Learn how to know when to sell a stock or investment.

It’s listener question Friday!

I had a question from a listener about their investment portfolio:

Linda,

It is my very first stock "try's" . A very dear friend of mine started this portfolio for me and she has tried to teach me a little about stocks along the way.

I want to learn more. I just am looking for a little direction.

I have about $100,000 to invest. This is outside the my emergency savings of about $75,000.

_______

She sent me a list of her stocks and I could see a great many of them were not quality names nor were they profitable.

It concerns me to hear that a friend is making your investing decisions. You want to be in control of your investments and know what you own and why.

Why do you want to own certain companies? Are you familiar with the company or do you think the sector they are in is going to be fast growing and profitable?

Remember you are buying businesses.

I couldn’t tell the investment strategy from what I saw, so I’m a bit perplexed how your friend was selecting your stocks.

Having said that, many of your stocks had losses. If you have more than an 8% loss, perhaps consider selling it.

I’m not saying that at the bottom of the market after a steep decline, in which I might attribute some of the decline to the market But this is in a bull market, so I would consider selling and reallocating the money.

You want to sell your losers and keep your winners. Give the winners time to run and continue to go up. Stocks that have been rising tend to keep rising, so keep those.

I would get yourself up to speed on investing (good job joining the VIP Experience) so you can learn about investing. We have all levels of investors in the VIP Experience and I’ll be keeping you up to speed with important articles and market commentary as well as ETF selection.

I have lots of podcasts about investing, so I suggest you check them out. They are evergreen and most don’t get dated. I try to keep them classic so you can use them as your investing library along with the VIP Experience.

When creating an investment portfolio from scratch, I always recommend that investors follow an asset allocation model meaning they have some large caps, mid caps, small caps and international. You can add real estate and precious metals to that and have a well-diversified portfolio. If you want to add bonds, I would use short-term bonds since we are now in a rising interest rate cycle.

I prefer to use ETFs because they are low cost and diversified, so you’re buying a basket of stocks and not individual stocks. That’s a better plan for a beginner.

I'd love it you'd leave me a review on iTunes or Stitcher Radio.

Move your net worth in the right direction by getting “11 Quick Financial Tips to Boost Your Wealth” at www.lindapjones.com.