CSU:CC - The Investor's Sleep Test: When to Know it's Time to Sell
2024-04-18 16:10:00 ET
Have you been staying up at night worrying about your investments? It’s likely you’re not the only one. In fact, as of 2023 money remained Canadians’ top stressor for the sixth year in a row. And that’s likely to continue in 2024.
It was found in one study that 40% of Canadian adults reported losing sleep worrying about money. Whether it comes from not making enough or losing on investments, there is a way to start catching more shut-eye at night. And that’s to know when to hold ‘em and when to fold ‘em.
When to sell
The key to the sleep test is the ability for an investor to remain calm and untroubled by market fluctuations or investment decisions. The sleep test should be able to gauge whether an investor can sleep soundly at night without worrying about their investments.
The idea should be that your overall investment strategy should align with your risk tolerance. And the sleep test will tell you exactly what that tolerance will be in terms of your long-term goals.
If an investor finds they are constantly stressed or losing sleep over investments, it’s likely time to sell or trim their investments. From there, they’ll need to create a less volatile or more diversified portfolio. Perhaps consider investments in lower-risk assets, such as bonds, Guaranteed Investment Certificates (GICs), and treasury bills.
When to buy
Investors could also be up at night if they feel they’ve been missing out on opportunities to create long-term growth. While much of a portfolio should be protected against the risks of the stock market, some risk can mean higher capital returns.
In this case, you might be up at night worried that you’re not going to have enough for your long-term goals. And that can be because you aren’t adding enough risk to your portfolio. So, there could be some stocks you’ve long been thinking about that you believe are strong but haven’t invested in.
Therefore, to help you sleep better, it can be a good idea to meet with a financial advisor to see their thoughts on investing in these stocks. And a great option to get you started would be a lower-risk option, such as Constellation Software ( TSX:CSU ).
Be boring
While CSU stock might be a tech stock, the company has a simple strategy. And simple is key here, especially if you want lower stress and higher results. CSU stock buys up essential software companies that provide value to its portfolio. The company is then able to corner the market in these areas. This makes its products essential to the companies and even governments that use them.
This acquisition strategy has led to massive growth for the company over the years and should continue for years more. In fact, there have been multiple spin-offs of the stock providing even more exposure for the company and investors.
So, if you’re looking for a safe solution that will help you sleep at night while still gaining returns, CSU stock is certainly a great place to start.
The post The Investor’s Sleep Test: When to Know it’s Time to Sell appeared first on The Motley Fool Canada .
Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy .
2024