re: Just inherited GE stock

Do you think the stock price is going to go up or down when they cut the dividend?

I see GE just as I did AIG.

I am extremely bullish on GE long term. So it’s not a fair question


ETA: everyone knows they are cutting it so it’s certainly priced in right now.

I agree with the bulls. GE will rebound nicely in time and the dividends (even when reduced) are nice

Sit on it. It’s house money. Let’s see where it goes

quote:

---

Without knowing how big of your overall portfolio that is, it's hard to give any advice. You could be a big believer in the stock, but if it's more than 10-15% of your overall portfolio it'd be stupid to keep all of it.

---

Whether it's a gift or he bought it, this ^^^ is the advice that most any prudent financial advisor would give him. When increasing share price or exercising options have taken me above that range with any individual equity, I've always lightened up. Hoping and praying for good times ahead (rolling the dice) just isn't a wise way to manage your portfolio. It's all about managing risk.

If he had a C-suite position at GE, he might have to accept that his (stock based) compensation would put him above this level. But I don't believe that's the case.

quote:

---

Imagine that. A prudent financial advisor telling you to sell something so he can make a commission. Some terrible advice in here. GE is already divesting and is sure to rebound.

---

Where do you get the idea that anyone is making a commission? This suggested single stock range has been around for many a moon. It's not like this is some sort of new age concept.

As far as it being "sure to rebound", how do you know this? Even John Flannery isn't singing that song. You have a belief. That's all. Maybe you're right. Maybe you're wrong. But anyone who is a serious, seasoned investor (and not a wishful gambler) would keep single stock positions in a reasonable allocation range, so that they would be diversified enough to participate in upside, while limiting any damage done to the portfolio by an unexpected downturn.

It's not as complicated (or as simple) as you're trying to make it. Using a basic allocation principle that's been around for decades (and has absolutely nothing to do with someone getting a commission), a few people gave him an answer that I consider to be good advice. I bought a boatload of AAPL when it was in the $30's years ago and I believed in the company's prospects. I was right. OK, big whoop. But once the appreciation caused it to be overweight in my portfolio, I lightened up. It's an investment rule that I've followed for decades. Maybe you have rules that you follow. Maybe you don't. Who knows?

Anyway, if he believes in the prospects of the stock and it fits within that range, then sure, keep it. But neither my opinion nor your opinion (or any other opinion from anonymous message board posters) about a stock should cause someone to actually make a $100K decision. Now that would be bizarre.

But he asked and he got a variety of answers. I'm not sure why that has you so wound up.

Really? What's gone up more over the past 3-5 years, AAPL or NFLX? ;) And if NFLX becomes outsized, I'll trim it too.

When you rebalance, there's no guarantee one way or the other. It's just that when you're overweight, you trim so that you don't have too many eggs in one basket.

How confident are you of that?