I realize this forum suggests a diversified portfolio, but for the past several years, a significant portion of my portfolio has been invested in a single stock. Overall, I am monetarily ahead, but in the past two years, a government money market fund has had a higher yield than this stock's dividend yield. The stock's rate of return over the last two years, has greatly lagged the performance of the S&P 500. For the majority of the time that I have held this stock, I have chosen the dividend reinvestment option and in the past few months. While I no longer have selected that option, in the last few months this share price of this stock has declined significantly to below the average of what the share price was when the dividends were reinvested into additional shares of stock.
For some reason, this stock's share price trends upward very slowly, but declines rapidly. The stock is an ADR and is listed on the NYSE. It is a very large global company headquartered outside of the United States and its products/services are in a well established sector and in many countries, they have very large market share. I would consider their products/services to have relatively inelastic demand. To my knowledge, they do not offer products/services in the United States. Despite the global nature of the company, there is very little news online about the company. This could be because a certain family who have been on the Board of Directors own the majority of company stock shares. The company regularly announces share buybacks, but this hasn't really affected the outcome of the stock in my opinion. If a certain family owns the majority of company stock shares, what influence do they have on the share price? Is there any benefit to them for the share price to decline to 52 week lows?
In the past, I recall financial analysts on television commenting that when the U.S. economy and U.S. stock indices are performing poorly, to consider investing in stocks in companies that operating outside of the United States. This company does not have any products/services available in the United States and I don't think the stock is included in any major U.S. stock indices. However, major investment companies do hold shares of this ADR stock on the NYSE, so I am thinking if these major investment companies sell their holdings during a poor economy/stock market period, that may override any positive financial performance the company may have outside of the United States. I don't know if in today's global economy, owning a foreign stock/company is a hedge against a declining U.S. stock market?
I realize that no one can predict the future, but how long would you wait for the stock share price to increase back to the levels it was at in the past few months? In the past few months, the share price has dropped about 15%. Would it be better to sell this stock and put the money into a single broad market or sector ETF? I don't know how long I would be waiting for the share price to recover or the share price could go down even more, while the S&P 500 index could increase. Of course, the reverse could occur and the broad U.S. stock market index could decline while this stock share price increases. Based on my personal financial situation, I am willing to take risk. All of my gains in this stock would be considered long term capital gains and there would be long term capital losses on the shares that were acquired through the dividend reinvest program that are currently valued less than at the price they were purchased at. If I had sold my shares two years ago and transferred all the money to a government money market fund, I would be $$ ahead. What are your risk tolerances and holding patience levels when investing in single stocks?
Thank you for any comments/opinions.
For some reason, this stock's share price trends upward very slowly, but declines rapidly. The stock is an ADR and is listed on the NYSE. It is a very large global company headquartered outside of the United States and its products/services are in a well established sector and in many countries, they have very large market share. I would consider their products/services to have relatively inelastic demand. To my knowledge, they do not offer products/services in the United States. Despite the global nature of the company, there is very little news online about the company. This could be because a certain family who have been on the Board of Directors own the majority of company stock shares. The company regularly announces share buybacks, but this hasn't really affected the outcome of the stock in my opinion. If a certain family owns the majority of company stock shares, what influence do they have on the share price? Is there any benefit to them for the share price to decline to 52 week lows?
In the past, I recall financial analysts on television commenting that when the U.S. economy and U.S. stock indices are performing poorly, to consider investing in stocks in companies that operating outside of the United States. This company does not have any products/services available in the United States and I don't think the stock is included in any major U.S. stock indices. However, major investment companies do hold shares of this ADR stock on the NYSE, so I am thinking if these major investment companies sell their holdings during a poor economy/stock market period, that may override any positive financial performance the company may have outside of the United States. I don't know if in today's global economy, owning a foreign stock/company is a hedge against a declining U.S. stock market?
I realize that no one can predict the future, but how long would you wait for the stock share price to increase back to the levels it was at in the past few months? In the past few months, the share price has dropped about 15%. Would it be better to sell this stock and put the money into a single broad market or sector ETF? I don't know how long I would be waiting for the share price to recover or the share price could go down even more, while the S&P 500 index could increase. Of course, the reverse could occur and the broad U.S. stock market index could decline while this stock share price increases. Based on my personal financial situation, I am willing to take risk. All of my gains in this stock would be considered long term capital gains and there would be long term capital losses on the shares that were acquired through the dividend reinvest program that are currently valued less than at the price they were purchased at. If I had sold my shares two years ago and transferred all the money to a government money market fund, I would be $$ ahead. What are your risk tolerances and holding patience levels when investing in single stocks?
Thank you for any comments/opinions.
Statistics: Posted by DTalos — Mon Nov 25, 2024 2:26 am — Replies 10 — Views 448