Saturday, November 15, 2014

Time to Sell Those Losers


End of year is coming and it is time to clear up your portfolio and sell any stocks, mutual funds or ETFs that have a capital loss and are not needed for your asset allocation.  The capital loss reduces your taxes and you can buy back the stock after 30 days if you wish to avoid triggering a "wash sale", which would nullify your tax advantage.

In my case, I have an inflation protected securities mutual fund with a capital loss.  Inflation is not likely to spring up in the next 30 days so I can sell it now, buy another different bond fund, get the loss, and buy it back at least 30 days later if necessary.

Photo Credit: Flickr

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