Deciding when to buy a stock is often easier than determining when to sell. As you’re reviewing your portfolio at year-end, consider these situations that may indicate the right time to sell.
When there are no tax consequences. If you hold stock in a retirement fund, you may want to reap gains with no tax impact.
To take money off the table. If a stock has had a nice run, you could sell a portion to recoup part of your investment. You can continue to invest in the stock but with locked-in gains.
A shift in fundamentals. Consider selling if the economy changes or an entire industry becomes vulnerable due to negative news.
When you’ve given up on a stock. If a stock has been declining or flat-lining for an extended period, selling low now can save you from having to sell even lower later on.
To take a contrarian position. If the market has gotten frothy and all the news is optimistic, choosing to harvest your gains could be a wise move.
When cash becomes attractive. A gloomy economic outlook could be reason to increase your cash reserves. Having a disciplined selling strategy means giving as much thought to the sale of a stock as to the purchase. Contact us. We’re here to help.
Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in McLean and Tysons Corner, VA. Gilliland & Associates is known for our superior knowledge and aggressive interpretation and application of tax laws. We help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and Twitter.