When can we sell stocks

Tax reasons

If you have losses in some of your investments, you may want to consider selling them to take advantage of a strategy known as tax-loss harvesting. This approach allows you to save on your tax bill by offsetting income and capital gains with your losses.

The IRS allows you to claim up to $3,000 in losses each year, which could save you a good chunk in taxes. If your losses are beyond the $3,000 limit, you can carry over the additional losses to offset gains in future tax years. This strategy only makes sense in taxable accounts, not in retirement accounts like 401(k)s or IRAs.

But try not to let tax considerations drive your investment decisions. Trading in and out of strong companies for tax purposes or other reasons can often leave you worse off than if you’d just held the stock for the long term.

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