Having observed my portfolio peak on February 19th along with the rest of the market, then precipitously decline, then expediently rebound back to where it was...
Yesterday, the market crumbled in the final hour of trading. This is something, as a long-term investor, I probably should have ignored. But I did not...
I read some tweets, and recalled some books, from some trusted sources. I reconciled with my new-ish portfolio philosophy. Mostly, I thought about the days and weeks following February 19th - and the nagging feeling that I could have, and should have, done something.
I feel like the days and weeks to follow May 12th will offer a sort of a 'do-over' for the days and weeks following February 19th.
Earlier this month, I had identified six stocks that I wanted to sell. I had planned to do this over the second half of 2020, but now my prudence was telling me the time is now.
Here are the six stocks (plus one) that I have sold. They all feature anemic growth and undesirable amounts of debt:
American Water Works (AWK): $3.6B revenue, 4% revenue growth, $0.1B cash, $10.4B debt
Canadian National Railway (CNI): -6% revenue growth
Kansas City Southern (KSU): $2.9B revenue, 8% revenue growth, $0.1B cash, $3.3B debt
Norfolk Southern (NSC): $11.1B revenue, -8% revenue growth, $0.6B cash, $12.2B debt
Starbucks (SBUX): $26.7B revenue, -5% revenue growth, $2.6B cash, $22.9B debt
Union Pacific (UNP): $21.6B revenue, -3% revenue growth, $1.2B cash, $29.2B debt
Waste Management (WM): $15.5B revenue, 1% revenue growth, $3.1B cash, $13.5B debt
In their place, I have purchased the first bond holdings of this portfolio's twenty year existence: equal amounts of AGG, HYLB, and USHY. I also have established stop-loss trigger orders - some of which, as of this writing, are very close to firing - for each of the remaining non-Big Five stocks; upon execution, the proceeds will be reinvested into the same three bond ETFs.
The result of all these moves is to:
- Increase focus on my largest (i.e. core) holdings;
- Retain capital gains via automated decisioning; and
- Rebalance my portfolio in favor of lower-risk assets.
