Author Topic: Sell Now or After the New Year  (Read 5303 times)

Rollin

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Sell Now or After the New Year
« on: December 23, 2013, 01:33:40 PM »
This may be a simple question to some of you, but I am wondering if I should sell my AAPL stock now, gaining a very good profit - or wait until after the 1st of January.  Mainly, I am asking if there is a tax implication.  This money is invested in a traditional IRA so my guess is there would not be an affect on 2013 taxes if I sold prior to the end of the year.

BTW-reinvesting in Vangaurd!

Just not sure and want to safe (than sorry!).

Thanks all.

msilenus

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Re: Sell Now or After the New Year
« Reply #1 on: December 23, 2013, 01:48:31 PM »
If you expect to be owed a refund in March, then you don't need to worry about under-withholding in 2014.  In that case, you could sell in January and keep your tax on the transaction as a sort of interest-free loan from the government through April 2015.

If you're in the 15% tax bracket, and the gains are long-term, you might also just not have to worry about taxes in either year.  In that case, you'd be mildly better off selling this month because there's almost no chance of tax law changing on you.

Those are a couple of ways this could go.  YMMV.

KingCoin

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Re: Sell Now or After the New Year
« Reply #2 on: December 23, 2013, 02:04:16 PM »
Maybe I'm reading this wrong, but if this is in your IRA, why would you have to pay any taxes on your trading gains?

AccidentalMiser

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Re: Sell Now or After the New Year
« Reply #3 on: December 23, 2013, 02:09:26 PM »
If it's in an IRA, there's no taxable event.  I'd sell it today!

Might I suggest you dollar-cost average your re-investment. 
« Last Edit: December 23, 2013, 02:11:43 PM by Accidental Miser »

msilenus

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Re: Sell Now or After the New Year
« Reply #4 on: December 23, 2013, 02:17:35 PM »
Okay.

I'm feeling dumb for missing that.

Will

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Re: Sell Now or After the New Year
« Reply #5 on: December 23, 2013, 02:20:08 PM »

Might I suggest you dollar-cost average your re-investment.

Why?

Zee

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Re: Sell Now or After the New Year
« Reply #6 on: December 23, 2013, 03:59:02 PM »



Might I suggest you dollar-cost average your re-investment.

Why?

+1

Vanguard study on benefits of Lump Sum Investing over Dollar Cost Averaging.
https://pressroom.vanguard.com/nonindexed/7.23.2012_Dollar-cost_Averaging.pdf

SunshineGirl

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Re: Sell Now or After the New Year
« Reply #7 on: December 24, 2013, 07:39:24 AM »
If you want to feel safe, you should lock in your gains and sell today. A sell button is a sure thing.

CDP45

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Re: Sell Now or After the New Year
« Reply #8 on: December 24, 2013, 03:28:11 PM »



Might I suggest you dollar-cost average your re-investment.

Why?

+1

Vanguard study on benefits of Lump Sum Investing over Dollar Cost Averaging.
https://pressroom.vanguard.com/nonindexed/7.23.2012_Dollar-cost_Averaging.pdf



That article is referencing a 1-time lump sum award such as an inheritance windfall, not saving up money and then dollar cost averaging. The point of the article is during the time the cash is sitting, the investor loses out on the gains (opportunity cost). It would be better to DCA during the year than putting the money in cash and then investing it one time at the end of hype year.

Hotstreak

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Re: Sell Now or After the New Year
« Reply #9 on: December 24, 2013, 04:07:25 PM »



Might I suggest you dollar-cost average your re-investment.

Why?

+1

Vanguard study on benefits of Lump Sum Investing over Dollar Cost Averaging.
https://pressroom.vanguard.com/nonindexed/7.23.2012_Dollar-cost_Averaging.pdf



That article is referencing a 1-time lump sum award such as an inheritance windfall, not saving up money and then dollar cost averaging. The point of the article is during the time the cash is sitting, the investor loses out on the gains (opportunity cost). It would be better to DCA during the year than putting the money in cash and then investing it one time at the end of hype year.

The poster currently has Apple stock they are going to sell, they are not saving money up over the year to invest in lump sum.  They will receive the lump sum a few days after sale, and the question posed to the person suggesting dollar cost averaging is, are there advantages to doing that instead of just writing a check on day one?  The article from Vanguard seems to indicate it would be best to put it strait back in to the market.

Rollin

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Re: Sell Now or After the New Year
« Reply #10 on: December 25, 2013, 01:05:04 PM »
Yes it is an IRA and that shows my level of (mis) understanding that I don't need to worry about the taxes.  Now I just need to get my DW off the idea that investing in individual stocks is a good idea for us novices.  If it goes up after sale I'm gonna take a hot, if it goes down it'll be ignored :)  (half said in jest)

Thank you for the replays.  Now I need to dig into the Scottrade offerings in Vangaurd.  Not sure they have everything available.

Will

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Re: Sell Now or After the New Year
« Reply #11 on: December 25, 2013, 02:11:36 PM »
Now I need to dig into the Scottrade offerings in Vangaurd.  Not sure they have everything available.

Again I ask:  Why?  Just deal with Vanguard directly.  No reason to get a middleman involved (usually).

Rollin

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Re: Sell Now or After the New Year
« Reply #12 on: December 25, 2013, 03:55:15 PM »
Now I need to dig into the Scottrade offerings in Vangaurd.  Not sure they have everything available.

Again I ask:  Why?  Just deal with Vanguard directly.  No reason to get a middleman involved (usually).

We have it in a Scottrade account - $7 per trade.  Is there an advantage to going directly with them?

BTW - they do have all the VG funds, I just was looking in the wrong place.

Will

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Re: Sell Now or After the New Year
« Reply #13 on: December 25, 2013, 04:18:30 PM »
Now I need to dig into the Scottrade offerings in Vangaurd.  Not sure they have everything available.

Again I ask:  Why?  Just deal with Vanguard directly.  No reason to get a middleman involved (usually).

We have it in a Scottrade account - $7 per trade.  Is there an advantage to going directly with them?

BTW - they do have all the VG funds, I just was looking in the wrong place.

The advantage would be $0 per trade, saving you $7 each time.

hoppy08520

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Re: Sell Now or After the New Year
« Reply #14 on: December 25, 2013, 05:34:08 PM »
Another advantage of investing directly with Vanguard is you gain access to the lower fee Admiral share class. You might not always be able to get that at a brokerage. You might want to find out how Scotttrade handles this.

CDP45

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Re: Sell Now or After the New Year
« Reply #15 on: December 25, 2013, 05:39:38 PM »



Might I suggest you dollar-cost average your re-investment.

Why?

+1

Vanguard study on benefits of Lump Sum Investing over Dollar Cost Averaging.
https://pressroom.vanguard.com/nonindexed/7.23.2012_Dollar-cost_Averaging.pdf



That article is referencing a 1-time lump sum award such as an inheritance windfall, not saving up money and then dollar cost averaging. The point of the article is during the time the cash is sitting, the investor loses out on the gains (opportunity cost). It would be better to DCA during the year than putting the money in cash and then investing it one time at the end of hype year.

The poster currently has Apple stock they are going to sell, they are not saving money up over the year to invest in lump sum.  They will receive the lump sum a few days after sale, and the question posed to the person suggesting dollar cost averaging is, are there advantages to doing that instead of just writing a check on day one?  The article from Vanguard seems to indicate it would be best to put it strait back in to the market.

Got it, yup put it right back in according to the asset allocation of your investment plan.