How long should we hold our stocks, and when should we sell? I’d say the ideal answer to the first question is ‘forever’! The second one is trickier, but a lot depends on how a company is going.
If it takes a turn for the worse and just doesn’t look good any more, then yes, that can be a great time to sell.
But today, here are three I don’t think I’d ever want to sell.
High street bank
I know Lloyds Banking Group (LSE: LLOY) has has a tough time. And it’s still below what I first paid. The five-year price chart isn’t nice.
I’ve had some good dividends though. And that helps a lot.
But there’s one key thing that makes me want to hold a bank stock for ever. If the UK grows in the long term, banks just have to grow too, don’t they? Cash is the life blood of business. And banks can bring in bags of it.
The ups and downs of the past few years don’t worry me, as I rate bank share prices as way too low now. They make me want to buy, not sell.
Even with the clear short-term economic risk, I think bank valuations should get back on track when the outlook picks up.
Until then, I’m getting around 5% a year from those dividends. That’ll do.
Housebuilder
Persimmon (LSE: PSN) is my next keeper. And its shares are in a bit of a slump now.
It’s down to high interest rates, and weak house prices. But we’ve seen it before, and will again. And each time we’ve then had a new bull run that’s hit new highs.
Will we get that again? While we face a chronic housing shortage, what can stop it?
When things are going well, Persimmon can pay big dividends. In fact, it’s been paying back surplus cash too. We even had a few years of 235p per share in total. On today’s price, that would be a huge yield of 18%.
I swear I never want to sell Persimmon. But if I owned Taylor Wimpey instead, for example, that’s the one I wouldn’t want to sell.
Some of everything
Last, my top pick. If I could only hold one stock for life, this would be it. It’s City of London Investment Trust (LSE: CTY), and I like it for two key reasons.
First up is dividends. The yield is decent at 5%. And the trust has raised it every year for the past 56 years in a row.
There lies the main risk though. Should that record come to an end and we see no rise one year, I think the shares could slump.
But even with that I think low risk. The other thing I like is diversification. I get a stake in Shell, BAE Systems, Diageo, HSBC, AstraZeneca, Imperial Brands… and a whole load more blue-chip stocks.
And I get it from just one buy, and pay just one charge. I could see myself (one day) with only investment trusts in my ISA… like this one.
