The problem I have is pulling my money out immediately reduces it by 15-30% because of taxes. So for every $1000 in stocks gains, I will only have $850 to invest in the future. So taking money out is a guaranteed reduction of your investment portfolio.
I Sold My Entire Investment Portfolio One Hour Ago
11–18 of 18 posts
Re: I Sold My Entire Investment Portfolio One Hour Ago
#12Largest analysis mistake here is looking at past events CDOs as mentioned and believing the exact same thing will happen again. The outcome won’t be the same, because if it were to be then the fact that we know the outcome would be the same changes everyone’s investment decisions. Sitting on cash is almost universally a bad idea in my opinion (more than a few months of emergency or if you are saving for something). I…
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Re: I Sold My Entire Investment Portfolio One Hour Ago
#13A 100% cash portfolio is highly exposed to inflation.
Re: I Sold My Entire Investment Portfolio One Hour Ago
#14The author makes some good points, but glosses over USD valuations as a risk factor.
Yeap. You’re never « exiting » all the markets. You’re moving from one market to another. Betting on the dollar vs company’s share is one strategy, but i wouldn’t say it’s totally risk-free either in the current environment.
It cannot be described as risk free. It is 100% guaranteed to lose money to inflation at the bare minimum.
Re: I Sold My Entire Investment Portfolio One Hour Ago
#15The problem I have is pulling my money out immediately reduces it by 15-30% because of taxes. So for every $1000 in stocks gains, I will only have $850 to invest in the future. So taking money out is a guaranteed reduction of your investment portfolio.
That portion is a basically a sunk cost. You don't have that money you're just holding onto it for the taxman. Assuming any future gains will be taxed at the same rate, in effect you are not earning anything more off of it by holding it as the proportion of tax will be the same. The only way it would be different is if you expect the tax law to change in the future in your favour.
Re: I Sold My Entire Investment Portfolio One Hour Ago
#16The problem I have is pulling my money out immediately reduces it by 15-30% because of taxes. So for every $1000 in stocks gains, I will only have $850 to invest in the future. So taking money out is a guaranteed reduction of your investment portfolio.
Wasn't clear from the article whether he was talking about a tax advantaged account or not. In a tax advantaged account his strategy would have more advantage.
Re: I Sold My Entire Investment Portfolio One Hour Ago
#17The problem I have is pulling my money out immediately reduces it by 15-30% because of taxes. So for every $1000 in stocks gains, I will only have $850 to invest in the future. So taking money out is a guaranteed reduction of your investment portfolio.
That portion is a basically a sunk cost. You don't have that money you're just holding onto it for the taxman. Assuming any future gains will be taxed at the same rate, in effect you are not earning anything more off of it by holding it as the proportion of tax will be the same. The only way it would be different is if you expect the tax law to change in the future in your favour.
Your tax bracket could change also if you lose your job or retire, or suffer other losses.
Re: I Sold My Entire Investment Portfolio One Hour Ago
#18But did he consider that Jerome Powell has a money printer that goes brrrrr?
Good one, very insightful. Inflation should definitely be considered as well.