Taxes & stock losses?

[ripvanwinkle]

With tax time coming soon I have to make some decisions. Whether to sell some stocks at a loss which by the way exceeds the IRS limit by a lot, or to hope and prey that the market rebounds next year so I'm back even.

I'm now doubting my old school buy and hold strategy which, in better years, served me very well but now I just don't know. I go for long term gains. I don't want to hold short term and pay the higher taxes on short term holding.

Is buy and hold applicable any more?? How do investors with large portfolios get around the IRS limit?

[Deleted]

How far are you from retirement and how long have you been investing?

The reason I ask is that the longer your time horizon to retirement, the less you should worry about year-to-year fluctuations. Bear markets are also scarier if you haven't been through one before.

I have a very complicated portfolio with a lot of holdings- many would say too many. My tactic is to periodically weed out under-performers as I go along. The good stuff will come back. Before you start dumping everything that's in a loss position, look at the prospects- individual company prospects, what industry they're in, what the market likes/doesn't like right now. I listen to Jim Cramer a lot and in his opinion, anything losing money is not a good investment right now. (I do corroborate with other sources what he says about individual companies- he's absolutely fatuous with CEOs when he interviews them and a year later may turn thumbs down on the company. Examples: Theranos, whose CEO went to jail, Disney, where they just pitched out the CEO and the old one is back, Generac).

You may want to take some profit off the table on good stocks that have gains. Sometimes I sell 50%. That will offset some losses. I agree that it stinks that if you have a gain it's taxed all now but if you have an overall loss, they limit what yo can deduct and you have to carry the rest forward.

And don't forget the tactic of tax-loss harvesting and buying something similar (but not so similar it's considered a wash sale). I sold all my holdings in a bond fund, realizing a long-term loss, and put the proceeds in a separately-managed municipal bond account where they buy and sell individual bonds in my name, with very low turnover (they don't a bond unless they think it's got a bad future).

I totally agree on not having short-term gains and losses and frequent trading.  I'm also Buy and Hold and occasionally donate appreciated stocks to charity or my donor-advised fund and escape the tax on the gains entirely.

[ripvanwinkle]

I'm in retirement age bracket now but still working full time. In all the market downturns since '87 I just sucked it up and keep the losses and waited for the rebound. It came back and erased the losses. Mostly. Some went bankrupt. I don't have any bonds or the like. I just have stocks in national brands and companies who have been around forever. Companies that pay good dividends.

Its just hard for me to sell them. I'm my own worst enemy. 

[Regis]

I typically take a very simplistic approach to this.  Are they historically worse than average in their sectors or is this a one-off year?  If it's historic, I'd sell.  If not, in my opinion, you're fine to keep and wait for the rebound.

[Artemis Windsong]

I just mulled over my selling one stock that is floundering. I know the day traders are making a bundle on it. With the holidays coming up, I doubt it will even come up a little.