For the majority of my investment career, I have been more of a buyer than a seller. Given that we are in a new year, I decided to take an inventory of what was performing in my portfolio and what wasn’t, which stocks to take profits, and which laggards to divest.
Netflix (NFLX) has gained significantly from my buy-in point, and it was time to be a disciplined investor and liquidate to take profits and reinvest. Though I dollar cost-averaged my buys of Merck (MRK), FANG, and GE investments, I felt their performance at an 18% combined net growth wasn’t acceptable for my portfolio, and I liquidated those holdings.
With the combined proceeds from the sales of NFLX, MRK, FANG, & GE, I reinvested 75% of it into Jeff Bezos’ more stably performing Amazon (AMZN). The tech giant has performed magnificently in growth opportunities and does not seem to be slowing down any time soon. Bezos does not appear to be at a loss for ideas about opportunities to invest his cash flow, and I suspect his “To-Do List” is on the order of a formal list of 100 things to do for the next 20 years to continue AMZN’s growth path.
I invested the remaining 25% of the liquidation proceeds into the NASDAQ Spider (QQQ) given the strong performance of the NASDAQ index over the past year and the fact the that market spiders are relatively secure over holding an individual security. I am a believer that the index spider gives investors a great hedge against market downturns given its broad range of holdings.