I did all of my stock market investing thru a stock broker prior to 2007. After 20 years of investing, substantially more money would have been made in a savings account. Abandoning the use of a stock broker, and doing stock portfolio management myself using the Motley Fool Stock Advisor service and online brokers, great results were achieved.
Who are the Motley Fools?
The Motley Fools are a team of stock analysts which are, in my opinion, excellent stock pickers. They suggest 2 stocks every month and also keep a current list of their highest conviction stocks for any time you have money to invest. The strategy they recommend is to hold their picks for at least 3-5 years. I have had great results holding them longer.
Stock Portfolio Management with this strategy
One problem with this strategy is that stock pickers, the Motley Fools included, often do not tell us, in a timely manner, when to sell. Another problem is determining how each tax lot has performed, as measured by the annualized gain over the holding period. This allows you to compare with how a saving account grows. If you were to get 4% interest per annum of a savings account compounded annually, that’s comparable to 4% annualized gain. This is not a perfect comparison because typically, savings accounts are compounded monthly. If you are afraid or are not motivated to look at how your investments are performing, then you probably should only buy ETFs like VTI, SCHD, VOO, or QQQ.
My Solution
I’ve written a python program which provides the annualized gain for each of your stock lots. To use it, you must first enter all of your investments into a portfolio using Yahoo Finance. A v2.0 portfolio recommended. If your annualized gain for a particular investment is not to your liking after 5 years (or whatever you decide), then it is time to sell and move on. For me, 5 years is the minimum holding period.
After you have entered all of your stock investments into Yahoo Finance, you can use my analysis program. You can get it here along with the details of how to use it.
Who am I to give you this advice? Click here.