Re: Investing

From: Brett Paatsch (paatschb@optusnet.com.au)
Date: Wed Jun 11 2003 - 01:50:04 MDT

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    Ramez writes:

    Sorry to jump in (and I've not read all the thread)

    > From: Phil Osborn [mailto:philosborn2001@yahoo.com]
    > > Anyway, the rub is that if I sell at the points where
    > > I might think I ought to, then I get to pay a large %
    > > of any earnings in taxes. Suggestions? Note that I
    > > am a real amateur in this area.
    >
    > Buy and hold. Or is that too old fashioned of me?

    I assume that the situation in the US is the same as in
    Australia and that you can deduct capital losses from
    capital gains.

    Say a trader has a portfolio of stocks all of which he
    expects to go up over say twelve months but not
    necessarily without bounces along the way. The trader
    might sell and buy back one stock B, thus crystallising
    a capital loss which can be used reduce his capital gain
    made on selling A. Because he buys B back
    immediately he has effectively "held" B but he keeps
    more of the profit on A.

    Brokerage of course needs to be considered.

    And I am no expert in this area either.

    Brett Paatsch



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