Wednesday, 5 August 2015

Would you sell your shares if your stock portfolio was worth 2 million dollars

I often ask myself would I sell all my shares if my stock portfolio was worth 2 million dollars? I could retire from my stressful 9-5 job if I had 2 million dollars so why would I hold onto a stock portfolio of such value.

There are pros and cons of selling such a large stock portfolio and I will consider both here. However I might pass the question onto someone who has a stock portfolio of $200 000 and see what their thoughts are on the matter so it is onto Jason from Dividend Mantra.

Firstly the pros of selling such a large holding. The biggest advantage is that you get a large sum of cash into hand. You do not have to worry about the value of the stocks going down and losing you money as you have access to the full 2 million dollars. Secondly it should enable you to escape the daily grind and stresses of a daytime job. This provides opportunities for spending more time with family and pursuing hobbies. These are brilliant reasons to sell your shares but why might you want to hold onto them?

Okay so now onto the cons of selling a 2 million dollar stock portfolio. The worst thing about selling is the fact that you might lose out on a potential gain. Imagine your $2 million dollar stock portfolio was to grow in value to $4 million. How heartbreaking would it be to lose out on so much extra profit. If I was in this position I could not rest easy nor sleep at night!! There is also a chance that you would miss a regular dividend income which comes with a large dividend stock portfolio. You could keep the income for living expenses or you could use it to grow your stock portfolio even more. Finally some people invest in stocks as a hobby. It takes over their life and they become addicted to it so selling everything might make them feel like there is a huge gap in their life!

I have to say that in my current position if I had a 2 million dollar stock portfolio I would definately sell off a a large chunk possibly up to 1.5 million dollars worth so that I could do something more pleasurable between the hours of 9 and 5 as opposed to work. This amount of money would enable me to never have to worry about money again.

I do hope that Jason maybe constructs a post on how big he would like to grow his portfolio and whether he will ever sell all or most of his stock portfolio.

2 comments:

  1. My answer would be 'no.' There's little to no chance I'd sell a portfolio that size ever. When seeking FI one must realize that we are not looking to accumulate assets rather accumulate income producing assets. It may be dividend stocks, real estate, licensing deals or whatever. The point is to generate income from those assets. Now, if I had a $2 million portfolio of non-dividend paying stocks I would sell and convert to dividend/income producing stocks. A $2 million of dividend payers... no way. I'm keeping it.

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  2. Hi Laura

    It's an interesting question you pose.

    If you sold your portfolio, what would you live on when it has run out? If you keep your portfolio in dividend shares your $2m would generate around $70k per year, more than enough to exist on.

    I would not sell for this reason.

    Look forward to following your progress.

    FI UK

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