First big sell off, what to consider?

Microsoft XCkk42
Sep 19, 2017 21 Comments

I contacted fidelity about a question, a rep responded with an email asking when I good time to talk would be, I told the rep, never heard from said rep again. So who else better to turn to than the tried and true Blind community, ha.

I went to make my first, what I'd consider "big" stock sell off the other day. About 60k. Before confirming the order I was prompted with a message I hadn't seen before making sure I've assigned my "tax lots" the way I'd like them. This was the first I'd heard of assigning tax lots, got me wondering what other considerations I'm unaware of that I should be heeding for this kind of order.

I have enough money working for me in the market, skimming some off the top to put in a high yield or something, some "opportunistic" funds.

I'm obviously aware of the tax hit on the gains, are there any other surprises waiting to pounce on a novice investor when cashing out worth knowing?

Thanks Fideli...er, Blind

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TOP 21 Comments
  • VMware tTCM60
    It's simple. Don't sell.
    Sep 19, 2017 10
    • Microsoft XCkk42
      OP
      The 60k represents less than 20% of my portfolio. Are you telling me diversification in my youth is a waste? I think I'll manage...

      As I said I am novice, open to hearing other strategies. But don't make it sound like I'm "cashing out". Have my bases covered.
      Sep 19, 2017
    • VMware tTCM60
      Yes diversification in your youth when you have a high paying job as an swe is total waste. Go all in on sp500.

      When 20 percent of your net worth is $600k then maybe you can talk about diversification.

      You are leaving money on the table and are a fool.
      Sep 19, 2017
    • Microsoft fabH68
      Any key who said index funds weren’t stocks ? I was referring to getting rid of my MSFT stock
      Sep 19, 2017
    • Microsoft XCkk42
      OP
      Lol. I appreciate your fervent concern, but I guess I'll be the "fool" avoiding strategies that are fundamentally based on the term "all in".

      Sep 20, 2017
    • VMware tTCM60
      Ok boy.
      Sep 20, 2017
  • Gen!x / Eng
    ixptl12

    Gen!x Eng

    PRE
    startups, JPMorgan Chase
    BIO
    ¯\_(ツ)_/¯
    ixptl12more
    These advises are horrible

    Selling stock to rebalance as financial circumstances change is a valid financial strategy.

    Op, tax lot just allows you to decide what lots to sell. For most people FIFO is good. For some of us who over-strategize this crap we may choose alternate. I might LIFO a tax lot to diminish my return as long as it’s still LTCG viable.

    There are no other land mines beyond short term vs long term capital gains.
    Sep 19, 2017 0
  • Intuit kzinti
    You're already positioned to take advantage of a down turn just by dollar cost averaging. Only pull money out to chase higher yield, but don't do it without a plan.
    Sep 19, 2017 0
  • Microsoft ThinkSc@l3
    Did you select the lots you wanted to sell? Are you only selling stock lots you've held long term or short term lots as well?
    Sep 19, 2017 3
    • Microsoft XCkk42
      OP
      I tried to select/bundle up the shares with lowest gains. (Which is the first time I had done that). Is that all the "tax lot" prompt was alerting me of? So I likely have considered it and just not privy to the nomenclature.
      Sep 19, 2017
    • Microsoft ThinkSc@l3
      You need to look at lot classification. Long term vs short term. Should be very easy to see on Fidelity.
      Sep 19, 2017
    • Microsoft XCkk42
      OP
      Oh ok I'll look for that, thanks for the insight.
      Sep 19, 2017
  • Microsoft fabH68
    Fidelity automatically sells your oldest lots first I think to make sure you get long term capital gains if possible
    Sep 19, 2017 2
    • VMware tTCM60
      Yeah if you must sell sell the lots with the lowest long term capital gain.

      Selling the oldest will destroy your wealth.
      Sep 19, 2017
    • Microsoft fabH68
      I'm referring to long term capital gains vs short term capital gains which are taxed at different rates.
      Sep 19, 2017