How to reduce your capital when you don't want to..

[buns]

I didn’t really know what to name this thread to tell the truth. Essentially the situation I'm faced with is I have to make a re payment, and require to take a shaving of my portfolio to make it.

I was offered a lump sum a while ago, which i took, invested and made 30% on in quite quick time. Now I need to repay that principal - which consists of about 25% of my portfolio.

I'm an investor, but am thinking for this I need to act as a trader and look for the stock/s which have the lowest return over the next few periods whilst I build up enough to recoup this. Or simply pro rata my whole portfolio? Hm I'm not a fan of brokerage..

I really don't want to sell anything right now, yet have to. Surely some of you guys have been through this before. Any idea's on how to do this?

The 3 stocks I have lined up to cull are XRO, SKC, IFT and ROC on the asx.. These combined are about 35% of my portfolio.

Any ideas welcome

[Phaedrus]

If I were in your position, I would sell my worst performing stocks. Without knowing what you intend to hold on to, it is hard to comment on whether you should sell XRO, SKC and IFT. ROC looks worth a bullet.

You may be tempted to sell the stocks on which you have made the most profit. Don't even think about it. Remember the old rule :- Sell your losers and let your winners run.

[dragonz]

Hi Buns

A couple of options you may want to consider.

Use the vaule in your shares to facilitate a loan.

http://www.macquarie.com.au/mq/prime...ing_shares.htm

Or start up a margin trading account. Sell down 35% of your holding then on the next pullback, stock them up again using your margin account.

http://www.igmarkets.com.au/cfd/margin-rates.html - if your disciplined and aware of the risks .

Or better still start up a margin account with E-Trade or ASB securities.

[OldRider]

Phaedrus has given you some good advice. I expect you will face the same problem many times in the future, at the moment, after many years of investing I am faced with insufficient cash for all the SPP's and rights issues offered, and have had to sell what is often good to acquire what is better.

At the very start of my investing I started a system which I still use, easier now with a computer, value all your holdings calculate the percentage of your portfolio each represents, then weekly revalue,recalculate and monitor,after sorting according to the change in percentage, then when a sale is required sell the lowest.

Sales and purchases alter things but overall this method has worked well enough for me to still use it

[shasta]

I didn’t really know what to name this thread to tell the truth. Essentially the situation I'm faced with is I have to make a re payment, and require to take a shaving of my portfolio to make it.

I was offered a lump sum a while ago, which i took, invested and made 30% on in quite quick time. Now I need to repay that principal - which consists of about 25% of my portfolio.

I'm an investor, but am thinking for this I need to act as a trader and look for the stock/s which have the lowest return over the next few periods whilst I build up enough to recoup this. Or simply pro rata my whole portfolio? Hm I'm not a fan of brokerage..

I really don't want to sell anything right now, yet have to. Surely some of you guys have been through this before. Any idea's on how to do this?

The 3 stocks I have lined up to cull are XRO, SKC, IFT and ROC on the asx.. These combined are about 35% of my portfolio.

Any ideas welcome

Place a wall chart above your computer, that says:

#1. Sell your worst performing stock first

#2. See above

#3. If you think about doing something else, refer back to #1

[Ash]

Thanks everyone some very good points mentioned.

Dragons your point abt using the value of your shares to facilitate a loan - is this option available with NZ broking firms? If so which one does? PS. not a big fan of margin trading.

I have done this by using my capital in my property to invest in shares but wasnt sure if one could do that with shares?

Thanks once again
Ash