Is it Time to Sell Your Dividend Stocks?

The first four-plus months of 2013 have been kind to most investors, and especially kind to investors focused on large-cap dividend growth stocks. So, is it time to take those gains and go home? Maybe. To answer that question, however, investors first need to disconnect themselves from the headlines and “the market,” and instead focus on the specifics of each company stock in question.

Simple Questions Need Clear Answers

Why did you buy it? (Was it selling at a discount?) Why are you holding it? (Do you enjoy those dividends?) Has your financial situation changed since you bought it? What do you want from it in the future? (Growth? Dividends?) As I’ve written before, whether you use mutual funds, exchange-traded funds (ETFs) or individual securities, Buy, Hold & Hope, is not a viable investing platform. But, how do you know when a “hold” should become a “sell”? Dividend growth stocks can be especially tricky on the sell side. After all, such stocks are typically bought for historical rising income. None the less, every stock needs an exit plan.  

Intellect over Emotion over Greed

The very short term tale of Pepsi. As 2013 began, investors could buy a share of PepsiCo (PEP) for  $68.43. At the time, the stock was yielding 3%, had raised its dividend for 42 years and had a 10-year dividend growth rate north of 10%. Such numbers begged for a closer look. Fast forward to early May. While the S&P 500 is boasting a total return of nearly 15%, Pepsi has rewarded investors with a 22% total return. If you bought the stock, purely for income, how can you argue with getting nearly 7 years of income in 4 short months? Well, argue you should, as you decide what to do with your shares. Do you hold for the 3% yield on cost, which is tough to replace? Do you sell all those shares and smile with your healthy gain? Do you take some profit, and hold the rest? The answer lies in a combination of why you bought the stock in the first place and where you are today on your financial journey. If you don’t have a plan for your investments, I recommend finding a fee-only investment advisor who can offer advice and recommendations without the inherent conflict of commissioned investment sales.

OSBORN Wealth Management is a fee only advisory firm dedicated to providing conservative asset management, experienced retirement planning and unbiased financial advice. Blog posts are intended for informational and educational purposes, only, and are not an offer to sell. As individual's circumstances are always unique, please consult a professional before embarking on any changes to your investment, planning, tax or legal situation. For questions on this Blog post, or general inquiries about our professional advisory services, please give us a call at 219-362-8567 or email me at

SYNERGOS Financial Services d/b/a OSBORN Wealth Management is a Registered Investment Advisor currently registered in the states of Indiana and Michigan. The firm provides fee-only portfolio management and advisory services, and is not associated with any banks or broker-dealers. For more information, please view our current ADV filing.

Website Design For Financial Services Professionals | Copyright 2024 All rights reserved