Trending Assets
Top investors this month
Trending Assets
Top investors this month
Learning to Let Go - Additional Thoughts
We'd like to add some additional thoughts to @dissectmarkets excellent post on letting go of stock positions no longer serving you. We should always conduct regular pre-mortems on all our stock positions and mentally rehearse selling out of a stock on clear evidence the thesis for owning the stock is no longer applicable. Even if you have to crystallise a loss, releasing the mental taxation a losing position inflicts on you can be worth it. If there's little evidence you can make back your money any time soon, whatever's left is probably best deployed on better opportunities.

We'd like to throw our hat in the ring and bring up another aspect to "letting go" that few may have considered because it's so far into the future. We're assuming most of you on this site are still in wealth accumulation mode. We're financially free and both getting up there in age (late 50s). We're coming up to 8 years of being retired by choice. As you age, time gets much more valuable. You unfortunately start to lose older family members and even worse, a few friends to health issues.

We've always enjoyed the process of stock picking and investing in general. But to do it right takes time and effort. They say if you love what you do, it'll never be work. That's kinda true, but there's still an opportunity cost involved. The time spent researching stocks takes time away from doing other things. We both have a long list of other time-consuming pursuits we'd like to try in life but never had the time.

So we've had to "let go". We don't need to achieve anything more from our investment portfolio other than long-term market average returns. We're not super-rich, we can't go out a buy a super-yacht and sail the world. But we have enough. We've reached our financial freedom number that we know will sustain us for the rest of our lives in the lifestyle of our choice. That's all that mattered.

We've recently made the choice to go almost full passive on our portfolio. We still have our legacy individual stock positions that we'll continue to monitor (the effort is minimal). But the stocks in any businesses we own that no longer perform because they face secular headwinds will be sold ... within reason. There are capital gains tax implications that unfortunately have to feature in our decision to sell or not. Any proceeds from our disposals will be invested in our Vanguard Total Stock Market Index Fund ($VTI). This is our set and forget investment.

We'll still spend some leisure time reading about the markets during our morning coffee sessions. There might also be opportunities we might spot and act on, but those opportunities would have to be serendipitous. We won't be on active lookout for investment opportunities because our portfolio is pretty much set.

This diagram is a bit of an exaggeration, but we're letting go and choosing the left option:

Image upload

For those still in wealth accumulation mode, you might find yourself entertaining the same thoughts when you reach your financial freedom number and get up there in age. Right now you probably can't imagine life without being fully engaged with the market, but it's unlikely you'll be the same person after opting out of your career/profession. You'll rediscover these ambitions to chase other goals that sat on the back burner because you didn't have the time for them, just like we did. Trust us ... if you're goal oriented and have a variety of interests in your life, when you quit work there still won't be enough time in the day to do everything you want to. You'll wonder how you managed to fit things in when you were still working 9 to 5 !

Dissecting the Markets's avatar
I loved the additional thoughts you've written @jazziyoung and thanks for sharing my post to the community! It's great hearing your interpretation of "letting go" in the sense of investing and I hope others can write their own thoughts on what they see in their investing journey as "letting go". I admit, being an index fund investor who invests in the covered call version instead of the popular version, life does feel like a vacation from the investing sense because we just buy, reap the dividends, and see our portfolios continue to grow.
Jazzi Young's avatar
Already have an account?