Congratulations on the great returns…I hold a much more diversified portfolio (about 150 positions). My returns as of Friday are:
Taxable
- me 9.3%
- Fiona 9.9%
- Anna 11.1%
SEP/IRA
- Funds 5.0%
- Brokerage 6.2%
I’m happy with my returns, given that the S&P 500 is only up about 0.1%. Only a couple of days ago my Taxable returns were in the 14% - 15% range, so an arbitrary snapshot is a bit of a crapshoot. I appreciate that you share your monthly returns, and will continue to contribute mine.
John
Hi John, Yes, earlier in the week I was at a max of up 20.5%. I have tried to give end of month results though, even if a bit of a snapshot.
Question: Why are your taxable results so much better than your IRA’s? Is it just accident, or do you invest differently?
Comment: Without knowing what proportions are in each account, it’s hard to tell what your overall results are. I think of mine as a single bundle, and report them that way. It might (or might not) benefit you to do the same.
Best,
Saul
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can you explain how you decide what % to assign to a stock in your portfolio? is it market cap, growth rate?
Hi Usha, Please, please, please read the FAQ/Knowledgebase where this is all spelled out. I’m not trying to be difficult, it’s just that I can’t repeat everything every time someone new joins the board. Very briefly, I never start with an oversize position, a stock has to grow into it. I usually start small and add as I get confidence. A stock like INBK I’d never let get too big because it’s not liquid.
why did you sell POL? ( just point me to the post; i must have missed it)
Go to post #6902 entitled “Here’s what I did during the sell-off.” I wrote
I have said before when one stock is down in a rising market I’m suspicious, but when all the stocks are down for no reason, I try to add to my best if they have fallen a lot. I had to get cash first so I sold off my positions in ELLI and POL, which were more stable and hadn’t fallen hardly at all.
why Amba now?
I had it before and sold out, and decided it was probably a mistake.
Saul
For FAQ’s and Knowledgebase
please go to Post #6412
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Question: Why are your taxable results so much better than your IRA’s? Is it just accident, or do you invest differently?
I invest differently. My taxable account is more concentrated, plus I am able to use margin buying power for more options strategies.
Comment: Without knowing what proportions are in each account, it’s hard to tell what your overall results are. I think of mine as a single bundle, and report them that way. It might (or might not) benefit you to do the same.
The weightings of the components are:
me taxable 22.3%
SEP Funds 10.4%
SEP Broker 67.4%
so my total returns are heavily weighted towards 6.2%.
My taxable account is at Interactive Brokers, whereas my SEP funds are at Vanguard, and the taxable account has cash flows in and out, while the SEP/IRA doesn’t. Consolidating them is a bit of a chore, so it’s easier to report them separately.
John
Hi Saul,
What about a guy like me who got started late in his life and inherited a few bucks and then sold off some property to get a pretty nice nest egg. All that to say I didn’t build much value in an IRA so all of my money is in a taxable account. I understand the art of trimming certain holdings whether profitable or not but when that’s all you do you can build a pretty hefty tax bill at the end of a year. I have quite a bit in DIS with a 102% gain. Do I sell off some of that and bite the bullet at the end of the year? I guess I’m just to scared to pay Uncle Sam too much. Any advice for me?
Gayle
Not Saul but
You will probably wind up paying Uncle Sam sooner or later. There are few free lunches in this world, perhaps long term capital gains being one of the few exceptions. We wouldn’t have that one if it didn’t suit the elite so well.
A LT capital gain is good, a SRT capital gain is good but less good. Either beats hanging on to stock until it turns to a loss. The long term survivability of most corporations probably decreases every year due to the exponential growth of technology and the innovation and disruption that goes along with it.
Even the best companies are like good wine, a long life and improve with age. Until they peak and start going downhill. I saw pictures of a wine cellar in France, they had wine dating back to the 1870’s or so, covered by an inch of dust. Unsold, probably because they were undrinkable.
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I recently dealt with this myself, as some holdings in a taxable account had grown to larger than I was comfortable with.
If it is a long term gain, you will pay the same tax rate whether you sell it now or later (unless they change the tax laws of course).
If it is a short term gain that is close to LT, then possibly wait unless you are losing sleep over the size of the position.
In taxable accounts I do try to minimize the transactions in my long term holdings, but you can always use specific share accounting for your basis if you need to trim positions around the edges.
It is never good to save on taxes by losing your gains or your sleep… far better to be very profitable, sleep well and deal with a larger tax bill. 
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Hi Saul,
What about a guy like me who got started late in his life and inherited a few bucks and then sold off some property to get a pretty nice nest egg. All that to say I didn’t build much value in an IRA so all of my money is in a taxable account. I understand the art of trimming certain holdings whether profitable or not but when that’s all you do you can build a pretty hefty tax bill at the end of a year. I have quite a bit in DIS with a 102% gain. Do I sell off some of that and bite the bullet at the end of the year? I guess I’m just to scared to pay Uncle Sam too much. Any advice for me?
Gayle, unfortunately I can’t give individual advice like that because I am not a licensed investment advisor, and I don’t really know anything about your circumstances, and I don’t know anything about DIS, for instance. However, in general terms, I’d suggest you don’t let any stock position get so big where you worry about it at night, and you can minimize taxes if you sell stocks that are long term (held more than a year).
Hope this helps a little, anyway.
Saul
Thanks all for your response’s. In the past I always had enough losing sales to offset most of my profitable one’s, but now there aren’t that many loser’s lately. Thanks to Saul and the rest of you. I guess I was to worrisome about LT taxes. We’ll see what happens at the end of the year. If things keep going like they are now I won’t mind paying some taxes.
Thanks again.
Gayle
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If your taxable income fluctuates there may be a difference for long term capital gains rates of 15% or 20%. Also, if your AGI exceeds a certain threshold there is a 3.8% surtax for net investment income. Of course, figures are different depending on whether you file jointly or as a single.
Htownrich
P.S. I have been told this by my accountant when questioning him about taxes. I may have it wrong. I am not an accountant and this is not accounting advice. Please consult your accountant if this could be an issue.
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