To sell or not to sell

[2002wranglerX]

*disclaimer* i'm not soliciting advice on a jeep forum, this is more to start discussion. I obviously wouldn't do anything without consultation with my financial advisor.


so here's the dilema. My investments are down about 25% to a tune of about $40,000.00 (ouch).

so the question is, do i just ride this out (like i did after 9/11) or do i consider selling.

The reason i'm debating selling is this. As is, if i sell, i'll be taxed 15% fed gains tax and bump me up into a higher tax bracket. so i'll be out around 40% after it's all said and done.

Now, if i wait for Obama, if the economy rebounds (and it should barring any idiotic meddling from obama) and i make my 40,000.00 back, then if i wanted to pull $ out, I'll be hit around 35% fed gains (if they do go that high). So really i'm in just slightly better shape than i am now, and it's a risk.

Now if i wait for obama, and the economy doesn't recover, then i'm dealing with that 40,000.00 loss, PLUS an additional 35% tax on my remaining investments. so i would lose around 75,000.00


The smart $ is probably still just to leave it alone, but man, these are some scary possibilities!

thanks libs!

[JeepGeneral]

Is this a long-term investment? If so, don't touch it. It will bounce back, then down, and back again within the next 30 years.

[2002wranglerX]

Is this a long-term investment? If so, don't touch it. It will bounce back, then down, and back again within the next 30 years.

It is, but I would also like to have access to it in the event of having kids, etc.

I'm getting married in a week and i had planned on pulling about 10k to put hardwood floors in my house and do some home improvements (not necessarily a losing investment).

Right now i'm just not touching it. I have friends in similar situations that have already pulled out and put their $ into CD's.

Just pisses me off that when i want to access it in a few years (should i need $ for the added expense of children, etc) that obama's going to tax the shit out of it.

Plus, i have no faith that his plan are going to LET us bounce back!

[Bird_Flu]

I am not a financial adviser but most of them will tell you if it's a long term investment to just leave it alone, especially if you're younger.

My Grandmother is in a similar position and one Aunt of mine who thinks she knows about finance because she's a teller at a bank keeps trying to pull all the money out and put it into CD's. The financial adviser did the math for her, the last time she wanted to pull this crap, which was 5 years ago, if she had my Grandmother would have lost over $100k. The market goes through corrections, always has always will but if these are truly long term investments for your retirement and you're under 45 years old I say leave them there. Because in another 10-20 years think of how much more value they will have made.

[Ronin152]

Like the other guy said it really just depends on what you think the future will be like and what kind of risk your willing to take. Historically it has been proven that you will gain in the stock market but thats the past and could not be true for the future but is a pretty good indicator of what will happem. I say leave it in things will turn around.

[Muzikman]

The problem is, this is not just a low point in the market. There is a chance that if this does correct, it's not going to be for many many many years.

The problem is there isn't really any safe place to put your money. Under your mattress maybe. Even gold isn't worth investing in right now. The interest rates on CDs are dropping because people are doing exactly what you are saying. The higher demand for CDs lowers their interest rate.

If you talk to a financial adviser I would get a second and third opinion before doing anything.

[Effjae]

Don't take it out, you'll just spend it on booze and whores.

[wozz]

The problem is there isn't really any safe place to put your money. Under your mattress maybe.

Even that isn't safe because of inflation.

[jackb1]

You have not lost anything until you sell. If you can afford to keep your fingers out of it, leave it alone.

Disclaimer: I'm talking about the money, not the previously mentioned whores. In which case, different advice may apply.

[Bill]

You have not lost anything until you sell. If you can afford to keep your fingers out of it, leave it alone.

Agreed!

Disclaimer: I'm talking about the money, not the previously mentioned whores. In which case, different advice may apply.

Hysterical!

[JeepGeneral]

I have a few separate accounts, one for long-term investments and a few for more liquid cash. I break the liquid accounts up into categories (insurance/taxes, home improvements, Jeep fund, etc).

For example, I'm purchasing a home and already have a few hundred dollars saved for improvements because I started putting money into it early on before I started looking. Once it has enough money in it, I'll redo the kitchen or put in hard wood floors. My long-term investment won't be touched until I'm old and need it.

[Bird_Flu]

I have a few separate accounts, one for long-term investments and a few for more liquid cash. I break the liquid accounts up into categories (insurance/taxes, home improvements, Jeep fund, etc).

For example, I'm purchasing a home and already have a few hundred dollars saved for improvements because I started putting money into it early on before I started looking. Once it has enough money in it, I'll redo the kitchen or put in hard wood floors. My long-term investment won't be touched until I'm old and need it.

Tom, that's a very smart way to save.

[2002wranglerX]

I have a few separate accounts, one for long-term investments and a few for more liquid cash. I break the liquid accounts up into categories (insurance/taxes, home improvements, Jeep fund, etc).

For example, I'm purchasing a home and already have a few hundred dollars saved for improvements because I started putting money into it early on before I started looking. Once it has enough money in it, I'll redo the kitchen or put in hard wood floors. My long-term investment won't be touched until I'm old and need it.

I've got a few too. Plus i max out my Roth IRA to try to avoid some of the tax penalties.

When i bought my place i paid off the JK and put 60,000 down on the house (which i purchased at 40,000 below current market value) to keep the payments low enough that it didn't destroy me every month (also paid the extra percentage point to get the fixed 30 year).

So now most of my stuff is long term annuities and "safe" stuff. I do have a small account that is more aggressively invested. But that's only about 5% of my total worth.

I was just hoping to be able to pull $ to get ready to flip this place in a year or two.

[Ronin152]

If your thinking about flipping that house and selling it you might as well forget about it with the market now.

[jackb1]

I did one this summer, 82 days between closings. You just need a great deal to start with or you're right that now is a bad time.

[JeepGeneral]

I've got a few too. Plus i max out my Roth IRA to try to avoid some of the tax penalties.

When i bought my place i paid off the JK and put 60,000 down on the house (which i purchased at 40,000 below current market value) to keep the payments low enough that it didn't destroy me every month (also paid the extra percentage point to get the fixed 30 year).

So now most of my stuff is long term annuities and "safe" stuff. I do have a small account that is more aggressively invested. But that's only about 5% of my total worth.

I was just hoping to be able to pull $ to get ready to flip this place in a year or two.

Why spend the extra money to buy down the 30 yr rate if you plan to flip it after only a few years? I also wouldn't put $10K in floors in a house you intend to flip, especially in this market.

Back to the topic at hand, you sound like your long-term investments are in check with your Roth IRA and "agressive investments". Take the rest of your cash you plan to use in the short term and throw it something safe. If it took a 40% loss, thats not what I consider safe. I use a savings account I have through work which guarantees 5% or better. Most years it has average 8% or above but not this year. As long as the percentage is good enough to beat inflation, you're OK.