Knowing when to sell is the number 1 struggle among investors. We know that because we’ve worked with investors for over a decade. Today, we share 5 Selling Rules to help you take action confidently.
You’ll Learn
Set a Minimum & Maximum Number of Holdings
Mike recommends keeping between 20 and 40 stocks to maintain focus and efficiency.
- Too few stocks? High concentration risk, no room for mistakes.
- Too many stocks? Hard to monitor, possible duplication, lack of impact.
Sell Insignificant Positions
Any stock below 1-2% of your portfolio doesn’t contribute meaningfully to returns.
- Small positions create noise and analysis paralysis.
- Example: Debated selling CAE and DIS—since they were under 2%, it made no impact.
- Key questions to ask:
- Is this stock aligned with my strategy?
- Why did I buy it?
- What’s my investment thesis?
- Do I believe in it enough to bring it back to 2-3%?
Get Rid of Duplicates
Investors don’t need every stock in a sector—choose the best one.
- Avoid “Pokémon investing” (trying to catch them all!).
- Example: Comparing Intel vs. Broadcom, or Bank of Nova Scotia vs. National Bank.
- Stock comparison tools can help analyze performance and financials.
Sell Bad Stocks
Holding onto losers because of emotional attachment is dangerous.
- Compare thesis vs. numbers. If the dividend triangle declines, consider selling.
- Set a timeframe and metrics to track. Example: How Alimentation Couche-Tard (ATD) maintained its value.
- Patience is key: Holding for 5 years is still short-term investing!
Let Go of Good Stocks When Needed
Sometimes, even great stocks need to be sold.
- Hold winners for a long time, but be flexible.
- Companies evolve over time, and so should your portfolio.
- Example: BlackRock (BLK) no longer fits the investment thesis.
- Trimming winners helps protect gains and balance the portfolio.
Bonus: Why Stock Price Alone Shouldn’t Dictate Selling Decisions
- Selling at a 50% profit could prevent you from earning hundreds of percent.
- Selling at a 25% loss could have led to selling everything during COVID.
- Example: Microsoft’s (MSFT) dip in 2022—those who sold missed a major return.
Free Webinar: 5 Steps to Clean Your Portfolio – March 20th at 1 pm ET
Many investors feel overwhelmed by messy portfolios, unsure of what to keep or toss. But ignoring it could be costly.
Join us for a FREE live webinar on Thursday, March 20th at 1 PM ET, where Mike will walk you through 5 simple steps to clean up your portfolio with confidence.
- Learn how to spot problem stocks before they crash
- Get rid of “paralysis by analysis” and take action
- Prepare your portfolio for the uncertainties ahead
Bonus: Stick around for a live Q&A session, where Mike will answer your questions on stocks, sectors, and investing strategies.
—> Seats are limited! Save your spot now at thedividendguyblog.com/webinar
Don’t miss this chance to gain clarity and take control of your investments.
Related Content
Here is an episode sharing a canvas for a complete portfolio review.
Mike reviewed the Canadian Banks Q1-2025 earnings reports in the video below.
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This podcast episode has been provided by Dividend Stocks Rock.
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