Stock Market Today

[rsm]

Speaking of taxes...

 

[psychodave]

Some things would be at a loss. Others not so much. If I fully liquidated my portfolio today, I would have a very hefty tax bill.

Sounds like you need to do some tax avoidance stuff. Take losses where possible to realize or offset with gains.

 

[midnightlaundry]

 

[FourT6and2]

Sounds like you need to do some tax avoidance stuff. Take losses where possible to realize or offset with gains.

I've done a bit of tax-loss harvesting when appropriate. But the point of an investment portfolio is to build wealth, not hope for losses. I've had my portfolio for decades and have rarely sold anything, so yeah... I'm bleeding unrealized gains at the moment, not necessarily in the red. I'm just fed up with the stock market over the last few years and right now a simple 5% savings account or CD would actually be less stressful. I could probably live off the interest alone for the rest of my life, rather than seeing my portfolio swing large sums every week. But in order to do that, I'd have to liquidate and that means realizing capital gains. And that means taxes.

 

[rsm]

I've done a bit of tax-loss harvesting when appropriate. But the point of an investment portfolio is to build wealth, not hope for losses. I've had my portfolio for decades and have rarely sold anything, so yeah... I'm bleeding unrealized gains at the moment, not necessarily in the red. I'm just fed up with the stock market over the last few years and right now a simple 5% savings account or CD would actually be less stressful. I could probably live off the interest alone for the rest of my life, rather than seeing my portfolio swing large sums every week. But in order to do that, I'd have to liquidate and that means realizing capital gains. And that means taxes.

Interest rates may be coming down in the not too distant future; depending on who you believe, can be as early as next month, by the end of the year, etc.

 

[PDC]

I've done a bit of tax-loss harvesting when appropriate. But the point of an investment portfolio is to build wealth, not hope for losses. I've had my portfolio for decades and have rarely sold anything, so yeah... I'm bleeding unrealized gains at the moment, not necessarily in the red. I'm just fed up with the stock market over the last few years and right now a simple 5% savings account or CD would actually be less stressful. I could probably live off the interest alone for the rest of my life, rather than seeing my portfolio swing large sums every week. But in order to do that, I'd have to liquidate and that means realizing capital gains. And that means taxes.

I think we are in the same boat - well, maybe not really. Sounds like you (wisely) started loading the hull of your boat when I was busy buying fancy cars, guitars …. Anyway - what you said about ‘paper’ losses resonates with me. Just this last year, my wife’s and my collective investments were finally worth enough to make a difference. And like you, we are not relying on that money today (still running the practice) and want to wait to pull the money out a little at a time after I have fully retired. For the most part, my practice does just well enough that the last few dollars I pay myself at the end of the year just begin to spill over into a bracket that I’d rather not start at when accessing my savings / investments. We will begin the transition from more volatile ‘stocks’ to more steady financial placeholders soon (God willing!). Everyone says this - now including me - start when you’re young. Doubling down on contributions when you are older is better than not, but not as good as starting earlier and leveraging time.

 

[Bad Brain]

a simple 5% savings account

Won’t stay 5% for ever, and even at 5% it probably isn’t keeping up with inflation these days, or at best is breaking even. ..,And regarding capital gains, the tax rate could increase ?‍

 

[Geo]

Gold has kept up with inflation, if you bought in November 2019, you paid $1459 per ounce.

 

[Bad Brain]

I have a theory they will raise cap gains, not only to increase revenues, but to keep people invested in the stock market.

 

[311boogieman]

I've done a bit of tax-loss harvesting when appropriate. But the point of an investment portfolio is to build wealth, not hope for losses. I've had my portfolio for decades and have rarely sold anything, so yeah... I'm bleeding unrealized gains at the moment, not necessarily in the red. I'm just fed up with the stock market over the last few years and right now a simple 5% savings account or CD would actually be less stressful. I could probably live off the interest alone for the rest of my life, rather than seeing my portfolio swing large sums every week. But in order to do that, I'd have to liquidate and that means realizing capital gains. And that means taxes.

Also consider insurance annuities, like Brighthouse or Prudential instead of settling on 5%. This is not life insurance. It is letting insurance companies borrow your money but they give you a guaranteed return. The uncapped ones were giving me anywhere from 8% to 13% last year and the fee was nominal. As I was saying earlier, you get the upside benefit but with downslide protection and most are tax deferred. Approximately 1/3 of my nest egg is set up this way.

Just another option

And yeah, I'm not smart enough to play the stock market - I have no desire to do that. I let my financial guy do most of my decision making.

But like Lisa said, don't take financial advice from guitar players on the internet

 

[PDC]

Without taking advice from forum members, it does sound like several members of this forum have received pretty sound advice from others along the way!

 

[MadAsAHatter]

Without taking advice from forum members, it does sound like several members of this forum have received pretty sound advice from others along the way!

Guitar forum members giving sound advice.... was that pun intended?

 

[FourT6and2]

Won’t stay 5% for ever, and even at 5% it probably isn’t keeping up with inflation these days, or at best is breaking even. ..,And regarding capital gains, the tax rate could increase ?‍

Correct, high yield savings accounts won't stay high yield forever. That's why CDs, with locked rates exist. But even though don't last forever and they aren't liquid.

Here's the thing with the stock market. Over the last few years, there have been times when my portfolio has been at an all-time high. But that lasts for about a month. Then something happens in the world/market that causes the market to pull back. If I look at YTD or 1-year or 5-year performance, it's been pretty flat. So what's the point. The only people getting rich in the market are the companies and managers who run index funds because you're paying them to do so. Meanwhile, the funds they manage aren't making money for investors. So I'm like damn.... I could literally put assets into aa savings account and do better than the stock market and actually have tangible, liquid gains every year that would equal most full-time job salaries.

 

[FourT6and2]

Also consider insurance annuities, like Brighthouse or Prudential instead of settling on 5%. This is not life insurance. It is letting insurance companies borrow your money but they give you a guaranteed return. The uncapped ones were giving me anywhere from 8% to 13% last year and the fee was nominal. As I was saying earlier, you get the upside benefit but with downslide protection and most are tax deferred. Approximately 1/3 of my nest egg is set up this way.

Just another option

And yeah, I'm not smart enough to play the stock market - I have no desire to do that. I let my financial guy do most of my decision making.

But like Lisa said, don't take financial advice from guitar players on the internet

Interesting. I'll look into it. If something like this pays anywhere close to 13%, that's pretty amazing. Seems too good to be true.

 

[rsm]

I have a theory they will raise cap gains, not only to increase revenues, but to keep people invested in the stock market.

they (demoncrats) want to tax unrealized gains, but no tax write off for unrealized losses....for the "super rich" which means it will hit many of us sooner or later.

 

[rsm]

And yeah, I'm not smart enough to play the stock market - I have no desire to do that. I let my financial guy do most of my decision making.

I learned my lesson not to trust "financial guys" early in my career. Luckily I was able to minimize the impact, and got out fast.

This was pre-Internet; I went and looked at books on finance and investing, took a few finance night classes at a local college...and developed my approach which I refined over time; learned more hard lessons during the dotcom implosion, and managed to meet the requirements to be an accredited investor in my 30s - on my own (and which I'm proud of given where I started from economically).

I don't give financial advice here, mostly I share key numbers I track and my personal experiences; and my goals.

Up to mid-July 2024 I was on track to retire in 1-2 years, now it's back to 2-3 years, subject to change as the market changes. I have a target minimal base number + a buffer = my retirement "magic number" where I feel comfortable to retire. Converting some of my investments from growth to value / income generation - I want at least 50% of my retirement living expenses to come from dividend income; this transition will take a few years now instead of 1-2.

One of my key numbers I track is my "change in market value" and averages . numbers over and across different time periods. Let's say my average monthly and annual change in market value over the last 10 years is $X and Y%. That tells me what increase/decrease I have, that I can access.

From that annual average change in market value number, I want to take up to 3% withdrawal per year, with at least 50% of the value coming from dividend income. The remaining 97% will be reinvested. In retirement, I want to stay in or below the 24% tax bracket while I adjust / plan for future RMDs with a goal to minimize my current and future taxes.

Good luck!

 

[311boogieman]

Interesting. I'll look into it. If something like this pays anywhere close to 13%, that's pretty amazing. Seems too good to be true.

Probably not for everyone. There are lots of flavors depending on length of time and risk avoidance, amongst other things. For example, if you wanted a 10% downslide protection and shorter period of time - your return would be lower. Also, as you can imagine, small cap, or fixed income and or international plan options are not as attractive (generally) as larger indexed/variable/domestic type plans. This is a good high level easy to scan overview.

https://www.brighthousefinancial.co...ce-reports/universal-select-annuity-me180.pdf

PS: I am a semi-retired IT Consultant and have very little direct, personal experience in finances and investments like @rsm or @PLX or @NowYou'rePlayingWithPower, etc.

YMMV

 

[Geo]

Correct, high yield savings accounts won't stay high yield forever. That's why CDs, with locked rates exist. But even though don't last forever and they aren't liquid.

After watching the meeting of the heads of the FDIC sit around a table and actually laugh at the fact that people still trust the banks, I will no longer engage in CD's.

The FDIC doesn't have enough money to insure 1% of the banks in this country, that's why they wrote the "bail in"clause for banks.

 

[NowYou'rePlayingWithPower]

All about those plastic bricks. I would gather that even after the apocalypse people will trade fresh water for them.

https://www.brickeconomy.com/analysis-themes