My SIF screen is not providing any new stocks for me to consider buying at the moment. Historically, this has sometimes been an indicator that the market looks fully priced on a short-term view. I’m not sure if that applies in the unusual circumstances we’re living through today, but in any case there’s nothing to buy. 

With no new shares to consider and a month-end review due next week, this week seems like the right time to continue the development of my new selling rules. Last week’s piece generated plenty of high-quality discussion in the comments - thank you for sharing so generously. I look forward to seeing what you make of my solution this week.

I won’t deny that I’m a little nervous at making these changes. At the time of writing, the SIF folio is up by about 30% since inception (April 2016), excluding dividends. The FTSE All Share index is up by less than 5% over the same period. I’ve got plenty to lose if I get it wrong.

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SIF Folio (blue) vs FTSE All Share (grey)

However, there’s always room for improvement - at least I hope so. So as promised last week, I have devised a new set of rules for selecting which stocks I should sell. My aim is to allow successful picks to run until they show signs of deteriorating performance. 

That’s not easy to quantify. But in broad terms I’m using the same metrics as in my buying screen, but with different values. I’ve also made a few additions.

The new selling rules

I don’t want to repeat last week’s article here, so I’ll refer subscribers back to that piece for a more detailed overview of the thinking behind this change. 

My new selling screen includes rules covering all three of the main factors - Quality, Value and Momentum. I’ve listed each rule below, along with a brief comment on the thinking behind each choice.

For the sake of clarity, this screen is intended to highlight shares I can continue to hold. In other words, if a share doesn’t show up in the results of this screen, I’ll have to sell it.

Rule

Comment

StockRank Style excludes Momentum Trap and Sucker Stock

As I explained last week, I don’t use the StockRanks to select stocks for SIF. But I’ve never…

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