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To invest forever is not reasonable. If you never take profit then you may as well throw it in the dump. But when do you take money off the table? I understand if you are 25yo you would want to let an IRA run and make money but if your a few years out from SS and as now we are at the top of the market when do you pull money off the table?
When I have hit my pre-trade determined profit exit within my trade plan. I have one for both short and long term trades, as well as investments.
Your profit exit based on if you're a few years out from taking SS, will be based on your retirement plan, risk tolerance, overall portfolio allocation.
When I have hit my pre-trade determined profit exit within my trade plan. I have one for both short and long term trades, as well as investments.
Your profit exit based on if you're a few years out from taking SS, will be based on your retirement plan, risk tolerance, overall portfolio allocation.
And who says were at a top?
By at top I mean all time high. We can set new ATH but we are there right now. I am at 50 percent Profit. My plan is to sell all my stocks and then sell puts. I can make money and wait to see if the market corrects. So its no fully off the table.
By at top I mean all time high. We can set new ATH but we are there right now. I am at 50 percent Profit. My plan is to sell all my stocks and then sell puts. I can make money and wait to see if the market corrects. So its no fully off the table.
Ok, so a few things here. Great job at 50% profit, for sure take some, and either a) re-allocate or b) expand your portfolio.
Why would you sell all? And then sell puts?! You understand that you're taking profit and then buying back in at a top if it hits those strikes.
Depending on your tax bracket, and MAGI, why don't you tax loss harvest any that you have, sell LIFO (especially if you're near a new tax bracket), make sure your retirement accounts are funded, sell covered calls on the positions to continue to enjoy upward possible ATH's, as well as continue to generate additional income over your positions. If they hit your strikes, then you get assigned and have met your profit exits (covered call strikes). Also selling the covered calls, reduces cost basis in some of the shares which you can assign the tax lot to be "assigned" or called away thus reducing your tax implications.
To invest forever is not reasonable. If you never take profit then you may as well throw it in the dump. But when do you take money off the table? I understand if you are 25yo you would want to let an IRA run and make money but if your a few years out from SS and as now we are at the top of the market when do you pull money off the table?
At one time many people reached retirement and were likely to only live a few years. Now we reach retirement and want to have our savings cover expenses for another 30 years or so. That is still long term investing and a substantial stock allocation makes sense. I am over 70 and running close to a 70% allocation. I will probably start to gradually cut back.
Why do you think it is the top of the market? People thought the same way 5 years ago and expected a drop. Even big drops typically recover quickly. Most of us who went through the Great Recession in 2008 recovered our losses in a couple of years.
keep in mind that drops in nominal terms recover quickly . but drops in real return which is what really counts have taken longer than a decade a few times .
when do you take profits ? when you met your goal and purpose .
my goal was retirement money . it grew for 30 years just compounding higher and higher through it all .
now i live off it , but i am still invested . just not as heavy.
investing in equities should be long term investing , spanning decades . if it is short term investing than it is more speculating than investing because now you have time constraints .
When you try to time the market you will lose most of the time. A few years from SS still means a life expectancy of 20-30 years and that means equities.
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