keep my answer short here. I answered “Yes” regarding the thesis has changed regarding the investment part of it. I’m very long AMD-investment is stay long-not *short regarding some thoughts of actually selling,* have been for years and years. While AMD has gone up hugely, I’m not selling as you may suggest by answering yes. Why? because I believe they have finally turn the corner and are on the cusp of even growing much larger gaining market share and profits.
So, I’m waiting later this year to see what the huge Meta MI 450 possible $100 billion data contract deal will bring in for AMD. And it looks very good going forward at this point.