I think we all know Chevron is the definition of broke. I am on the Big Foot TLP project team and it will be years before this project even gets deployed after the fiasco in June. I am in my 30's and with Chevron for 5 years. I am now ensuring I diversify but I did not for 5 years....stick it out or sale with this uptick....just looking for some opinions. Thanks.
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You should have sold last July and bought puts. Way to much focus in chevron on diversity and yoga. Not much focus on results. Anyone who worked there could figure his out. Anyone ever see the movie Pleasentville?
Selling low is not desirable but it beats the heck out of riding a stock down like a falling rock cuz you didn't want to take any loss at all and didn't sell. You could cut your losses and reinvest in something with a better balance sheet, cash flow and growth profile outlook and recover your losses on the sale of CVX faster than holding onto CVX. look at BP...think it was a good idea for investors to keep holding that stock?? So many silly so-called investors on this site that don't have the saavy to manage their portfolios because the only thing they know to do is "buy low sell high." People that can't (or won't) think beyond that catch phrase are not the smartest people to be taking financial advice from.
Sell low... that's always a smart thing.
I think 145078 summarized the options succintly. I personally think if you have a 5 year time frame, you should just ride it out and even add CVX if and when it hits new lows. Despite all the missteps, this company will become great again some day and reach new heights.
The OP's question is deeper than just when to buy or sell. No one has a crystal ball, and we are all grown ups here and know that. It is about diversification and appropriate levels of risk. A lot of people could maybe stand to rebalance their 401K. Otherwise it isn't investing. It is gambling. Like putting all your money on 38 red and spin the wheel.
Now we have market timers posting on the layoffs forum? SWEET!!! I just spoke to Nostradamus this morning, he told me what to do !!! LOL !! Then another little bittie burdie wurdie tells me when to sell! What are we dealing with here, 5 year olds? Remember boys and girls -no one makes as much of a killing when you trade as your so called "financial advisors" who make money on commissions. Up or down, it's new Cadillac time for them!
Will it go down from $80. Yes by how much ??? Anyone's guess. We have not turned a corner in the O&G market, yet. Will chevron go back to $130. Yes by when ???? anyone's guess. Your key is you are young and have time to ride the market. Just remember what ever you do ...... Max out your 401K and never borrow against it. A wise old rich man told me "you can never have to much money when you are old, it can not make you younger but it can make you feel younger when that young gold digger is on your arm"
Here is some advice from professors of Finance and Banking who study and lecture on this stuff for a living: Don't put more than 20% of your portfolio allocation into any single company stock. That means that if you have more than 20% allocated to CVX, you should reduce that. Sell high, buy low is great if you can time the peaks and dips, however, keep in mind if you unload a stock like CVX that could very well fall further, especially if the dividend is cut this year or next, you will be smart to have sold it where it is now and diversify into other funds that can produce a substantially higher rate of return over the next few years. The dividend yield is the annual dividend per share divided by stock price, and is currently 4-5% for CVX. Look to see if you can get at least a 2-3% dividend yield on other stock mutual funds. Also, choose funds with very low cost ratios such as index funds of 0.02% for example, so less money is going out of your fund to pay portfolio managers who charge higher cost ratios for actively managed funds such as 0.42-0.95%. Also, you should invest 30-40% of your portfolio in international stocks, because market dynamics and currency fluctuations might help or hurt you in the US market but not so much overseas (or vice versa). Lastly, consider some exposure to funds other than equities for greater diversification. At your age, no more than 10% of your portfolio needs to be in bonds or REITS (Real Estate Investment Trusts). FYI, stock price is theoretically the NPV of the future free cash flows into perpetuity (after all debt interest and other obligations) divided by the number of shares outstanding. CVX has diminishing free cash flow and reduced NPV on MCPs due to late online starts. Keep that in mind when thinking about stock price. If there is a dividend cut, it is a signal to the market that a company is in financial distress and typically the stock falls immediately by 10% or more. That is why CVX will likely continue to borrow and sell assets to pay the dividend, but this will further hurt the balance sheet.
OP, I cannot make a blanket recommendation for you or anyone about their 401k investments. However, you mentioned two key points about yourself. You have only 5 years with company and you are young (in your 30's). Hopefully you are fortunate enough to stay working with Chevron for another 25 more years. Never make large financial decisions in haste nor rely on the advice of people you don't know well (this forum included). You have Chevron stock that that has been beaten down lately, but has seen an uptick in the last 3 trading days. But, you still have your shares of stock. It's your choice to sell all or even a portion of your stock. Where would you invest the money if you sell it? It's a personal choice. You still have time in your side to make up any loses. You also said it yourself, diversify your investments and understand the fundamentals that affect your stock or mutual fund. Keep an eye on them at least monthly and become interested in learning more about the financial world that affect your investment sector. Keep investing and don't ever borrow against your 401k. Your question tells me you are a smart person. Trust yourself and seek good advise. Understand and you will always know your decision is the correct choice. Good luck.
I sold at $126 except for 50 shares because I don't like the risk of hitching my retirement cart to my job horse (just in case Chevron goes Enron). I always say that everything in my control I do the right way every time, but I can't control what the accountants do. You have three options: 1- Sell now (low) after you bought before (high). That's dumb unless you think CVX is going out of business. 2- Go all in on CVX and average your cost down. Dumb as well because of cart/horse analogy. 3- Redirect future investments into a more diversified fund and wait for CVX to go back up before selling (maybe a few years). I know what i would pick if I were you. Good luck. Your mileage may vary.
Broke isn't the right word. They are asset rich and cash poor. Much like a young employee many years ago who bought too much house for his salary. As for your Chevron stock, I'd go to a stock broker's website (Charles Schwab, E-Trade, Vanguard, etc) and read the reviews of the professionals. Are they worried about the total collapse of the company? What do they think about the dividend and potential cuts? How much can Chevron borrow to get through this period? Read the opinions of the people that make their living in the market and then decide for yourself.