05-10-2014, 12:38 PM
By selling a stock that has gone up in price you end up with a gain that can’t be taken away if the market drops.
But what do you do with those gains? If you re-invest the money are you not subject to the same possible loss if the market drops? The only way to lock in profits is to sell, pay the commission and taxes then keep the balance. The problem is you have now lost the income and potential future income the investment generates.
By selling and re-investing in a new stock you’ve occurred 2 commissions, will have to pay capital gains tax (in non-registered accounts) and must find a new stock(s) with as good or better income generating potential.
I prefer to hang on to my winners and let them continue generating higher and higher income.
But what do you do with those gains? If you re-invest the money are you not subject to the same possible loss if the market drops? The only way to lock in profits is to sell, pay the commission and taxes then keep the balance. The problem is you have now lost the income and potential future income the investment generates.
By selling and re-investing in a new stock you’ve occurred 2 commissions, will have to pay capital gains tax (in non-registered accounts) and must find a new stock(s) with as good or better income generating potential.
I prefer to hang on to my winners and let them continue generating higher and higher income.