randomep Posted February 1, 2014 Share Posted February 1, 2014 For such a hardcore investment forum I am surprised no one has mentioned capital gains tax issues. I am talking about people who invest in the tax-shelted accounts (IRA, RRSP, 401k) but who also have money leftover and must invest in a non tax sheltered account. How does capital-gains tax affect your investment decision. For my situation I generally if possible invest in a security by putting half in tax shelted and the other half in non-tax-sheltered. When the stock runs up and I want to sell I delay capital gains taxes and sell tax-sheltered account. But then if the stock runs up even more and I want to sell more I almost always harvest my capital losses to offset the capital gains. But if I don't have enough capital losses then i got a problem. I have found that I tend to hold a stock in that case, and often it has worked well because that stock runs up even more. So this situation has caused me to be a more patient investor. But what if I really know that the stock is gaining less than my (opportunity) cost of capital? What would you do in a similar situation? Note here I am mostly talking about long stocks, no shorts, no options. But tell me if you use them too. I have heard lots of talk about people should avoid taxes but don't say how exactly. One exception is I heard some articles that mention in a survey of rich people, the survey found the rich people buy a large number of holdings, this way when they want to sell they have much more chances of finding offsetting capital gains. But that just delays the inevitable. thanks Link to comment Share on other sites More sharing options...
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