Hey all,
Asking you all to gaze into your crystal balls and share your insights here!
I need to liquidate my shares for a large purchase in the next 3 months. I'm down $14,000 on the original $60,000.
It's all in VAS.
Would you wait and ride out the market, or sell and bank the $14,000 capital loss to offset for future capital gains?
How do you guys think through these dilemmas?
Thanks
Depends if what he is buying is tax deductible.
If not Be better off selling shares, buying new object, getting investment loan for shares so it can be a tax deduction for interest incurred
agree
WHERE IS REKT TRADING? im actually concerned. he disappeared right after crypto and share market crash.
Please don’t mention that name.
It’s been so tranquil on the finance forums lately
Eating lobster and caviar on the yacht he bought with todays earnings
With the provided information, I can provide two options 1) Now 2) Later.
Sell now and carry losses forward
Yeah very good point don’t forget to carry forward the loss.
you can't ride out the market with a 3 month time horizon
if you have to sell in 3 months, just sell it now and save yourself the stress of checking the price every day.
but just know you're selling the bottom or at least close to the bottom
$14000 down from $60000? Such amateur, I am down $95000 from $130000………….32 shares only 2 in the green and 3 break even…………lol
By the way you shouldn't invest if you are going to ask a bunch of strangers who knows nothing about your situation for advice……..
Sell to me
Crystal ball aside, only sell on a green day and perhaps consider selling in batches over the months.
Advice for the future, buying shares should be a 7 year horizon i.e. don't buy it unless you can guarantee yourself that you won't need the money for 7 years.
I see more downside than upside in the short term.
Wait until Saturn aligns with Venus and the sunspot number goes above 12
I'm buying an AMG as an investment. Hoping to recoup my losses, I've been told they go up in value if you buy a red one.
Personally I find times like this are the best to top up purchases on good quality stocks and ETFs. In 5+ years you will more often than not look back at a missed opportunity to add to holdings (plus dividends). I mean within a the last 2-3 years we have had a peak, 35% fall, another peak, and another 25% fall.
But depending on your finances, what you are going to purchase and reasons for selling (buying a business, investing in something else) it may be a better idea to sell now. Maybe seeking professional advice is the way to go when making major decisions.
There are safer EFT you could change too, covid has proven some industry's will make profit no matter what..
If you held your shares less than 1 year, then its a operation loss, not a capital loss.
What's the difference? Is there a different tax treatment?
Yes. Operating loss can offset against operating income (e.g. your salary or income). Capital loss can only be offset against capital gain, NOT your income. If you don't have a capital gain in the current financial year, you can carry the capital loss forward to future years.
Thanks for sharing this, can't believe I didn't pickup on this detail.
So I'd I buy 1 share for $10,000 and in the same year sell it for $7,000 you're saying that I can claim the $3,000 to reduce buy taxable income?
Carrying forward a net capital loss
If your allowable capital losses are greater than your capital gains, you have a net capital loss.You cannot deduct a net capital loss from your income but you can carry it forward and deduct it from capital gains in later years.
@LemonShapedRock: Your determination as a trader or investor is based on a number of different factors. You can make a case for it either way. Your case as a share trader could be argued along the lines of:
- your intent was to generate income or short term profit (even though it made a loss)
- you've held shares for a short period of time (a few months)
- the amount of capital you've deployed is relatively small ($60k)
- you have an online brokerage account to trade shares
- you can demonstrate your decision making process to buy and sell shares:
1). you traded out of one set of shares (IVV) as they were declining, to buy into VAS as you believed it would generate more profit
2). you believed the trading & macro environment has deteriorated and shares will fall further. You've traded out of VAS to minimise your losses
3). You will purchase back in at a later date when the trading environment improves.
You can only report "operating income/loss" (not even the correct terminologies) if you operate a share trading business. Doesn't apply to individuals.
@lookingforTV: Think it Can apply to individuals if you do enough trades to justify it as a business but it’s a grey line with no clear guidelines on the ato website as usual so likely hard to pull off.
I’d say op has done few trades so it’s just a capital loss to carry forward unfortunately.
Are you sure about this? Can you point me to the relevant documentation?
As far as I'm aware, you can only deduct losses against income if you're operating as a share trader rather than an investor. There's a whole page describing the difference so I won't repeat here.
I'm all for tax loopholes, so I'll happily stand corrected. Otherwise please be careful about spreading misinformation or I'll tell PayPal.
https://www.ato.gov.au/individuals/capital-gains-tax/shares-…
It's not hard to demonstrate you are a trader as opposed to an investor, even as an individual.
I just checked in to see how many shares you wanted to "liquidate". Smh.
Retail investors should stop acting like they are institutional ffs.
Didn't know Ray Dalio was on OzB
Next time i buy something on my credit card, ill just call it a leveraged buyout.
Cool story bro
@BeoWulf: How lame do you have to be to come to a bargain sharing site and boast how superior you are to everyone else. Lol
maybe good day to offload 1/3
Actually really simple one.
If you MUST liquidate in 3 months then do it now.
The price is known right now, otherwise you are speculating and losing sleep over it.
Does that apply to buying as well?
Better option is sell 1/3 every month
I'm already rekt - 30% down since start of this year and am prepared to get REKT some more next year. The right time to sell would have been December last year.
It is now one month since this thread was started, and when the OP decided to sell 50% of their holding.
On Wed 12th Oct, VAS finished the day at $82.55 and on Thurs 10th Nov it finished at $86.53, giving a monthly rise of 4.83%.
It's interesting to read the various predictions in this thread, and see how they panned out.
Let this be an example to you all, the most powerful attribute you can have when owning stocks is "holding power". IE the ability to hold your stocks during downswings and not be forced to sell.
Had I not had this upcoming purchase come in somewhat unexpectedly I would've continued to hold.
In future I'll only be putting money in the market that I absolutely know I won't need for the next 3 - 5 years.
I've recorded the capital loss, so hopefully I'll have some gains in the future I can offset!
Thanks for sharing your insight everyone.
hello my friend.
you need your 46K back. you are down 14K from the original 60K.
do you think your investment will recover in 3 years time? maybe you are thinking this, which is why you still hodl.
so what about:
- borrow the 46K you now need at some sort of interest rate
- keep the other money invested in your VAS
even if you borrowed at 10% PA, you could hold the VAS for 3 years at a cost of $13.8K (4.6K pa interest x 3) and still be coming out on top. i haven't calculated the dividends you'd also receive in that time which would put you further in front.
ideally you would've borrowed for the investment in the first place. so you could sell the shares now and then borrow the money for the most deductible use of funds (which might be re-entering some VAS and have a CGT loss to carryover as a bonus)
BUT if the investment doesnt recover, you might be further in the hole.
this advice is general in nature and does not take into account the current price of eth.