Planning for the Future


Buy? Sell? Ask Questions First

Stock prices have generally been up over the past few years, prompting many investors to reexamine their holdings.  It may be time to sell (to take advantage of gains in certain companies) or to buy (if share prices seem poised to increase).  Consider these factors:

Have I picked stocks wisely?
Look at a company’s position in its field and consider long-term potential.

What have market changes done to my overall investment mix?
Is it time to reevaluate how much you have invested in stocks?  What are your current investment goals?  Retired investors might consider bonds, CDs, Treasuries and other investments less affected by Wall Street’s swings.

What is the “cost” of selling or buying?
Taxes are an important consideration in selling shares.  If you sell at a gain, you’ll share some of your good fortune with the IRS.  Losses, on the other hand, are deductible only to the extent of capital gains plus $3,000 of other income.  You can carry over any excess, but it may take years to deduct a large loss.  Consider broker’s fees in your decision, too.

Am I able to weather the storms of a fluctuating market?
Determine the level of risk with which you’re comfortable.  Then review your exposure to see if you can safely ride out market upheavals.

Should I consider gifts of securities to charity?
You can avoid capital gains entirely if you give securities that have gone up in value to charity.  Plus, if you itemize, you’ll be entitled to deduct the full fair market value of the securities if you have held the shares more than one year.  You can make the most of stock losses by selling the shares and contributing the proceeds to charity.  That will give you two deductions – one for the capital loss and another for the gift.