Friday, December 13, 2013
Replaced ABBV with CVX
I need to make this a brief post, but I went ahead and replaced ABBV with CVX today. ABBV was never meant to be a long term position for me, I knew this all along because I'm simply not comfortable with pure pharma stocks. I'm not saying Abbvie is a bad company, rather it's just not for me. Chevron, however, is one of my core stocks that I'd be comfortable holding through thick and thin. I've been meaning to acquire additional CVX shares for quite some time now. I get to kill two birds with one stone here.
Some may be wondering why I would choose to make this move only a few weeks before the new tax year. I could wait a mere 19 days before selling and then settle capital gains taxes during 2015. A very valid point. Basically I'm disappointed with myself in that I've had to sell so many positions this year. I want a clean slate for 2014 and am willing to take some bumps and bruises now in order for that to happen. I will owe approximately $225 worth of capital gains taxes for the ABBV sale, it's not the end of the world.
I lose $86.40 annual income with the loss of my Abbvie shares. I gain $100.00 annual income with 25 additional Chevron shares. CVX currently yields more than ABBV (since when? jeez!) plus I added additional capital to the purchase for good measure. That's where the income difference comes from.
Core Position: Yes
Speculative Position: No
Expectations: Steady income; 7% annual dividend growth
Automatic Sell: Dividend cut
Consider Selling: Frozen dividend, business fundamentally changes, management becomes untrustworthy, fundamentals deteriorate, wildly over valued stock price, or position fails to meet expectations.
I hope you all enjoy your weekends. Don't take your time on this earth for granted!