my over all basis value is $687,609.55 across three accounts (Roth, traditional, regular trading account) with an unrealized value of 146,957.94. These are in retirement accounts. Should I sell and re-buy to lock in the profits? I think there may be some type of lock or something for doing that but it let me do it and then locked my account for ? a month?? idk… but if I can re-buy I don’t care because I don’t trade that often (quarterly rebalance). overall I’m getting a %28 return using the epic service aggressive portfolio., Thanks in advance.
edit: I don’t incur any trading costs.
In a Roth or IRA, I don’t see any advantage to selling to lock in profits and rebuy. Best reason to sell is if you think stock has reached its potential and you want to buy something else.
Much depends on the stocks you own. Some can be volatile. Other can be steady growers. If you have a steady grower and suddenly it takes a dip, some would be inclined to sell and take at least some profits.
The best reason to sell is if you have something else in mind with better prospects.
Roth and IRA let you sell without worrying about taxes. In a taxable account you usually want to wait for long term gains if you can. Of course losers are easy to sell but in a taxable account you do have to worry about wash sale rule. That keeps you from rebuying for 30 days or you can’t deduct your losses.
Many of us use the moving averages to spot time to sell. Or at least consider if you should keep it. 50 and 200 day moving averages are most often used but there are others. And many watch the news to see if new developments (like tariffs) will impact future earnings.
In a tax-advantaged retirement account, there’s no reason to sell and re-buy the same investment. In a tax-advantaged retirement account you are either taxed on every dollar that comes out (Traditional) or not taxed at all (Roth - assuming you follow the rules for qualified withdrawals), so capital gains within the account are irrelevant.
In a taxable brokerage account, if you are trying to take full advantage of a lower capital gains tax bracket, like 0% or 15%, then you may want to sell and re-buy the same investment that you sold. Just keep in mind that you will also be re-setting your holding date, so you will have to hold again for a full year plus a day to be taxed at long term capital gains rates.
If your investments are in mutual funds, many mutual funds have trading rules to discourage selling and re-buying the same fund. You should check the prospectus for the mutual fund. If the investments are individual stocks or ETFs, you may have violated a rule that your broker has in place. You need to be aware of the rules for both your mutual funds and your broker because there may be progressive punishments, up to and including closing your account.
AJ
2 Likes
Thank you for the wise advice.