Investment BS Thread - Stocks/Futures/Mutual Funds/Bonds/Commodities/Options/ETFs/401ks/Etc

Both or neither is better depending on the outcome

 

Are you talking about selling at a loss and re-entering the same security?

 

Yes

 

No. lol

Either hold the loss long term if you feel it will recover in sufficient time or sell the loss and invest that capitol in another stock. If you sell a loss and re-enter the same security within 30 days t's a wash sale. You'll get no capitol loss on it at the end of the year.

 

I did not know, thank you

 

I gladly doubled down on COP and O. And thank the heavens for another buying opportunity.

 

But your basis will average down if it worked out right where you bought in lower, and you'll make money.
I feel like people put too much weight on tax avoidance. I'm all for minimizing taxes and tax strategies that make sense, but I'll never understand forgoing a gain to avoid paying taxes on it.

If I offered you $1000, but you would have to pay $200 tax on it, would you turn it down to avoid the $200 tax? If so, you're bad at math because you just gave up $800 net.

 

What's the point of selling a security at a loss to re-enter the same security? If your long you just buy more to lower your cost basis and hold. There's no point in ever doing a wash sale.

If I sold $1000 of stock that I lost 200 dollars on then bought that same stock right back all I've done is locked in a loss. That $1000 will either make or loose the same amount whether I left it alone or sold and re-entered.

 

Buy low(er), Sell high(er).

If you sold $1000 of stock that you lost 200 dollars on then bought that same stock right back at a lower price all you've done is make money.

 

The only reason is if you need to cash out the funds to have money to buy the stock lower. If you own 100 shares at $1, sell at .80, yiu could buy back in at .60, and get more than your original 100 shares.

 

Assuming it does go lower.

It could also change directions and go higher.

 

It may be worth looking at EPR. They were obviously one of the hardest hit by this virus, but they just declared that they're keeping their dividend (for now)! The ex-dividend date is coming up, so there's time to get in for about a 20% yield.

 

Show me the math. Profit or loss is a percentage of capitol. It has nothing to do with how many shares you own. Please show me some math to back up that statement.

See above. It doesn't matter how many shares you own. It only matters how much you have invested and how much the security moves up or down. All percentage.

 

Well of course it could

This whole game is predicated on guessing correctly.

The original question as I understood it, was whether it would be better to hold through a loss, buy more (average down), or sell and re-enter lower.

 

I should have added "when it goes back up" to the end of my statement.

If my basis in stock XYZ is $1 and it goes up to $2, I've doubled my money. If my basis is $.50 and it goes up to $2, I've quadrupled my money.
It's not calculus....

 

Im saying, if you had 100 shares, at $1 a share, you need it to go above $1. So if you sell and buy and acquire 130 shares at .60 a share, if it gets back to the $1 a share, you are ahead. If it doesn’t, your 100 shares at $1 weren’t going to make money anyway

and in my scenario, where you sell at loss for .80, buy at .60, it doesn’t need to get to the original $1 a share to make you money

 

This is killing me

Of course, if you sell and buy at the same price, you've gained and lost nothing.
Your "basis" is the cost of your shares (what you paid), whether that's a simple single transaction or an average of several.
If you sell for higher than your basis, congratulations! You've made money.

If this concept is too complicated, you might be better off just turning your money over to a broker and forgetting about it.

 

I like it. It did get obliterated. Surprised they kept dividend. I wouldn’t expect it to stick around.

 

If you had scripted the absolute worst thing that could happen to EPR, it is this. However, I have read that they have enough cash on hand to get through for a while (while maintaining the dividend). If this goes on too long, they're done for sure.

 

It's not complicated at all. It's still the sum total of what you have invested and what percentage profit that money returns. If you invest 1000 in 1 stock worth 1000 and it goes to 1100 you've made a 10% profit if you sell it 1100. If you invest 1000 in 10 stocks worth 100 dollars and those stocks go to 110 you sell 10 shares instead of one for the same 10% profit.