Don’t forget to take some profit
When you want to make money, don’t be afraid to actually do it.
Let’s look at the stock market for today. It did great for the first time in a couple of weeks. Since it has jumped up a bit, it may be time to cash some of it in.
Don’t worry about the taxes on it. It’s better to pay some fraction on profits than to skip out on the profits all together. We all know that the day after a market rally, many of the gains will be lost.
So why not cash in stocks before they go down, and re-buy them again when they are down there. Of course if you know the tops and bottoms of any given stocks, then you already know this.
And If I knew the tops and bottoms I would have sold and bought in much better positions.
Now I’m not saying that in the morning the market will go back down, who knows what it will do. But historically it likes to drop gains twice as fast as it makes them.
I’m not sure I agree with you here.
I know too many people who have their investments trying to time the market. It’s hard to judge the tops and bottoms of the market over the short term.
I know a lot of people who have retired from their stock market investmenst, by buying carefully and holding their investments over the long haul.
My suggestion is carefully research the market and buy growth stocks for the long haul.
But I agree that worrying about taxes is foolish. Your concern be for the stock performance and the performance for it’s group, not how much tax you will pay on your profit.
June 16th, 2006 | #
I agree that it is hard if not impossible to tell where the tops and bottoms are, but many times people will neglect to buy or sell when the money or opportunity is there. All because they want more. If anyone is disciplined enough to not be greedy and cut their losses, I believe they can make a nice chunk of change.
June 20th, 2006 | #