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Started By
Message
Stock/Financial Advice Needed
Posted on 12/3/24 at 1:23 pm
Posted on 12/3/24 at 1:23 pm
Baws, I am a novice investor with some excess funds that I am looking to grow in an effort to be able to purchase a new/bigger home than where we currently live. I was thinking about dumping into an aggressive stock portfolio with 85-90% equities, but have been thinking about the back side tax implications when I pull it out and realize the gains. Any investment advice? Can provide further info if needed. TIA
4
Posted on 12/3/24 at 1:27 pm to oysterpapi
quote:capital gains are capital gains no matter the commodity or instrument. hold for longer than one year and they'll be taxed as long term gains at the lower rate.
the back side tax implications when I pull it out and realize the gains
not much else you can do about this if non-retirement funds
Posted on 12/3/24 at 1:30 pm to cgrand
Aren't there tax benefits with ETFs?
Posted on 12/3/24 at 1:34 pm to oysterpapi
quote:like what?
Aren't there tax benefits with ETFs?
if you buy an ETF at $10 and sell it for $20, you are taxed on the $10 you made. no different from individual equity positions, options, bonds, mutual funds, crypto or concentrated orange juice futures
only benefit to ETF vs MF is there are fewer "taxable events"
quote:
ETF capital gains taxes For the most part, ETF managers are able to manage the secondary market transactions in a manner that minimizes the chances of an in-fund capital gains event. It's rare for an index-based ETF to pay out a capital gain; when it does occur it's usually due to some special unforeseen circumstance. Of course, investors who realize a capital gain after selling an ETF are subject to the capital gains tax. Currently, the tax rates on long-term capital gains are 0%, 15%, and 20%. These percentages are based upon your taxable income and—depending on your modified adjusted gross income (AGI)—you might have to pay an additional 3.8%. The important point is that the investor incurs the tax after the ETF is sold.
This post was edited on 12/3/24 at 1:37 pm
Posted on 12/3/24 at 1:49 pm to cgrand
Maybe you need to read my request again ... I am a novice asking for help.
Posted on 12/3/24 at 1:56 pm to oysterpapi
I'd be interested to know what the posters here think about this subject. My new home down payment fund is in SWVXX right now because I plan to buy in the next 2-3 years and I want to park it somewhere safe. I know I could be missing out if the stock market continues to boom but I also remember the volatility of the recent past and am risk averse with money I want to use soon.
Posted on 12/3/24 at 2:09 pm to oysterpapi
quote:
Baws, I am a novice investor with some excess funds that I am looking to grow in an effort to be able to purchase a new/bigger home than where we currently live. I was thinking about dumping into an aggressive stock portfolio with 85-90% equities, but have been thinking about the back side tax implications when I pull it out and realize the gains. Any investment advice? Can provide further info if needed. TIA
What is your time horizon?
Posted on 12/3/24 at 2:13 pm to HYDRebs
Looking to invest now, new house in 3 years
Posted on 12/3/24 at 2:49 pm to oysterpapi
quote:Traditionally, that's not a long enough time horizon to invest in equities. The traditional answer to investing for 3 years to buy a house would be CDs or high yield savings.
Looking to invest now, new house in 3 years
If you have to give the market a try, depending on how much money you have, take a portion and buy a growth etf or pick a growth company. You may get lucky. I would try just a couple of thousand.
How much money are we talking here?
This post was edited on 12/3/24 at 3:10 pm
Posted on 12/3/24 at 3:02 pm to oysterpapi
quote:money market, high yield savings, or CD's if you cannot afford to risk your principal. if you can afford some risk, then SP500 index funds or NASDAQ index funds (or ETF's). understand as noted above that 3 years is a very short time frame for overall return...anything can happen.
Looking to invest now, new house in 3 years
there's no magic bullet unfortunately. as they say, investing can and does involve risk
Posted on 12/3/24 at 3:36 pm to cgrand
quote:
noted above that 3 years is a very short time frame for overall return...anything can happen.
Pay attention to this, 3 years is short. Here is last 20 years of S&P
2023: 26.29%
2022: -18.11%
2021: 28.71%
2020: 18.40%
2019: 31.49%
2018: -4.38%
2017: 21.83%
2016: 11.96%
2015: 1.38%
2014: 13.69%
2013: 32.39%
2012: 16.00%
2011: 2.11%
2010: 15.06%
2009: 26.46%
2008: -37.00%
2007: 5.49%
2006: 15.79%
2005: 4.91%
2004: 10.88%
If one of those negatives hits in your 3 years, it would suck. There are also some sub 5% growth years as well.
Posted on 12/3/24 at 6:32 pm to bayoubengals88
quote:
Traditionally, that's not a long enough time horizon to invest in equities.
This is true.
Posted on 12/3/24 at 9:18 pm to oysterpapi
If you make 100k profit in a stock/stocks in 30 days you pay probably 35k taxes. If you hold for an extra 336 days you pay 20k in taxes or the stock could get cut in half in that extra time frame. People should not focus on taxes when trading....
Taxes suck but don't make decisions based on that
Taxes suck but don't make decisions based on that
Posted on 12/4/24 at 6:55 am to bayoubengals88
I am thinking of putting about $50,000-$70,000 in some sort of avenue. Would a CD or high yield be a decent look at this amount? Or should I stick with the ETF plan tracking S&P/NASDAQ?
Posted on 12/4/24 at 7:26 am to oysterpapi
If you need the principle in 3 years you're better off in a CD or money market. Just no guarantee that when you need the money any equity investment will be worth more than the initial investment.
Posted on 12/4/24 at 7:45 am to oysterpapi
quote:
I am thinking of putting about $50,000-$70,000 in some sort of avenue. Would a CD or high yield be a decent look at this amount?
Money Market accounts are around 4.5% right now. I'd go with that unless you can find a savings account paying out better rates.
Posted on 12/4/24 at 8:51 am to oysterpapi
quote:An ETF that tracks the S&P would be 100% stocks so that's too agressive for the three year timespan.
Or should I stick with the ETF plan tracking S&P/NASDAQ?
60k in a 4.5% money market account will make you $7,100. Not much in the grand scheme of buying a house.
The best thing you'll have going for you is the equity and market increase of your current home.
This post was edited on 12/4/24 at 8:52 am
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