Author Topic: Sell individual stocks?  (Read 905 times)


  • 5 O'Clock Shadow
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Sell individual stocks?
« on: July 05, 2017, 06:22:21 PM »

I understand the benefits of investing long term in index funds to maximize profits and to reduce risk.     My dilemma is that I have roughly $200K in numerous individual stocks in taxable accounts that I have held for a significant period of time (havenít touched them in many years and almost all have had significant gains over that period).     Wondering if I should start selling these stocks and investing the money in index funds, or is it better to just leave the money where it is (considering capital gains tax implications)?  (note: these individual stocks represent roughly 20% of net worth).



  • Pencil Stache
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Re: Sell individual stocks?
« Reply #1 on: July 05, 2017, 07:40:30 PM »
Following. I have about $15k of individual stocks from when I first started investing, some of which only have a couple hundred dollars worth of shares. They are in a Scottrade account so I would have to pay commissions to sell, but I can withdraw the dividends to invest elsewhere, and the stocks don't cost anything just to sit there, but also don't seem to be gaining much value. I go back and forth all the time on whether to sell or just leave them alone.

J. Collins calls these types of accounts "cats and dogs" and suggests using them up first in retirement.


  • Magnum Stache
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Re: Sell individual stocks?
« Reply #2 on: July 06, 2017, 06:16:13 AM »
I wouldn't sell them unless you needed the money.   Here are some suggestions to slowly get moved into more index funds and minimize taxes/gains:

1) Do you make charitable contributions?  Consider opening a Fidelity/Schwab Charitable Fund, its a great way to make your donations via appreciated stock vs. cash.

2) Take all dividends in cash, no reinvestment.

3) Track your tax rates, if you can be in the 10/15% bracket in one year, your gains can be tax-free.

Index funds have tax implications too when you sell, individual stocks allow you to slowly pick and choose which ones you sell and when to take the hit.  These are what I like to call #successproblems


  • 5 O'Clock Shadow
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Re: Sell individual stocks?
« Reply #3 on: July 06, 2017, 07:44:48 AM »
Thanks for the advice.


  • Handlebar Stache
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Re: Sell individual stocks?
« Reply #4 on: July 06, 2017, 04:04:45 PM »
How about:
1. Hold them.
2. Make your new investments in index funds.  Buy your index funds using the specific identification method.
3. When the market tanks, you can sell specific shares of the index funds to take a loss, and sell a corresponding amount of the individual stocks. Presto, you sold some of the stocks without needing to pay capital gains!
 (Remember to sell only long term holdings, meaning over one year; short term sales pay ordinary income tax rate, not capital gains tax rate.)