- 1). Evaluate your current portfolio. Making investment choices based on short-term events or alarmist news reports is an all-too-common mistake. Taking another look at one's current investments and comparing them to the investor's needs and risk tolerance can help avoid rash decisions.
- 2). Determine how much stock to shift into cash. Many portfolios are constructed on a percentage basis. In this case, decide how large of a percentage to convert to cash. For portfolios constructed around dollar amounts or singular investments, determine how many positions or how much money you wish to convert to cash.
- 3). Evaluate current stock investments. Determine which stock investments you want to continue holding and which ones no longer fit your investing strategy. Consider selling positions at a loss to offset positions sold at a gain to minimize taxable income.
- 4). Enter your sell orders. Contact your brokerage firm by telephone, in-person or online. Deliver your sell order by stating the stock symbol and the number of shares to be sold.
- 5). Evaluate the interest rate paid on cash in your brokerage account against other cash accounts you may have. Transfer funds that you do not anticipate needing to reinvest in the near future to one of your highest interest-bearing accounts.
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