Friday, April 07, 2006

My first sale(s):

Last week I sold stocks that I owned for the first time. I think this would normally be very nerve-racking for a person, thinking "what if it shoots up after I sell it?" or anything of the sort. This was made much easier because I needed the money in my account to pay my taxes, so it didn't really matter if it sky rocketed or collapsed after I sold it. Would I be disappointed if it shot up after I sold it? Yes, but as I said, I have to pay taxes, so not a big concern. Both of the stocks that I sold have stayed close to the price I sold them at, so it hasn't bothered me yet, we will see in a few weeks.

I think needing money to pay taxes is a good reason to sell some stocks. Needing money to buy new shoes is not. If you are planning on purchasing a car in a year, start stocking money away in an index fund, and then take it out when you are ready to purchase a car. Do the same if you are going to buy a house or anything else major. When you invest, you should plan on keeping money in the market for at least a year in order to avoid tax penalties that you have if you take it out within that first year.

Remember, you want to buy and hold until you really need the money!


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