Our position in Western Midstream Partners (NYSE: WES) fell more than 15% in the past week, as volatility in oil stocks continues to wash through the market.

We bought Western Midstream for its strong dividend. However, the collapse in the oil price brought with it uncertainty about the flows of oil from the Permian basin.

While Western cut its dividend, it wasn’t as severe as many of its peers. Shares took a sharp drop in March — which prevented us from getting out with our trailing stop — before doubling from their recent low.

But the trend is now against us…

We saw its share price trade sharply lower over the past week.

This kind of volatility isn’t what we want in a dividend stock. At this point, it would take many years’ worth of dividends to recover our capital.

There are better opportunities in the market today. We can put this capital to work in a different company and get much stronger results. That’s why we’re going to sell our position.

Action to take: Sell your shares of Western Midstream Partners (NYSE: WES). Set the limit order for $11.

It might take a few days to fill the order, but that’s OK. Be patient, and we’ll get our price. We will record a 41% loss on this position.

Without a doubt, this is a disappointment. The oil market took a swift and violent turn. And over the past few months, some iconic oil names went bankrupt. The latest, Chesapeake Energy, went through several iterations — from natural gas to natural gas shale to oil shale, before finally succumbing.

That’s why this sector continues to be volatile.

The market changed on us. We need to adapt our strategies to match. We need to pull out our remaining capital and put it to work in another sector, like gold or silver.

If you have any questions about this trade, just reach out to realwealth@banyanhill.com.

Don’t worry. We’ve got this.

Regards,

Matt Badiali
Editor, Real Wealth Strategist