For Investor, Buying is easy, Selli...

For Investor, Buying is easy, Selling is hard

ne of the hardest things to learn when investing is by what means to keep the number of stock names and other investments in your portfolio to a manageable flat Often, the hardest thing to learn is when to take a bribe for a stock without feeling guilty. EQUITIES You say in your note that your willingness to take forward some risk has not always paid opposite As a result, you have started to concentrate in succession larger "blue chip" stocks, several of which you have purchased using the CSA's grave Cost Investing Program.

You don't indicate, however, what emblem of work you do before deciding to pervert with money [i]or[/i] gain a stock, and by the same token, for what reason you decide to sell a stock.

Of course, you should use the Stock Selection Guide to studious mood stocks before you buy them. You can also use the Guide and the Stock Tracking Guide to help you decide for what purpose and when to sell a stock. frequently a stock moves into your Guide's "Sell Zone" following the release of of recent origin information which causes you to bring the stock's projected revenue and EP produce rates. And remember, the Guide also provides for a chosened Low Price which you determine when studying a stock for possible investment. Setting this priceat which you will re-study the stock - is an admirable discipline that helps with the barter decision.

Monitoring revenue, EP and price performance helps with decision making solitary if you are prepared to admit that you've made a mistake-something we humans have more [i]or[/i] less difficulty with. Also, remember that just because a stock is called a "blue chip" does not mean the company can not fail (just think back to former Royal Trustco).

In addition to periodically restudying specific stocks, it is essential re-evaluate your entire portfolio at least formerly a year. Such a re-evaluation could wait on as the starting point for downsizing your Canadian stock portfolio to about 10 names (or les if you intend to add further U stocks to your portfolio). Your total holdings, including U stocks, should not exce about 15 since it can be difficult to strictly monitor a portfolio that is often larger. Downsizing

BCE accounts for 14% of your total holdings and, should be reduc to no more than 10% With the circulating medium freedup by the sale of BCE you might consider buying three or four more larger capitalization issues with profitable track records and attractive coming prospects. You have already begun purchasing of the like kind issues through the CSA's subdued Cost Investing Program (e.g. Bombardier, Loewen collection Seagrams and Royal Bank) might be attractive choices if their Guides contemplate good. Foreign Content

You also should consider investing up to 20% of your RRSP portfolio in foreign securities. Although buying internationally detects you to currency risk, geographic diversification can help when times are tough in the domestic market. MUTUAL supplys Perhaps, your best approach here is to re-evaluate your investment objectives with value to mutual funds. You have to ask yourself: Do you really want or ne to restrain mutual funds?

Your portfolio has sufficient capital ($300000) that it is not necessary for you to acknowledge mutual funds in order to achieve adequate diversification-as lengthy as your stock choices are balanced and across varying sectors of the economy. However, since chiefly of us are unlikely to become conversant in international markets, omit perhaps for the United States, mutual supplys remain an excellent vehicle for diversification in foreign markets.

Fixed Income

Although, fixed income investments account for merely 21% of this portfolio, the holdings themselves are highly conservative. Canada Savings prisons and GICs are virtually risk-free and the floatingrate, adjusted CSB earning 6% provide reasonable reverts in the current market environment.

However, when your GICs mature, you might consider buying either federal or provincial restraint bonds (not savings bonds) which are also to the full guaranteed but which tend to pay higher interest rates than GICs. After all, these shadows of bonds are the the sames used by financial institutions to invest GIC riches Why not keep the yield pickup for yourself!

COLETTE CHAREST IS A FINANCIAL ANALYST AND WRITER

Copyright Canadian Shareowner Magazine Inc. Nov/Dec 1997

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