On Wednesday the S&P 500 was up 0.3% and is just a shade under its record high of early August. Toronto was unchanged. The Toronto stock index remains noticeably below its highs of early 2011. It’s all time high was back in 2008 before the credit crisis. At last check Toronto seemed reasonable valued at this time. I would not chase the higher performance of the U.S. market at this time. I would tend to have investments in both countries. I have nothing against investment sin Europe and many other parts of the world but have simply not looked at individual stocks in those places and have not looked too closely at global ETFs, though what looking I did did not seem to turn up compelling values although some of the countries were deemed attractive.
Most of our stock picks were up today. But as far as my own portfolio goes, the most notable gainer was Toll Brothers up 2.6%.
Recently I had added to my own already large position in Toll Brothers as its price fell. I bought shares at $32.08 (July 24), $31.21 (August 14) $30.53 (August 28) and $30.15 (Sept 5). Roughly, this took my allocation to Toll Brothers roughly from about 9% to about 12% of my portfolio which could certainly be considered risky. (Perhaps over indulging my appetite for this stock as it fell).
Toll Brothers closed today at $32.50.
So I now ask myself if I should start to trim? I think I should and so have now placed orders to sell just these recent buys at $33, $34, $35 and $36. That is, if it happens to hit those prices in the next month. I don’t know if this sort of add on dips and trim on rallies will work out well or not. I often do this to some degree on an ad-hoc basis, but pre-entering the orders will take any further emotion out of the picture and also allows me to sell even if the stock blips above my sell price only briefly. In any case I will still have quite a large exposure to Toll Brothers even if these sells are all hit.
Recent buy orders that I placed to buy Canadian Tire, Costco, CN, Berkshire and Canadian Western Bank below the recent market price (of a week or so ago) now seem rather unlikely to be filled. But one never knows in the markets. Movements can be sharp and unexpected. The notion that markets are ever or were ever predictable is simply a rose colored view of history.