Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisors prior to making any decisions based on information on this website.
A couple of entries ago I discussed a selling strategy that would always leave 10% growth in the remaining shares. This is a bit conservative for me, and will reduce the possible sales. Let's try another approach with only a 1% growth in remaining shares.
Using the same example of 1000 shares of a $10.00 stock, at what appreciation level would be able to sell 1/4 of the shares and have a 1% gain in the original purchase, that is have the remaining shares to equal 1.01 x $10,000 = $10,100? Since we are selling 1/4 of the shares, we would have 1,000 x .75 = 750 shares. And the price at the sale would need to be $10,100/750=$13.47. Thus, the first sale would be at a 35% appreciation point!
And the second sale? Again, the value would be $10,100 x 1.01 = $10,201. And the remaining shares? Well, that would be 750 x .75 = 563 shares. Or the price/share would be $10,201/563 = $18.12. Thus, the second sale would be at an 81% level.
You can see that this is a little closer to my original strategy and a little more do-able.
The third sale? $10,201 x 1.01 = $10,303. And the number of shares remaining = 563 x .75 = 422 shares. And the price? $10,303/422 = $24.41. Or a 144% appreciation level.
We can calculate the rest of the sales as we go!
Bob